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José Távara: “It is a mistake to aim for growth and believe that the problems will be solved”

La República interviewed the economist and PUCP professor José Távara to analyze the national panorama of the new year, fraught with sociopolitical tensions that have diminished the main growth indicators and, therefore, demand solutions and consensus so as not to further harm the who have less

— What are your thoughts on economic activity in 2022?

— In a year of crisis, polarization and disagreement among Peruvians, issues that were considered overcome are regressed. Growth below 3% is explained by a sharp fall in sectors such as fishing and mining.

— Is the peak of 3.9% that the MEF points to for this year unreasonable?

— We need the crystal ball of macroeconomists who are aware of the limitations we have to know what will happen (laughs). We also depend on factors such as the war in Ukraine, the Chinese economy in the outbreak of a health crisis, and inflation in energy and food at a global level..

— Even so, the macro solidity of Peru is highlighted, but there is a divorce with the day-to-day life of the population…

— It is clear that the economy left to free will it can grow, but it has a ceiling. We see it due to external and internal factors, such as being used to the fact that despite a political catastrophe or the change of president every year, it is enough for the economy to continue growing. You have to watch this carefully. We are reaping serious mistakes made years ago by commodifying a series of essential basic services such as education, health and security, which are essential for the economy to function well and for people to have a modicum of well-being.

— So the economic model reflects that it is not enough for the GDP to grow?

– Of course. Seeing that the GDP is in the blue and believing that it is enough is an error that no one accepts, except some colleagues, as well as believing that you have to aim for growth (of GDP) and all problems will be solved automatically. We saw it in 2022. The country is on fire from conflict, but the economy kept growing.

— It rains but not for everyone…

— Believing that except for GDP, everything is an illusion, is nonsense. GDP is an aggregate that can grow, but so can inequalities. Poverty can even increase with GDP growth subject to activities that generate little employment and a rickety state with little capacity to distribute.

— Where to turn to close the gaps?

– It is very important now tax reform, but you don’t want to argue. The MEF programs can change their name and be successful, for example, to extend the period of Reactiva Peru, but without a reform, I see it as difficult. The tax base cannot be expanded because the informal workers will not pay taxes because they do not receive quality services. Now I see a reform difficult due to polarization.

— And where should these reforms aim?

— To health, education, an agrarian reform for the sustainable development of agriculture and to guarantee food production in the future, but we are not discussing it. Pedro Francke’s proposal was good, but due to the pettiness of some congressmen it did not prosper.

—How do you see the role of the current management of the MEF?

The MEF has a lot of power in part because it covers economy and finance, unlike other countries where the treasury is a separate arm. Although here politics is used as a revenge tool against honest officials, against whom one can disagree, as in the case of Maria Antonieta Alva, who was initiated an accusation process in Congress. What kind of officials will we have in the future assuming positions in the MEF if politics acts in this way? Hence we complain. It is outrageous how they abuse power.

— Poverty is expected to grow even again in 2022 to 30%. Are you in favor of continuing with the bonuses?

— This type of focused measures must be subject to evaluation of the results, depending on their impact, they can be renewed, but they can also develop capacities. They are emergency measures that cannot be thought of as development policies. With the soup kitchens we have managed to reduce poverty in recent years, it is crucial to focus since we cannot allow the indicators of childhood anemia to increase.

— With the social conflict, in a year where private investment is expected to fall to 1%, what else could happen?

If social unrest continues, there will be more significant contractions. Who would want to invest in a country that is on fire? The search for consensus and dialogue is urgent so that there is investment, and thus begin to close the gaps.

— Any comments on the role of investment?

— Sometimes there is a parasitic relationship. There are private individuals that parasitize the State and then blame it for being inefficient. Politicians have a lot of responsibility in also treating the Condition like a booty. One reaches the government and distributes positions to his friends or people from the party that financed his campaign.

— The Judiciary recently agreed with Indecopi regarding subsequent control in business mergers. How do you see the current framework?

It seems good to me what was resolved by the PJ. Without a solid institutional framework, despite the law or technical criteria, the result can be counterproductive. Indecopi must be strengthened in its autonomy and independence, but we have not accepted the mechanisms to elect its presidents or members of the board of directors or court. A public contest must be made and not by hand.

Source: Larepublica


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