Juan José Marthans: “A CADE without assigning tasks and responsibilities is useless”

Economist Juan José Marthans, former head of the Superintendency of Banking Insurance and AFP (SBS) and executive president of Globokas Perú, He harshly criticized the Peruvian business sector for being not very “diligent” and having two shortcomings. The first, that they ask for unity in the country, but they are not united among themselves; and second, that they ask for a medium and long-term vision of the country, but everyone is in a hurry to know how to face the short term, he noted during his presentation on the economic outlook and the outlook for 2024, at the XIV International Microfinance Congress, held in Tacna.

“What has been the contribution in more than 50 years of CADE to the solution of national problems? What? That absolutely outdated, useless format. The same topics, the same conclusions, the same possibility that none of them will be executed. those conclusions, the same speakers (…). A CADE without metrics is useless. A CADE without assigning tasks and responsibilities is useless. A CADE without annual evaluation is useless,” Marthans pointed out bluntly.

In this way, the economist explained that the true revolution in the country was not going to occur “with the raised fist of an ignorant person” or with the traditional proposal of the right, but that the true revolution takes a simpler path and begins to make the market competitive and that whoever comes for the competition has the first level of constitutional autonomy; in addition to develop an effective, timely and transparent decentralization scheme.

“I don’t need 23, 24, 25 regions. Five macro-regions and the topic is over. Why do I want so many regions? What’s happening with Chavimochic III, for what happened with Majes, for that, to invite corrupt, ideologized, thieves and in front of us. And what do we do to change that? We remain in our position as simple witnesses. So, we are also part of the problem,” he concluded.

2024 will not be a normal year

Economist Juan José Marthan also said that, from his perspective, 2024 will not be a normal year. He pointed out that there are three factors that explain the problem of inflation and slowdown in productive activity in Peru. A first factor is related to the international environment, where the United States, despite showing 4.9% GDP growth in the third quarter of the year, maintains a 70% probability that it will enter a recession next year, This is as a result of the high interest rates applied by the US Federal Reserve (Fed), which has increased the cost of credit and may increase delinquencies.

“And be careful, because, despite the growth of this last quarter, housing prices are falling. Do you remember the subprime crisis of 2008? (…) Not only has the channeling of credits been restricted, but also which is actually the possibility of facing deteriorations in the quality of the portfolio tends to be increasing. The cost of consumer credit today for North American credit cards is more than double what it was in the last 30 years on average. “About 20%. And the cost of mortgage credit is around 10%. An unthinkable figure for the North American average,” he explained.

The second factor is the demonstrations that began at the end of 2022 and continued in the first months of 2023, where there were roadblocks and destruction of public and private property, which had a negative impact on the dynamics of several productive sectors such as transportation, tourism, commerce and industry, and pushed inflation upward. According to Marthans, there is no guarantee that this scenario will not be repeated next year.

And the third factor has to do with the environmental environment, specifically with The boy. “It also has a transversal impact on all sectors of productive activity in Peru. But the interesting thing is that it has been officially estimated that, depending on its magnitude, the impact generates a cost in terms of GDP expansion and is calculated between 1% and 5%,” he noted.