Evaluation of the Presidential Administration and Future Prospects, by Milton von Hesse

The main characteristic of the government has been the institutional weakness at the national level created by the very poor selection of people to occupy high public positions that require a specialized professional profile as well as their high turnover. The appointment of questioned persons in some ministries – who had to leave office as a result of their own actions or inactions – has led to levels of turnover of ministers never seen before, since in the first 110 days 10 ministers had already left the cabinet, leaving this management with the average of changing a minister every 11 days, well above the Sagasti (28 days) and Vizcarra (37 days). But not only the poor selection has been limited to ministers, but also to vice ministers, general directors and a long etcetera that also includes close collaborators of the President of the Republic himself. Probably the most significant case has been that of his own secretary Bruno Pacheco, whom the Prosecutor’s Office found $ 20,000 in cash in a Government Palace environment.

A second characteristic is the inability to propose policy measures that really solve the problems of the population. Beyond the tendency to alleviate very short-term problems by distributing bonuses and subsidies, there are no coherent proposals to move towards a better future. Thus, for example, in the case of the health sector, no specific step has been proposed to advance towards strengthening the first level of care; in the education sector there are only setbacks in the meritocratic teaching career as well as in the quality of higher education; in the interior, the illegal participation of the ronderos and the army in matters of citizen security was announced; in agriculture, the announcement of a second agrarian reform –that beyond the impertinence of its name– consists mainly of distributing public money in the form of bonds and returning to populist and protectionist practices that had already been overcome; In the energy and mines sector, except for the unilateral threats of mine closures and contract renegotiation, no measure has been announced that would allow us to be optimistic about the future evolution of the sector.

The third characteristic of the politics of the government it is the absolute absence of private sector participation in its vision of the economic growth process. Beyond the harassment of private mining and hydrocarbon companies and the evident contempt for modern agro-export and agro-industrial agriculture, there is no mention of private investment as an engine of economic growth and generation of resources for the treasury via taxes. It is not yet realized that if there is no private investment, there will be no greater production of goods and services and, therefore, there will be no more employment and there will be no higher tax collection. so that the government itself can carry out its functions.

A fourth characteristic is that the presidential figure himself has been involved early in alleged acts of corruption that led the Congress of the Republic to present a motion for vacancy, which was not admitted due to a political negotiation between Free Peru and the center parties. The threat of vacancy, however, will continue as long as the president remains incommunicado with public opinion and continues to be surrounded by some clearly questioned ministers such as Education.

According to official projections of the BCR, the economic growth rate will be 11.9% in 2021. However, this responds mainly to a “statistical rebound” due to the fact that in 2020 our economy had the largest contraction in the last 30 years. In 2022, growth is expected to be more modest, between 2% and 3%, mainly due to the stagnation of private investment, which will not grow according to official BCR estimates and will contract by 9.7% and 12.5%, according to BBVA and Apoyo Consultoría, respectively.

Finally, it seems difficult to reverse this greater distrust that private actors have with the current government, which affects their investment decisions. The problem lies not only in the disruptive agenda that Peru Libre and its political operators have, where the constituent assembly stands out, but also in the recurrence of constant governance crises and the high risk that the President Castillo do not complete your term.