Carolina Trivelli: “(We must) assist the most vulnerable families with fiscal responsibility”

—What do you expect from President Dina Boluarte’s message to the nation?

— We all have very modest expectations due to the limited leadership, let’s say, of the Executive Branch in economic matters.

—And what should you include in your speech?

— That he should change his behavior in approving laws with a strong negative impact on the economy. Above all, on the fiscal issue, spending initiatives (from Congress), perforation of meritocracy and counter-reforms that are very worrying, but I think he has little authority to make that claim because many of these norms were passed, even, without being observed (by the Executive) and it gives a signal contrary to what should be. A warning to Congress would be important.

—Technical opinions have not been heard either…

— As a signal, I think it is important not to approve regulations with an economic impact without the opinions of technical bodies, such as the Central Bank (Reserve Bank), the SBS, the Fiscal Council and regulators. Fiscal consolidation should also be promoted.

—Out of 17 months in office, Boluarte’s administration had 10 months with negative results in the gross domestic product. Is it failing in economic responsibility?

— A good part of those 10 months would have been very bad even with the best or most responsible government. But it is not necessarily the result, but how the Executive responded knowing that these situations were coming. The problem is the action and not the result itself. The message of consolidation and fiscal responsibility is important for private investment.

— As a member of the Fiscal Council, could you tell me whether dialogue with the Executive has been resumed following the Carlos Oliva incident?

— The Fiscal Council, within the framework of delegated powers, recommended that the change in the path of fiscal consolidation that was approved but did not take place be technically discussed. This weakens the institutionality.

—Will the 3% rate reduce the rise in poverty? Or will it remain stagnant at 29%?

— It could or will remain stagnant because the rebound is just beginning and will probably be felt in the poorest groups in the second half of the year when hiring in the agricultural export sector picks up again, if construction picks up again, although it is going slowly. With luck we would have a positive effect on poverty in the second half of the year, but many families are still far from overcoming it.

—Is 3% not enough to contain monetary poverty?

— Multidimensional poverty responds less to growth than monetary poverty, which is even more difficult. Of course, more growth is needed, not only in terms of rate but sustained growth, since the worst thing for poverty is to have a year of 3%, then one of 1%, and then 2%. These changes in sustained growth are fundamental.

—What other factor could contribute?

— The second is to continue prioritizing investments in infrastructure and the provision of basic infrastructure to solve the problem for people in the greatest poverty: it has to do with public transportation with connectivity, schools and health centers, which are essential.

— Where should we aim?

—A package of actions to assist families in the most vulnerable situations, always with fiscal responsibility, but that has not been given. We are spending fortunes on unnecessary things.

— How to understand social assistance?

— We need economic inclusion programs that we hardly have, ranging from temporary employment and job retraining to job training. Haku Wiñay-type programs in the rural world for productive retraining, technological innovation and increased productivity. The fourth axis is social assistance. The programs have a “very bad press,” but in a situation where poverty has increased and the poor are much poorer, these families need to be assisted while they get involved in productive activities or a job and accumulate capital to start a business.

— In simple terms…

— Social assistance, that is, transfers, food baskets, whatever needs to be given to families so they can cope with this deterioration in their living conditions.

— Targeted temporary monetary assistance?

— Exactly. Totally.