The Rising Star of Peru

Former Venezuela Presidential Chief of Staff Beatrice Rangel reports on her meeting last week with South America's newest presidential superstar, Peru's Pedro Pablo Kuczynkski.

Few countries in our hemisphere can boast about their head of state.

Besides Obama, Santos and now Macri, few other politicians have spent much of their lives preparing for the Commander in Chief job like Pedro Pablo Kuczynski the current President of Peru.

In his young days, Kuczynski was a World Bank officer at a time when Development Economics ruled the content and orientation of investment projects. Those were the days when the intellectual might of Albert O. Hirschman and Paul N. Rosenstein-Rodan shaped the vision and the life path of young economists.

Kuczynski not only was exposed to their continuing debates about balanced versus unbalanced growth but also to their larger than life passion for social value creation, an aspect of development that has recently been fully embraced by Millennials.

He was also able to closely observe the failure of the Alliance for Progress project launched by the Kennedy Administration in an effort to keep Latin America in the Western camp given the innuendos displayed by the Soviet Union in the aftermath of the Cuban Missile Crisis.

From his observation deck he best understood the flaws of public policy as well as those of the hemispheric business community. And this is what makes Kuczysnki stand apart from his Latin peers. He is the sole head of state who deeply knows and understands both public policy as well as business practices and development. And this will perhaps be the asset that could trigger Peru’s development take off.

His remarks to Andres Oppenheimer at the Miami Herald conference seemed to point in that direction. He, for example, has the clearest understanding of the role commodities play in jump starting development. Their role is to produce hard currency that needs to be invested in infrastructure an economic diversification.

And development could ensue when commodity generated foreign exchange is wisely invested. Australia and New Zealand founded their current development on commodity exports.

His development expertise leads him to understand the benefits of concentrating on building the pillars of future development. To his mind, these are tourism, infrastructure and agroindustry. He believes that minor changes and investments in tourism could double the current 3 million visitors per year in about 18 months. Investments would not be made by the government but the government would need to focus on facilitating them.

Infrastructure and agroindustry go together as they are the means to reduce the cost of exporting goods to the international market as well as enhance domestic distribution and drive prices lower. A true turn around in these areas would take two decades while in tourism he belives that the turnaround could come within five years.

Meanwhile Kuczynski is also restructuring public services to improve education and health care. He correctly believes that investments in human capital are key to enhance competitiveness and to conquer a world that increasingly is based on knowledge as the fundamental input for development. But he knows that these investments take at least two decades to impact development.

With regard to Peru’s neighborhood, while Kuczynski acknowledges that the region is witnessing the demise of socialism, he does not see the process as smooth, fast or conflict free.

On the contrary, to his mind this demise will be marked by the tragic humanitarian crisis about to explode in Venezuela. This will negatively impact Colombia, and to a lesser degree, the rest of the Andean region. It will also impact Brazil ‘s northernmost region, not to mention the Caribbean that could be pounded by the crisis in Venezuela like a hurricane. And of course we must be aware that hurricane season ends in late November.

Published by Latin American Herald Tribune on September 25th, 2016

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