Chapter XIV

With a economy so integrated in the world, there is no doubt that as a country we are in competition with many other countries to attract investments, even more with those of the region. Investments that are a key element for the creation of quality jobs and opportunities for all. However, some members of Congress in particular, from time to time, tend to raise legislative initiativess it would be counterproductive for the objective of attracting investment and all that this implies in terms of well-being for society.

In the last weeks of February, the bank of Free Peru introduced a bill amending the “economic chapter” Since Constitution. With this, they seek to establish, among other things, a “people’s market economy” where the state has a leading role in business, without the slightest consideration of the economic and social consequences generated by the state of business in the world. history of Peru.

There is ample evidence of the failure of an interventionist state in our country. It suffices to recall one of the most disturbing periods in economic matters, which was the era of the military government of the general Velasco Alvarado. According to the estimates of the Peruvian Institute of Economicsthe losses accumulated by state enterprises amounted to 2,481 million dollars in 1979, or 10% of GDP, which forced the State borrow considerably, with a public debt which reaches 41.3% of the PBI, and to issue more money (gross error), which implied an annual growth in inflation of 66.7%. This situation triggered the process of economic deterioration that generated a high rate of poverty.

Or, for example, the incursion of the state into national airlines such as the company Transportes Aéreos Nacionales de Selva or AeroPerú, has only generated millions in losses. In the present century, Body accumulated losses of 93 million shillings between 2000 and 2004, which harmed its ability to develop destinations, very different from what happens with concession airports. Just take the example of Ayacucho, where in 2007 only 26,000 passengers arrived, and after its concession in 2019, 280,000 arrived.

Also in industry telecommunications. investment of crown corporations was extremely poor, about USD 76 million per year, compared to investment needs of USD 300 million, so the expansion of the phone coverage it was extremely slow: between 1982 and 1992, telephone lines remained at the level of 30 per 1,000 inhabitants. Entel Perú has accumulated losses of more than 40 million dollars and an external debt of 198 million dollars. In addition, 80% of expenses were for salaries only.

the numbers don’t lie. The economic aspect of Constitution achieved its goals. The GDP of our country, since 1993 (year of entry into force of the Constitution), has increased by 4.4% per year on average, with a cumulative variation of 250% until 2022, according to figures from the Central Reserve Bank of Peru. Similarly, poverty has been steadily reduced until before the pandemic, falling from 58.7% in 2004 to 20.2% in 2019, a reduction of more than 38 percentage points (pp.); while multidimensional poverty, which measures the level of access to services that ensure a decent quality of life, fell from 75.4% in 2004 to 42.4% in 2019, a reduction of more than 30 pp.

If it is true that all standards can be improved, is there any interest in modifying the economic system return to being an entrepreneur? If translating resources into quality public services for the City it is, why not think about establishing improvements in chapter XIV, referring to decentralization, to the Regions there municipalities? Significant unexecuted resources, inefficiencies and signs of corruption are what we have year after year, and the social gaps are not closing.