Leader of the Year: Alan Garcia ???

I just stumbled across this article in Latin Business Chronicle:

“What a year it has been for Peru. It managed to post its best economic performance in 14 years (and Latin America’s second-highest growth rate), post another jump in foreign direct investments, achieve investment grade and host key regional summits with Asia and Europe…Much of the credit goes to Alan Garcia…”

My first thoughts were something like “Madre de Dios… Ayude me pues!!!”. Now I have often said life in Peru has been great to me and there are a lot of wonderful opportunities here, but I find it disappointing that both the media and political / business establishment in Peru often view “progress” strictly in macro-economic terms, levels of foreign investment, nr of free trade agreements, etc.

The unfortunate reality is that the macro-economic gains Peru has made in the last 2 decades have not improved the quality of life of all Peruvians proportionately, hence Alan Garcia’s (and before him Toledo’s) low approval ratings. In addition, in light of the collapse in commodities prices I wrote about earlier, anyone who believes Peru won’t be affected by the global recession is dreaming.

The good news, I agree with Umair Haque that “this is no mere recession: it’s a tectonic global shift in savings, consumption, and investment”. There has never been a better time than now to tackle some of the issues that will improve the quality of life for all Peruvians, such as economy in the provinces, environmental protections, occupational safety, corporate culture, cost of home ownership, etc.

Finally, one of the accomplishments touted by Alan Garcia was the free trade agreement (TLC) between Peru and China signed at the APEC summit. Here’s a wildly speculative, yet extremely intriguing question about what will happen to La Oroya now that the Chinese are coming?

4 thoughts on “Leader of the Year: Alan Garcia ???

  1. Garcia is riding on the wave of Toledo’s successes. The TLC/FTA started with Toledo and was quickly signed by the Peruvian Congress before Bush left office since they were worried Obama would nix it.

    Garcia has nothing to do with Peru’s economic success other than by sitting back and not meddling with the economy like he did with the 80’s.

    Unfortunately, I think Peru is going to have it’s own micro consumer credit problem since many of the C&D classes are depending heavily on it for their daily purchases.

    La Oroya will probably look like a saint compared to Chinese industrial practices.

  2. I would even go further: today’s macro economic gains in Peru started with Fujimori, and then Toledo. I’ll give Garcia credit for maintaining a market friendly regime, but he’s pretty much found himself in the right place at the right time.

    You’re right about credit, even here in Cusco I’m starting to see a number of stores with in-house bank branches. It’s sad to see while a lot of the world is trying to wind down their excesses many in Peru seem to believe the proverbial “Stairway to heaven” consists of more materialistic “stuff”.

  3. Pingback: More on politics « Life in Peru

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