Wed. Apr 24th, 2019

Peru will be a developed country if it grows at 5% for 20 or 30 years, says minister

Peru will be a developed country if it grows at 5% for 20 or 30 years, says minister

Peru's economy needs to grow at 5% for twenty or thirty years to become a developed country, said Monday the Peruvian Minister of Economy and Finance, Carlos Oliva.

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During a conference with the Association of Foreign Press in Peru (APEP), Oliva said that the Peruvian economy can grow beyond the 4% with which it closed last year, more than double the average of Latin America, which ranged between 1% and 1.5%.

"4% is a good rate for the standards of the region, but we have the capabilities and potential to do it at a faster pace," he said.

The minister indicated that "the only way to have a high and sustained growth is to improve competitiveness", so that by the middle of this year they will begin to apply the policy of competitiveness and productivity designed by the current Government.

One of the highlights of this policy is that the country will have for the first time a national infrastructure plan "that will identify the development potential of the regions," according to Oliva.

The Minister of Economy and Finance also highlighted the importance of productive diversification policies to boost other economic sectors beyond mining and agro-export, the two main pillars of the Peruvian economy.

"We need to strengthen the forest sector, aquaculture and tourism, sectors where there is a lot of competitive advantage but for some reason or another we are not able to unravel or unlock their development," Oliva acknowledged.

The minister valued that the tax collection has increased last year, which will allow this year to reduce the fiscal deficit.

He also anticipated reforms in the distribution and application of the royalty and mining royalties, since he recognized that the municipalities do not comply with the current norm that obliges them to invest 30% of this income in the communities themselves.

Therefore, the Ministry of Economy and Finance will propose to regulate by law that a percentage goes to the maintenance of the works and not only to the investment.

"What is the use of having the best school or the best hospital in the world if you do not have desks or equipment to function?" Oliva questioned.

He also affirmed that the entire mining canon system and royalties should be reviewed, but that this will take more time and will be done in dialogue with the Ministry of Energy and Mines.

Regarding the fact that the large mining companies do not pay the canon until they have benefits, Oliva considered that this practice is normal because they are large projects that require investments of billions of dollars and during the first years they do not report profits.

On the construction of the South Peru Gas Pipeline, the minister explained that the Government is pending to receive studies on three alternatives that go through to maintain the original layout, to propose a new or even a mixed alternative that includes maritime transport.

This project included an investment of 7.328 million dollars to build, operate and maintain a natural gas transport system along more than 1,080 kilometers, from the Camisea deposits in southern Peru to the port of Ilo. in a 34-year private concession delivered to a consortium led by Brazilian construction company Odebrecht.

The project, which was developed with Enagás of Spain and Peru's Graña y Montero, returned to the control of the Peruvian state in early 2017 when the Peruvian prosecutor's office began investigating Odebrecht's corruption allegations and is currently awaiting a new bidding.


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