The great and wise Economic Swami, Alan Garcia announced at the 46th Annual Conference of Executives that Peru would not fall into recession despite the global crisis.
Photo Credit: Andina
Garcia stated, “…anything could happen but there is no way that Peru falls into recession in 2009 or 2011.“
Garcia seems to be staying on track with himself, but not the rest of Peruvian government or population. Garcia stated that Peru would be “unaffected” by the global crisis, then days later the Lima Stock Market plunges and the exchange rate of the U.S. Dollar goes up!
Follow Garcia’s assertions that Peru is impermeable to the global crisis with the Ex-head of Peru’s Central Bank saying that Peru WILL be affected and that the “blows are inevitable.”
Not too many Peruvians are drinking Garcia’s “Everything’s going to be okay” Kool-aid. Reporters from Radio Capital 96.7 (owned by RPP group) hit the streets and in a “your opinion counts” segment asked Peruvian citizens if they really believed the President’s words about the economy.
The majority questioned in the impromptu street survey did not agree with their President. Callers to the station said that Garcia was “Talking wonders but has nothing to show.”
One woman claimed that “the end of APRA has come.” APRA, Garcia’s political party, was formerly known as a socialist party, but with Alan Garcia’s second term as President the party has become more akin to free market policies. APRA is no longer the party of the people or socialist ideals.
The most memorable caller opinion was when one woman told the radio hostess that Alan Garcia “Should lose some weight so he can go to the mountains.” The Sierra of Peru or the Mountainous regions are the provinces affected most by poverty. Peru’s wealth and economic growth hardly trickles down to these remote and isolated areas that lack modern infrastructure.
It is very easy to understand why the majority of the population doesn’t believe in Garcia’s words. It’s not that he has obviously contradicted himself on multiple occasions, but it’s that the general population has not seen the economic growth of the country in their own pocketbooks or salaries.
I don’t think Peru will fall into a recession, but that’s not to say that the country won’t see a slow down in exports, real estate sales or even outside investments. There are too many internal and core problems in Peru that prevent it from truly being a “safe bet” for investors.
Peru would be an investor’s paradise if maybe it would model itself a bit more after other successful Latin American nations such as Mexico, Costa Rica, and Panama.
If Alan Garcia keeps up with his glass half full optimism and fails to realistically address the issues at hand we will see Peru follow habits and trends that put U.S. Citizens and their economy into a bind.
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Excellent thoughts. Unfortunately the Peruvian leaders in Lima are a world away from the people in the provinces, or the poorer districts in Lima for that matter.
As you say, Peru could be an investor’s paradise. We are much closer in both time zone and culture to the US than the Indian and Asian companies who have secured most of the work outsourced by US businesses. Not to mention the internal opportunities here in Peru with the young population and natural resources.
I’ve referenced your post on my blog in a writing exercise for my students in regards to Peruvian corporate culture and leadership.
Garcia’s pronouncements on the economy often are maddeningly and hilariously out of touch with objective fact. It amazes me how he has the guts to stand in front of the media and say things like “Peru’s poverty rate has dropped to 39% and will drop to 18% in 10 years,” when the country’s figures show poverty rates in the 40s, with no sign of a significant drop in the future.
Then there was his “swami” act of insisting that the uncontacted tribes in the Amazon were a figment of the media’s imagination.
Does Garcia not realize how silly he appears when he makes these statements? I realize that he is trying to achieve certain political purposes w/these stances, but his tactics are so transparently manipulative, it’s an embarrassment.