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President Alan Garcia: Peru needs $10 billion in investments per year

Living in Peru
Israel J. Ruiz

In a speech on Tuesday, Peru's President Alan Garcia noted the importance of investments in Peru, stating it was necessary that $10 billion instead of $2 billion be invested in the Andean country per year.

"What we need in Peru is that there be a lot of investments. Despite what is seen, it is little to what there could be. If we receive $2 billion (in investments) we really need $10 billion," said Garcia.

The President affirmed that the two principle ways in which his administration was going to attract more capital was by creating a safe and stable country.

When addressing comments made by union leaders that the government should raise taxes on mining companies Garcia stated, "By taking more from those that are currently investing, by taking more of their profit, we could scare away another nine (companies) that may want to invest".

He affirmed that his goal was for bigger investments in Peru to create more jobs, better roads, improved health services, education and programs that would reduce poverty.

The Head of State explained that to increase investments in the country and make many things possible it was necessary to "establish good regulations that were generous and interesting".

This will bring much more money into the country, said Garcia, explaining that investments could be ten or one hundred times greater.

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# Anonymous George says :
10 June, 2008 [ 15:59 ]

For those interested, the reason why a country like Peru is advancing so rapidly and a country like Venezuela is seeing no improvement...

It's nothing to do with socialism, lunatic leaders (Garcia himself has a few screws loose), savage capitalism etc

It's all down to investment. Peru has been seeing it since Toledo stabalised the country, most of it private. Recently the government is getting in on the act too, and puting tax to use building infrastructure.
In Venezuela, money is spent on welfare. Cheap bread and populist help today gone tomorrow projects. If Venezuela's oil wealth were spent on infrastructure, Caracas would be the new Dubai, a glistening futuristic city where the government pays YOU tax.

It's a pity though that Garcia's plan to stabalise the country is impossible. When the elections come around there will be a nationalist socialist running who'd undo the good already done. If that would scare my few thousand dollars away, what would it do to someones millions?

# G says :
10 June, 2008 [ 16:20 ]

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# Jet says :
10 June, 2008 [ 20:04 ]

That's an interesting idea George but it seems rather contradictory.  I don't know any creadible economist that would agree that Peru success isn't directly related to the current economic model, ie - neo-liberal and democratic.  Indeed, almost every credible economist from those in Peru itself all the way up to world economists in the WMF, UN, etc, agree that it is the neo-liberal economic system currently in place that is precisely inviting the type of investment we now see in Peru.  Investment itself is the consequence of the economic system and type of

# Jet says :
11 June, 2008 [ 02:56 ]

That's an interesting idea George but it seems rather contradictory.  I don't know any creadible economist that would agree that Peru's success isn't directly related to the current economic model, ie - neo-liberal and democratic.  Indeed, almost every credible economist from those in Peru itself all the way up to world economists in the WMF, UN, etc, agree that it is the neo-liberal economic system currently in place that is precisely inviting the type of investment we now see in Peru.  Investment itself is the consequence of the economic system and type of goverment now in place. 

Also, this rapid pace of growth and investment started long before Toledo.  This started under Fujimori, with the opening of the Peruvian markets which was followed by large amounts of direct investment by Chile. 

2nd was the stabelizing of the societal situations in Peru, namely the capturing of Abimael Guzman and the disbanding of the sendero luminoso that allowed investors to have enough confidence to respond to opportunities in Peru. This was also done under Fujimori.

By the time Toledo took office as president of Peru, the country was already in full swing of economic recovery had already expirienced several years of rapid economic growth.  Toledo and now Garcia are continuing the momentum that was started under Fujimori.
Considering this is all history and easily verifiable for anyone to go back and review, it makes it rather difficult for anyone to come now and state that the neo-liberal economic system and opening up of the Peruvian market/economy has nothing to do with the current success of Peru.
What I do see is resentment from many people that have some other soft of political affiliation, perhaps a different political party, maybe leftist, socialist, communist, they are resentful of this success because it makes it much harder for them to justify the type of extremist government they would rather see in place, and thus, they will attempt to deny that the current success of Peru is due to an economic and politcal system which is almost polar opposite to their own beliefs.
Other than perhaps North Korea, Cuba, China, Iran,..... how much foreign investment are you seeing pouring into leftist/socialist dominated Venezuela under Chavez?  Yes Im sure this has nothing to do with Chavez or the leftist/socialist government there huh?  haha
What happened to the enormous amount of foreign investment there WAS in Venezuela BEFORE leftist/socialist wacko Chavez took over?  Did they leave because the weather changed? Or perhaps they left because they didnt like Venezuelan cuisine? 
What happend to the limited but growing foreign investment in Bolivia once Evil..I mean Evo Morales took over?  The few countries which have remained have only done so because of how much they have already invested and don't want to loose that.
So it's completely obvious to anyone even a child, that it has EVERYTHING to do with the type of government a country has , neo liberal - open market versus a leftist/socialist closed protectionist market and also the type of leader, Garcia, Brachelet, Uribe - versus- Chavez, Morales, Castro. 

I do agree however that spending money primarily on populist programs aimed soley at gaining votes and keeping un-popular leaders in power instead of spending on infrastructure will do little to help a country in the long run.

Ironically, or perhaps not so ironic is that in the case of Peru, Garcia might just end up having to do a bit of populist programs in order to deflect the efforts and $$$ of wacko leaders like Chavez and Morales that are intent on stirring up rebellion in many of Peru's provinces.  As a matter of fact, Garcia is already doing exactly that by instituting food aid as well as subsidizing crops to minimize the impact of world wide food staple price increases on people living in the provincial areas of Peru.  In this case, it might be the lesser of 2 evils, if it can help stave off growth and activity of such destructive political movements like shinning path or mrta which are being funded by druglords, Chavez, and Morales.
But the focus of the above article was about Garcia and whether he can continue to provide a safe and stable enviroment to continue attracting investment and hopefully dramatically increase it.   Even before Living In Peru published this article, this is precisely what I said would be one of Garcia's biggest challenges if not the biggest of his administration. So far, he seems to be taking this task very seriously.  Although I do beleive he has made some mistakes.... such as when he made a public announcement that he would begin seeking out and destroying clandestine airstrips in the jungle region of the country that are used for drug activity.
This takes me back to Garcia's first run as president of Peru - 1985 to 1990, when he decided to nationalize the banks in Peru, and made the unfathomable mistake of announcing it the day before said action was to take place.  What ensued was total panic and a run on the countries financial institutions (and understandibly so) by Peruvians desperate to withdraw their savings before the government takes over.  The cataclysmic effect of this blunder and action would be felt all the way to the end of his presidency. 
Thankfully this time around, his telegraphing of his intentions didn't have anywhere near the negative impact that the aforementioned one did...... however, I think this is one of the times when it might have been better to take action first and then explainin the need for having to take those actions, rather than announcing to the very people that you are trying to persue that you will be coming after them.
But to his credit, many more actions have been taken since then including fortifying the anti-terrorist operations in the Ayacucho/Madre De Dios area, as well as setting up of other base camps in other regions near the Colombian/Ecuadorean border to help counter the infiltration by FARC into Peruvian territory and intercepting both weapons as well as financial support being funneled to Peruvian terrorist groups from Chavez, Morales, and even from the current government of Ecuador - Correa.
http://www.periodismoenlinea.org/Radicales-bolivarianos-son-detenidos