Narayan AmmachchiPedro Pablo Kuczynski has sworn in as Peru’s new president, vowing that his administration will transform the country by investing in infrastructure and extending basic services to one and all.
Kuczynski, an economist and former Wall Street investor, says the investment would come from the money saved during the commodity boom.
In his inaugural speech, Kuczynski has also outlined plans to revive Peru’s ailing mining industry, one of the key sources of revenue for the government and the country’s biggest employer.
He also talked of overhauling the public education system and doubling the size of the formal economy workforce. Such an investment, he said, would result in multilateral growth, increasing the state’s tax revenue overtime.
Analysts say Kuczynski will cut taxes and free entrepreneurs from too many regulatory laws in an attempt to encourage businesses to invest and create jobs. Peru is indeed seeing its poverty rate falling, but governments have not been able to keep up with rising middle-class expectations.
As part of bolstering formal economy, Kuczynski would offer employees social security and healthcare benefits, say analysts.
Peru’s economy is no longer booming, due largely to decreasing demand for mineral resources in the international market. Peru’s economic growth decreased from 6.5% in 2011 to 3.3% last year. Yet in its recent report, the Economic Commission for Latin America and the Caribbean (ECLAC) ranked the Andean country as the second fastest-growing economy in South America, forecasting 3.9% growth for 2016.
Before jumping into politics, Kuczynski worked for decades at the World Bank. Today, there are eight economists in his cabinet. There is no doubt that he has all the expertise to reverse the economic fortune of Peru.
But he is 77-year-old and his party, the center-right Peruvians for Change, has just 18 seats in the 130-member Congress. He has to convince opposition party members before pushing any new legislation through Congress.
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