Peru
Front Matter

Front Matter

Author(s):
Alejandro Werner, and Alejandro Santos
Published Date:
September 2015
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    PERU Staying the Course of Economic Success

    EDITORS

    Alejandro Santos and Alejandro Werner

    © 2015 International Monetary Fund

    Cover design: IMF Multimedia Services Division

    Cataloging-in-Publication Data

    Joint Bank-Fund Library

    Peru: staying the course of economic success / editors Alejandro Santos and Alejandro Werner. – Washington, D.C.: International Monetary Fund, 2015.

    pages ; cm

    Includes bibliographical references.

    ISBN: 978-1-51359-974-8

    1. Peru – Economic conditions. 2. Fiscal policy – Peru. I. Santos, Alejandro. II. Werner, Alejandro M. III. International Monetary Fund.

    HC227.P426 2015

    Disclaimer: The views expressed in this book are those of the authors and do not necessarily represent the views of the International Monetary Fund, its Executive Board, or management.

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    Contents

    Foreword

    “Success depends on effort.”—Sophocles

    This book is a timely look at a very important Latin American economic success story: Peru. When pondering the factors behind the country’s recent economic achievements, many casual observers may think only of the strong uptick in the demand for commodities and, consequently, high commodity prices over the last decade. With this information in hand, they could easily conclude that Peru’s economic success came without much exertion or its own unique challenges. That it was easily realized, with only minor difficulties. However, when I think of Peru and its accomplishments, I am reminded of the old adage by Sophocles that “success depends on effort.”

    Indeed, the narrative of Peru’s economic transformation over the last three decades as contained in this book clearly demonstrates the validity of this well-worn proverb. The one constant that is woven throughout this volume is that the real story behind Peru’s success is one of persistent and consistent effort—to structurally reform the economy and to construct and implement solid macroeconomic frameworks and policies. These were not easy labors, particularly given Peru’s sociopolitical and economic struggles through the 1970s, 1980s, and 1990s. In this regard, I find this book to be a must read for anyone interested in understanding the real challenges in successfully transforming an emerging market economy, particularly one that depends so heavily on natural resources. In sum, I believe many lessons can be gleaned from this success story.

    Finally, on a personal note, I fondly remember that Peru was the starting point of my first visit to Latin America as Managing Director of the IMF back in 2011. Since that inaugural trip, I have immensely enjoyed returning to Peru and the region in general. I, like many others, find Peru, and Latin America as a whole, to be a vibrant and dynamic region with a rich cultural heritage. I am delighted that the World Bank-IMF Annual Meetings are being held in Lima this year. I think you will all agree it is a great opportunity to showcase the country and the region, and to discuss its remaining challenges while highlighting its many successes.

    Christine Lagarde

    Managing Director

    International Monetary Fund

    Abbreviations

    ARG

    Argentina

    BGR

    Bulgaria

    BOL

    Bolivia

    BRA

    Brazil

    CHL

    Chile

    COL

    Colombia

    CRI

    Costa Rica

    DOM

    Dominican Republic

    ECU

    Ecuador

    GTM

    Guatemala

    HTI

    Haiti

    HND

    Honduras

    MYS

    Malaysia

    MEX

    Mexico

    NIC

    Nicaragua

    PAN

    Panama

    PER

    Peru

    PRY

    Paraguay

    POL

    Poland

    ROU

    Romania

    SLV

    El Salvador

    THA

    Thailand

    TUR

    Turkey

    URY

    Uruguay

    VEN

    Venezuela

    ZAF

    South Africa

    About the Authors

    Adrian Armas, a Peruvian national, is the Manager of the Department of Economic Studies at the Central Reserve Bank of Peru, where he developed his full professional career. Previously, he was the Head of the Monetary Sector of the Economic Studies Department (Central Reserve Bank of Peru). Mr. Armas actively participated in the implementation of the inflation targeting scheme in Peru and wrote various papers and articles on this topic published by the IMF, the European Central Bank, and the Bank for International Settlements. Mr. Armas studied Economics at Universidad del Pacífico in Peru and earned a master’s degree in Economics from Boston University. He is currently a professor of Monetary Policy at Universidad del Pacífico.

    Laura Calderon, a Peruvian national, is the principal advisor to the Minister of Economy and Finance of Peru. Before her current position, she was Deputy Minister of Economy and Finance. She has held several important positions in the public sector and international organizations including Superintendent of the Tax and Customs Authority of Peru, Technical Advisor on tax issues in the Fiscal Affairs Department of the IMF, Director of the Investment Promotion Agency of Peru, and Director of the National Institute of Intellectual Property. Ms. Calderon holds an MA and Licentiate in Economics from Pontificia Universidad Católica del Peru, as well as an MSc in Development Economics from Oxford University. Ms. Calderon has taught college- and graduate-level courses in economics at Pontificia Universidad Católica del Perú, Universidad del Pacífico, Universidad San Ignacio de Loyola, Universidad San Martin de Porres, and Universidad ESAN in Peru.

    Marco Camacho, a national of Peru, is the General Director of the General Directorate of Public Income Policy at the Ministry of the Economy and Finance of Peru. Mr. Camacho holds a BA degree in Economics from Pontificia Universidad Católica in Peru, an MA in Economics from ILADES/Georgetown University (Santiago) in Chile, and has completed other graduate studies in Tax Administration and Public Finance Management. He also worked at the National Superintendence of Customs and Tax Administration as National Intendent of Tax Research and Planning and at the Metropolitan Municipality of Lima as Head of Municipal Tax Administration.

    Patricio M. Castro, an Argentinean, holds a doctoral degree in engineering from the University of Buenos Aires in Argentina and a postgraduate degree from Stanford University. Mr. Castro worked in the private sector and in the Argentine central administration, where he held the position of Under-Secretary of the Public Function. He was a consultant to the World Bank and the Inter-American Development Bank prior to joining the Fiscal Affairs Department of the IMF as Technical Assistance Advisor with expertise in customs, social security, and tax administration. He retired from the IMF in 2014 as a Senior Economist in the Fiscal Affairs Department. During his career, he worked in tax and customs reform in many countries in Africa, Asia, and in most countries in Latin America. He has participated in numerous regional and international events and conferences on tax and customs issues, has published numerous papers on the subject, and is a contributor to the book Changing Customs: Challenges and Strategies for the Reform of Customs Administration (IMF 2003).

    Adrienne Cheasty, from Ireland, is Deputy Director of the IMF’s Western Hemisphere Department, where she has oversight of Peru, Ecuador, and Caribbean countries, program financing, and debt issues. She was previously Deputy Director of the IMF’s Fiscal Affairs Department, responsible for fiscal policy design and country advice, with specific responsibility for Latin America. Earlier, she worked on numerous IMF-supported crisis programs in emerging markets and fragile states. Her research areas include measurement of the fiscal deficit, fiscal and financial issues, and natural resource management. She is a member of the World Economic Forum’s Global Agenda Council on Fiscal Sustainability and has taught at Harvard University, Yale University, and Johns Hopkins University.

    Israel Fainboim, a national of Colombia, holds an MA in Economics from the University of Pennsylvania. He is a Senior Economist in the Fiscal Affairs Department of the IMF. He has provided technical assistance on Public Financial Management to almost all Latin American countries and to China and Vietnam, and has been a consultant to the Inter-American Development Bank and the World Bank. He was a member of the Council on Fiscal Policy at the Ministry of Finance of Colombia, Secretary of Finance of Bogota, Research Associate at Fedesarrollo, and Professor of Public Finance at the Universidad de los Andes and La Pontificia Universidad Javeriana. He has published articles on treasury management, public investment, performance budgeting, public-private partnerships, and fiscal federalism, among other topics.

    Ricardo Fenochietto, an Argentine national, is Senior Economist in the Tax Policy Division of the Fiscal Affairs Department at the IMF. Before joining the IMF, he was Professor of Public Finance at the Universidad Torcuato Di Tella in Argentina and a private consultant to multinational corporations. He has published extensively on taxation issues; his recent work focused on tax capacity, tax effort, and financial sector taxation. He is also peer reviewer for a number of public finance journals.

    Almudena Fernández Benito holds bachelor’s degrees in Law and in Economics and Business Administration from the Complutense University in Madrid, Spain, and is a Senior Controller and Certified Public Auditor for the Spanish government. She joined the IMF as Advisor on public financial management in the Fiscal Affairs Department. Before joining the IMF, she worked as Senior Advisor at the Budget Directorate in Spain.

    Mercedes García-Escribano is Deputy Division Chief in the Expenditure Policy Division of the Fiscal Affairs Department at the IMF. Ms. García-Escribano holds a PhD in Economics from the University of Chicago. At the IMF, she has worked on the teams for Brazil, Peru, Colombia, Mexico, Austria, Spain, and Malta, and has published papers on fiscal (with emphasis on decentralization), financial sector, and labor market issues.

    Fei Han, a Chinese national, is currently an Economist in the Monetary and Capital Markets Department at the IMF. His research interests focus primarily on macro-financial linkages, macroeconometric models, and financial interconnectedness and spillovers. Since joining the Monetary and Capital Markets Department, he has worked on banking analysis and stress testing for Asian and European countries, and market liquidity for the IMF’s Global Financial Stability Report. His previous assignments at the IMF included country surveillance work on Latin American emerging markets in the Western Hemisphere Department, including Brazil, Peru, and Venezuela. He holds a PhD in Economics and an MA in Statistics from the University of California, Berkeley. He also holds an MA in International Finance and a BA in Finance from Peking University.

    César Liendo, a Peruvian national, is the General Director of Macroeconomic Policy and Fiscal Decentralization at the Ministry of the Economy and Finance in Peru. He holds a BA in Economics from Pontificia Universidad Católica del Perú and an MA in Economics from Universitat Pompeu Fabra in Barcelona, Spain. Before joining the Ministry of the Economy and Finance, Mr. Liendo worked for the Inter-American Development Bank, Scotiabank, and APOYO Consultoría. He also teaches at Universidad del Pacífico and Universidad San Ignacio de Loyola. He is in charge of the design of the Multiannual Macroeconomic Framework, which forms the basis for the public sector budget, as well as the analysis on developments, outlook, and risks to the Peruvian economy; fiscal revenues; and observance of fiscal rules, proposing fiscal measures if needed.

    Manuel Luy is the Head of the Research Department at the Superintendency of Banking, Insurance and Private Pension Funds of Peru. Mr. Luy holds a BA in Economics from the Universidad del Pacífico in Peru. He has an MA in Development Economics from the University of Sussex in the United Kingdom and a master’s degree in Finance from the Universidad del Pacífico. Mr. Luy has also worked as a consultant at the World Bank and the IMF, and lectures at the Universidad del Pacífico and in specialized programs at the Central Reserve Bank of Peru and the Superintendency of Banking, Insurance and Private Pension Funds.

    Giancarlo Marchesi is the Director General for Private Investment Policy and Promotion at the Ministry of the Economy and Finance in Peru. Mr. Marchesi holds bachelor’s and Licenciate degrees in Economics from the Universidad del Pacífico in Peru and a master’s degree in Public Affairs from Princeton University. He has been a Manager in the Corporate Strategy Division and Deputy Manager in the Economic Studies and Investment Strategy Area at Banco de Crédito del Perú. Mr. Marchesi has also been a consultant for the World Bank’s Independent Evaluation Group and the Ministry of the Economy and Finance’s Directorate General of Economic and Social Affairs, as well as an independent consultant for Peruvian corporations in the fields of risk, corporate strategy, and mergers and acquisitions.

    Juan Alonso Peschiera, a national of Peru, is an Economist in the Resident Representative Office of the IMF for Peru and Paraguay. Mr. Peschiera holds a BA in Economics from Pontificia Universidad Católica del Perú in Peru and an MSc in Finance from Universidad del Pacífico in Peru. Prior to joining the IMF, he worked at the Peruvian consultancy Macroconsult.

    Mario Pessoa, a national of Brazil, holds a Master of Economics and Social Science degree from the University of Wales in the United Kingdom. He is Deputy Division Chief of the Public Financial Management Division II of the IMF’s Fiscal Affairs Department. He has provided technical assistance on public financial management to countries in the Western Hemisphere, Africa, and Asia in treasury and debt management, medium-term fiscal frameworks, fiscal risks, and government accounting. Previously, he worked in Brazil at the National Treasury, Economic Policy Department, and Internal Control Office of the Ministry of Finance.

    Juan Pichihua, a Peruvian national, is Director of the Directorate of Fiscal Decentralization Policy and Subnational Finances at the Ministry of the Economy and Finance. Mr. Pichihua holds a BA in Economics from the Universidad Nacional Agraria La Molina in Peru and an MA in Economics from ILADES/Georgetown University (Santiago) in Chile. He is a board member of the National Superintendence of Health Insurance in representation of the Ministry of the Economy and Finance and Principal Professor of Economics at the Universidad Nacional Agraria La Molina. He was General Director of Fiscal Decentralization and Social Affairs (Ministry of the Economy and Finance), Chief of Household Targeting System, and Consultant of Health Economics and Social Affairs.

    Javier Poggi is the Chief Economist at the Superintendency of Banking, Insurance and Private Pension Funds of Peru. Mr. Poggi holds a BA in Economics from the Pontificia Universidad Católica del Perú. He has a Master of Science degree in both Economics and Banking, Finance and Investments from the University of Wisconsin-Madison. Currently, he presides over the Superintendency of Banking, Insurance and Private Pension Funds, special committee for the implementation of Basel II-III and Solvency II standards. He was a member of the Board of Directors of the Comisión Nacional Supervisora de Empresas y Valores (now, Superintendencia del Mercado de Valores). Prior to joining the Superintendency of Banking, Insurance and Private Pension Funds, he worked for the World Bank as an economic development consultant, covering a variety of issues.

    Zenón Quispe, a national of Peru, is Advisor to the General Manager of the Central Reserve Bank of Peru. Mr. Quispe holds a BA in Economics from the Universidad Nacional San Cristobal de Huamanga in Peru, an MA in Political Economy from Boston University, and a PhD candidate in Economics from Oxford University. After working as Senior Economist in the External Sector Analysis Division, the Macroeconomic Analysis Division, and in the Macroeconomic Models Division, he has been the Head of the Monetary Program Section in the Monetary Policy Design Division of the Central Reserve Bank of Peru. Mr. Quispe is Professor of Monetary Theory and Policy at the Pontificia Universidad Católica del Perú and the Universidad de Piura in Peru. He also teaches Advanced Topics in Monetary Theory and Policy in the Summer Course in Economics of the Central Reserve Bank of Peru and in the Centro de Capacitación del Banco de Guatemala.

    Donita Rodriguez, a national of Peru, is the Head of the Balance of Payments Statistics Division of the Central Reserve Bank of Peru. Miss Rodriguez holds a BA in Economics from Pontificia Universidad Católica del Perú and an MSc in Economics from the London School of Economics and Political Science in the United Kingdom. She also has been a Senior Analyst in the Macroeconomic Modeling Division and Junior Analyst in the Monetary Program Division of the Central Reserve Bank of Peru. She is a Lecturer in International Economics and International Finance—for undergraduate and graduate levels, respectively—at Pontificia Universidad Católica del Perú.

    Lucía Romero is the Head of the Financial System Analysis Department at the Superintendency of Banking, Insurance and Private Pension Funds of Peru. Ms. Romero holds a BA in Economics from the Pontificia Universidad Católica del Perú and a master’s degree in Economics from the Pontificia Universidade Catolica do Rio de Janeiro in Brazil. Prior to joining the Superintendency of Banking, Insurance and Private Pension Funds, she worked as an Assistant Professor in the Economics Department of the Pontificia Universidad Católica del Perú and as a researcher at the Instituto de Estudios Peruanos.

    Kevin Ross is a Senior Economist in the IMF’s Western Hemisphere Department. Prior to that, he was the IMF’s Regional Representative for Peru and Paraguay. He has worked in the European Department on a number of advanced and transition economies. His research has mainly focused on monetary and exchange rate policies, banking sector competition, and investment.

    Renzo Rossini is the General Manager of the Central Reserve Bank of Peru. In this capacity, he reports to the Governor and to the Board of the Central Reserve Bank of Peru, and is responsible for proposing changes to the monetary policy, the management of international reserves, and other aspects of the central bank. Prior to this, Mr. Rossini was the Manager of the Department of Economic Studies. His responsibilities included directing the collection of macroeconomic statistical data, the forecasting process, and the elaboration of monetary policy proposals. Mr. Rossini studied Economics at the Universidad del Pacífico in Peru and holds a master’s degree in Economics from the London School of Economics. He is the author of several papers on monetary policy and is currently also a Professor of Economic Policy at the Universidad del Pacífico in Peru.

    Alejandro Santos, a national of Mexico, is the IMF Senior Resident Representative for Peru and Paraguay. Mr. Santos holds a BA in Economics from Universidad Autónoma de Nuevo Leon in Mexico and a PhD in Economics from Yale University. He has been Advisor and Division Chief in the Western Hemisphere Department, as well as Mission Chief to many countries in the region. Mr. Santos has also been IMF Resident Representative in Russia and Bolivia. Prior to joining the Western Hemisphere Department, he worked in the European Department and the Policy Development and Review Department of the IMF, where he worked on many emerging market economies with IMF-supported programs (including Argentina, Brazil, Georgia, Korea, Indonesia, Russia, Turkey, Ukraine, and Uruguay).

    Alonso Segura is the Minister of Economy and Finance of Peru, where he previously was Chief of Staff. He has been Chief Economist and Head of Strategy at Banco de Crédito del Perú, Peru’s largest bank; Chief Economist at Banco Wiese Sudameris (now Scotiabank Peru); and Advisor to the Executive Director for the Southern Cone and Economist in the Fiscal Affairs Department at the IMF; among other positions. Mr. Segura has a BA in Economics from the Catholic University of Peru and holds a master’s degree in Economics from the University of Pennsylvania, where he also pursued doctoral studies (PhD[ABD]). He holds international certificates in investments (Chartered Financial Analyst) and risk management (Financial Risk Manager). He has held teaching positions at the University of Pennsylvania, the Catholic University of Peru, and the Universidad del Pacífico in Peru. He is a Fulbright Scholar.

    Narda Sotomayor is the Head of the Microfinance Analysis Department at the Superintendency of Banking, Insurance and Private Pension Funds of Peru. Ms. Sotomayor received her training as an Economist from the Pontificia Universidad Católica del Perú and holds a Master of Science degree in Agricultural Economics from The Ohio State University and a PhD from the University of Illinois at Urbana-Champaign. Before joining the Superintendency of Banking, Insurance and Private Pension Funds, she was a Research Fellow at the Center for Farm and Rural Business Finance of the University of Illinois at Urbana-Champaign and had worked as a consultant for diverse international organizations, including the World Bank, the U.S. Agency for International Development, and the Inter-American Development Bank. She has also worked as an Assistant Professor in the Economics Department of the Pontificia Universidad Católica del Perú.

    Melesse Tashu, a national of Ethiopia, is an Economist in the Western Hemisphere Department of the IMF, where he covers Eastern Caribbean countries, Peru, and Ecuador. Mr. Tashu holds a BS in Statistics and an MS in Economics from Addis Ababa University, Ethiopia, and an MA in International Development from Harvard University. Before joining the IMF, Mr. Tashu worked for the National Bank of Ethiopia and World Vision International.

    Carolina Trivelli currently serves as Project Manager for the Electronic Money Project of the Association of Banks in Peru. She has been Principal Researcher for the Institute of Peruvian Studies and Latin American Center for Rural Development. She is a former Minister of Development and Social Inclusion of Peru. She was Director General of the Institute of Peruvian Studies, President of the Consortium for Development of the Andean Ecoregion, and Board Member of the Network for the Development of Social Sciences in Peru and the Peruvian Society for Environmental Law. She is currently a Board Member of the Permanent Seminar on Agricultural Research, a member of the Board of Innova Schools, and a member of the Technical Advisory Committee on Measuring Poverty (Instituto Nacional de Estadística e Informática). She is currently President of the Board of Fundación Backus. Ms. Trivelli specializes in social policy issues, rural poverty, agricultural and rural finance, and rural development. She has taught at the Pontifical Catholic University of Peru and the University of the Pacific. She is currently a columnist for the newspaper Perú 21. Ms. Trivelli is an Economist; she holds an MSc in Agricultural Economics from Pennsylvania State University and a bachelor’s degree in Social Science, majoring in Economics, from the Pontifical Catholic University of Peru.

    Alvaro Valencia works as a consultant at the Directorate-General of Private Investment Policy and Promotion at the Ministry of the Economy and Finance in Lima, Peru. Mr. Valencia holds a BS in Economics from Universidad del Pacífico in Peru and a master’s degree in Economics from Syracuse University in the United States. He has been Chief Executive Officer and President of American Power Corporation, a U.S.-based mining exploration company. Previously, Mr. Valencia has held several positions working for the equity research departments at CLSA Global Emerging Markets and BBVA Securities in New York and the Inter-American Development Bank. He has also worked as an investment banker specializing in corporate finance and mergers and acquisitions at the consulting company Macroconsult in Peru.

    Julio Velarde, a Peruvian national, holds a BA in Economics from the Universidad del Pacifico in Peru, an MA in Economics from Brown University in the United States, and is a PhD candidate in Economics at Brown University. He has been the Governor of the Central Reserve Bank of Peru since 2006. He was also Chairman of the Latin American Reserve Fund, Member of the Board of Governors of the Central Reserve Bank of Peru, Dean of the Department of Economics at the Universidad del Pacífico, and Senior Full Professor in the Department of Economics also at Universidad del Pacífico. Mr. Velarde has been a member of the board of several commercial banks and nonfinancial corporations and advisor to international organizations. He is the author of several books and many articles on macroeconomics and economic policy.

    Mercedes Vera Martin, a national of Spain, is Deputy Division Chief in the Middle East and Central Asia Department of the IMF. Ms. Vera Martin holds a dual bachelor’s degree in Law and in Business Administration and Management from Universidad Pontificia Comillas in Spain, and a PhD in Economics from the London School of Economics. She has been IMF Mission Chief for Ecuador and Mauritania. Ms. Vera Martin has also worked in the Western Hemisphere Department, the Policy Development and Review Department, and the Monetary and Capital Markets Department during her career at the IMF has been engaged in a variety of issues across countries (including Argentina, Colombia, Dominican Republic, Haiti, Mexico, Peru, Romania, and Uzbekistan).

    Svetlana Vtyurina, a national of Russia, is a Senior Economist in the Western Hemisphere Department of the IMF. She holds BA and MA degrees from the George Washington University in the United States. As an IMF economist, she covered emerging market economies and low-income countries in Central Asia, Africa, and Central and South America. Prior to that, she was an Advisor to the Executive Director for the Russian Federation at the IMF and a project consultant in the private sector.

    Alejandro Werner, a Mexican citizen, is the Director of the Western Hemisphere Department of the IMF. Mr. Werner has had distinguished careers in the public and private sectors as well as in academia. Before joining the IMF, he served as Undersecretary of Finance and Public Credit of Mexico; he was also Professor of Economics at the Instituto de Empresa in Spain, and Head of Corporate and Investment Banking at BBVA-Bancomer. Previously, he was Director of Economic Studies at the Bank of Mexico and Professor at Instituto Tecnológico Autónomo de México in Mexico. He has published widely. Mr. Werner was named Young Global Leader by the World Economic Forum in 2007. Mr. Werner received his PhD from the Massachusetts Institute of Technology.

    Yu Ching Wong, a national of Singapore, is the IMF Resident Representative for Myanmar. Ms. Wong holds a BSocSci (Honors) in Economics from the National University of Singapore and a PhD in Economics from Keio University in Japan. Before taking up her position in Myanmar, she worked in the Western Hemisphere Department of the IMF as Desk Economist on Peru, Ecuador, and the Eastern Caribbean Currency Union; in the Finance Department, where she worked on concessional financing and debt relief; and at the IMF’s Regional Office for Asia and the Pacific, on regional surveillance of emerging Asia. Prior to joining the IMF, Ms. Wong was Principal Economist working on China at the Japan Center for International Finance in Japan and Economist at Singapore’s Ministry of Trade and Industry.

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