Interview : President Martín Vizcarra Cornejo

What is the importance of diversified sources of foreign direct investment (FDI)?

MARTÍN VIZCARRA CORNEJO: We understand that economic development is related to private investment growth, which is why it is important to diversify FDI sources. According to data from ProInversión, as of June 2017 Peru’s main sources of FDI were Spain with 17%, the UK (17%), the US (13%), Chile (12%) and the Netherlands (6%), while 87% of FDI is concentrated in production, agriculture, foreign trade, energy and mining. Further enhancing FDI will contribute to the development of industries with high added-value and decrease the risks associated with the volatility of the raw materials market.

It is therefore crucial to make use of the more than 20 free trade agreements between Peru and 53 countries, which cover 90% of international products. Our strategy is focused on continuing to attract more partners, as well as seeking mechanisms that can enhance and modernise niche markets and productive sectors that could become globally competitive.

What actions are needed to decrease informality levels in the short to medium term?

VIZCARRA: First, we must understand that fiscal, business or administrative informality often presents itself in emerging economies due to the lack of systems where one can obtain licences or permits. This has an impact on the labour market. Informality is a highly complex problem that requires coordinated efforts between the different states. In the short to medium term this administration is executing several measures that will allow the formalisation and improvement of business and labour market competitiveness. Our challenge for 2021 is to incorporate 500,000 Peruvians into the electronic payroll through the National Superintendency of Labour Inspection.

This administration has also added another goal, which is to formalise 291,000 jobs through the Job Bank. On the business front it is important to develop management and productivity capabilities at micro-, small and medium-sized enterprises, which will allow them to reduce costs and benefit from formalisation. Short-term measures are focused on reducing processing time to 72 hours, enhancing the interoperability of entities linked to the business through the Superintendency of Tax Administration and the National Superintendency of Public Registries ( Superintendencia Nacional de los Registros Publicos, SUNARP), and promoting the business development centre model as a strategy to enhance decentralised formalisation and involve local and regional governments.

In the medium term this administration will go forward and bring dynamism to the organisation of businesses, and enhance business activity and entrepreneurship through policies that facilitate virtualisation and the simplification of processes.

How is the administration working to improve transparency and reduce corruption?

VIZCARRA: The fight against corruption is one of the pillars of this government. We have implemented and are continuing to implement specific policies, such as the National Plan for Integrity and the Fight Against Corruption 2018-21. This administration has also proposed to create the Comptroller’s Office Specialised on Organised Crime, which will defend the country from crimes related to contracted killings, human trafficking, extortion and others.

Furthermore, the work of attorney generals is being strengthened as part of combined efforts between the Ministry of Interior, SUNARP and the Attorney General’s Office. The National Interoperability Plan has been approved with the goal of digitising the judicial system. We are tasked with modernising the justice system, leading it towards digitalisation in order to tackle corruption and increase judicial security. We understand that it is necessary to confront corruption at all levels of government: national, regional and local.