Some executives voice optimism that Peru's president-elect Ollanta Humala will follow today's economic policies.
BY JOACHIM BAMRUD
Despite the radical past of Peru’s president-elect Ollanta Humala, some prominent business executives say they still are bullish on the country.
“Sound policies and administration by the new government will continue to move the country forward, both economically and socially,” says Reinaldo Garcia, President & CEO of General Electric in Latin America. “We expect strong sustainable growth in orders during the next few years as the country continues its private and public infrastructure investments which are aligned with our portfolio of solutions, mostly in the power generation, water, oil & gas, healthcare and transportation sectors.”
Pedro Heilbron, CEO of Panamanian airline COPA, echoes those sentiments. COPA is expanding its flight connections between Peru and Panama.
“We have not seen any thing that would set off alarm bells,” he says. “We don’t expect major changes in how Peru is being run…[in terms of ] economic growth policy.”
Humala is scheduled to assume Peru’s presidency on July 28, but has yet to announce his key economic team, causing some concern among local and foreign investors. During the presidential campaign he had announced plans to raise mining royalties. As a result, after he won the June elections, Southern Copper announced that it would review a $2 billion investment plan in Peru.
However, both Garcia and Heilbron remain upbeat on Peru, which the Latin Business Index from Latin Business Chronicle ranks as Latin America’s third-most attractive country to do business in. Chile top the list.
“We view Peru as a great opportunity in terms of growth, so we have plans to invest in our operations in this country. Peru is a country that has shaped an amazing transformation and positioned itself as a growth engine for the Latin American region in the last decade, Garcia says. “The country has been able to develop through a sound economic model based in a free market approach, and also leveraging its wealth in natural resources such as mining, fishing, and agriculture, among others.”
Heilbron points to the strong economic growth in Peru the past decade and its economic outlook. Peru will have Latin America’s fastest economic expansion this year, according to a Latin Business Chronicle analysis of new estimates from the International Monetary Fund (IMF). “Peru is doing very well,” Heilbron says.
Copa recently added a fifth daily frequency between Panama and Lima. “We’re happy with results and are expanding the commerce and tourism,” Heilbron says.
Michael Reid, the Americas editor of The Economist, urges Humala to take note of the success Luiz Inácio Lula da Silva had as Brazil’s president from 2003 to 2011. Lula followed pragmatic economic policies despite his radical past and named a well-respected banker, Henrique Meirelles, as his central president.
Meanwhile, Humala should also remember that 67 percent of Peruvians in the first round of elections voted in favor of candidates that promised continuity, Reid told Latin Business Chronicle during the Business Future of the Americas conference in Cartagena, Colombia last week.
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