Peru: New Finance Minister Expected to Ease Investment Processes

In a surprise move President Ollanta Humala changed his Finance minister on Sunday, appointing a well-known economist to lead the portfolio.

Alonso Segura, who was previously the chief of the advisory cabinet in the Finance ministry, was sworn in Sunday evening to succeed Luis Miguel Castilla.

Alonso Segura (right) with President Ollanta Humala

Alonso Segura (right) with President Ollanta Humala

Castilla, who reportedly resigned for personal reasons, was the last remaining member of Humala’s first cabinet to still be serving in the same post. His appointment in 2011 helped to ease concerns in the business sector that Humala would veer towards a greater state role in the economy.  At the swearing-in ceremony on Sunday, Castilla said that his resignation did not mean he would be distancing himself from the President and that he would continue “supporting the President in everything he considers pertinent.”

Segura takes over at a time when Peru’s economy has slowed considerably in recent months. He is well-respected in the private-sector, having previously served as the chief economist of Banco de Credito, Peru’s biggest bank, and also worked with the International Monetary Fund. He was also previously president of the special committee for public investment projects at ProInversion and a director of Cofide, the development finance corporation.

He was trained in economics at Peru’s Catholic University and the University of Pennsylvania, where he did his doctorate.

Segura said during an interview with state television after his appointment that the worst of the economic downturn has ended and that the government will continue to evaluate new measures to support economic growth.

“What is important is that the worst has ended. The growth figures for July, August, September should be gradually better,” he said.

On Monday, Peru’s national statistics institute INEI said the economy grew 1.16 percent in July, which is a weak performance but better than the 0.3 percent reported in June.

The private sector is backing Segura’s appointment.

“It is a change in the person, but there will be continuity and there won’t be changes in the economic path,” Oscar Rivera, the president of Peru’s banking association, Asbanc, said in comments to state news agency Andina.

Peru’s largest business organization, Confiep, said that Segura’s greatest challenge will be to reduce red tape in order to facilitate investments, which would give a boost to the sluggish economy.   In his role as chief adviser in the Ministry, one of Segura’s main tasks had been to find solutions to the red tape problems.

“Alonso Segura has all the conditions to do things well and win a spot in the successful history of Peru,” said Confiep president Alfonso Garcia-Miró. “Being very young, he has stood out in the private sector. Segura is coming in with an absolutely positive and optimistic attitude, which is how economic leaders in the country should be.”

The National Society of Industries’ president, Jose Luis Salazar, called on Congress to give the new minister full backing in his efforts to cut down the entangled permitting processes and make public and private investment easier.

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One Comment

  1. I wish the new minister of finance the best of luck in reforming the government . Any person or company that has experienced the difficulty of importing or exporting any products, will have a good insight of the antiquated government laws and regulations , that suppress the economy. I gave up several years ago, trying to start up any type business in Peru. The heart ache of clearing customs import regulations and taxes at the port in Lima, is just not worth it. Peru produces many excellent products that are world class, such as the tea produced in the Quillabamba area. They better than any of the asian teas . I have a friend who is the principle buyer of products, for one of the largest supermarket chains in the United States, i sent him some of the Peruvian tea products that i like. He agreed that the Peruvian teas are excellent, but it is easier to buy and import the asian tea products. I also asked him if their corporation would ever expand into the Peruvian market, i received just a laugh, then a quick no. I asked why? He said they looked into several south american countries, the levels of corruption and lack of government cooperation made it too risky.

    If any person wants to see the level of corruption in Peru, just ask any local person about the present election campaigns for the local city mayor offices. Almost everyone has a few stories about the last mayor , who siphoned off large amounts of cash, for friends and family. There are so many small time mayors, that it is impossible to place any controls on where does the money go. About 90% of all local mayor offices should be eliminated. Another big problem in Peru is the banks, they charge small business about 24% on a business loan, that is with good credit and lands or buildings for security. The Peruvian banks get their money from the American Federal reserve bank for less than 2% .

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