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PROFILE: Pen Portrait of a Quintessential Reformist

President Ollanta Humala3

In 2015 when Lima, Peru hosts the Annual Meetings of the International Monetary Fund/World Bank, President Ollanta Humala would have scored another feat. This is perhaps a fitting reward, by the international community, for the astute management of the economy which has seen Peru make great strides in its development in the years since he emerged as its 94th president.

Recently, Americas Society/Council of the Americas presented President Humala with the Gold Insigne, the organization’s highest honour, in recognition of his extraordinary accomplishments. The award is specifically conferred on democratically elected heads of state from the Western Hemisphere who work to promote greater awareness of the cultural, social, and political realities of the region, and greater understanding among the nations of the Americas.

Another feat recorded by President Humala is that he has revolutionised education in Peru with emphasis on innovation, science and technology.

With barely 12 months to the 2015 annual meetings of the IMF/World Bank, President Humala and members of his cabinet are collaborating with the IMF and the World Bank Group to ensure the success of the event. Unprecedented efforts are being carried out to build an infrastructure that will turn the capital of Peru into a preferred destination for even other important international events.

Peruvians are beautiful, warm and loving people. Delegates should therefore look forward to an experience of a life-time. The weather during next year’s meetings in October is spring time. Therefore, delegates would experience clement weather.

Peru boasts of vistas of investment opportunities and the government has created an investment-friendly environment. Peru is a country that features practically all of the planet’s climates, with remarkable natural, mining, and power resources. According to FAO figures, Peru, the third largest country in South America, has 7.6 million hectares of land with immediate agricultural potential, but less than 3.6 million are actually used. This paves the way for a good agriculture-based commodity segment as an investment opportunity.

The country’s top exports apart from agriculture products include copper, gold, zinc and crude oil. The country’s Ministry of Energy and Mines estimates that only 10% of the overall national territory with mining potential has been explored so far.

Peru equally has a lot of potential in tourism especially in the area of ecotourism.

No doubt, the 2015 WBG/IMF Annual Meetings will provide the country with a unique opportunity to strengthen its increasingly relevant position in the global stage.

Under President Humala, Peru has recorded high growth rates, low inflation, macroeconomic stability, reduction of external debt and poverty. Significant advances in social and development indicators have been recorded. Prudent macroeconomic policies and a favourable external environment enabled GDP growth rate of 5% in 2013. Even though it is expected to dip in the current year owing to lower commodity prices that have hurt mineral exports, the administration believes it will see an upward trend in the years ahead.

With $6,660 per capita income, Peru is classified as an upper middle-income economy by the World Bank and is the 40th largest in the world by total GDP. It currently has a human development index of 0.741. Inflation rate in Peru in 2013 was 2.9%. In 2012, public debt as a share of GDP was 19.8%, including local government debt. The main rating agencies —Standard & Poor’s, Fitch, and Moody’s — rated Peruvian sovereign debt as investment grade level.

Foreign Direct Investment (FDI) has continued to rise in Peru since President Humala assumed office in 2011.  The country received more than US$4.1 billion in FDI during the first quarter of 2013, a 15.4% year-on-year increase when compared to the same quarter in 2012, underscoring the country’s impressive returns on investments as well as political and macroeconomic stability.

The policy advances of President Humala’s administration and a stable macroeconomic framework are helping Peru face its development challenges.  The  economic programme of  his administration aims at providing equal access to basic services, employment and social security; reducing extreme poverty; preventing social conflicts; improving the surveillance of potential environmental damages; and reconnecting with rural Peru through an extensive inclusion agenda. All these are in fulfilment of the President’s promises of giving Peru’s poor a greater share of the country’s considerable mineral wealth and putting “Peruvians first.”

Peru’s economy is one of the fastest-growing in Latin America, but poverty remains persistently high. The President says he knows this but insists that “the nation will only advance if the Peruvian family advances” and is making concerted efforts to fast-track the nation’s economic growth trajectory.

Already, the President has mapped out economic measures to boost domestic demand and offset tumbling mining exports that have dragged growth to its weakest pace in the recent times. The measures would build on an earlier raft of reforms approved by the Peruvian congress designed to lure more investments by cutting red tape, easing environmental rules and locking in tax rates for big mining projects.

“Peru has solid fundamentals to not just pass these measures and dynamize domestic demand and supply, but also to keep taking steps so that we get through this slowdown as soon as possible,” Humala says.

President Humala is firmly committed to promoting trade and foreign investment, particularly in projects that generate employment, promote the development of science and technology and encourage the production of high value added products and services. The President says he is determined to diversify the commodities-based economy so that the country would depend less on raw materials and more on the training, intelligence and the talent of Peruvians.

President Humala’s sterling leadership qualities and managerial acumen have been largely shaped by his academic-cum-professional background. Before his foray into politics, the 52-year-old Peruvian leader had a successful career in the military which spanned over 20 years and held positions such as the Deputy Military Attaché of Peru in Paris, France and the Military Attaché in the Embassy of Peru in the Republic of Korea. He attended a military academy in Lima and has a master’s degree in political science from Lima’s Pontifical Catholic University.

A former left-leaning military officer who has transformed to a pro-business leader, President Humala’s economic policies have helped drive robust growth in the country. He perceives the current economic slowdown in Peru as “temporary.” He is optimistic that Peru will sustain its current rating as the country “with the strongest growth and lowest inflation in the region.”

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