Mary O’Grady writes about the reasons behind Peru’s recent economic success: A market model that allows for
- a vibrant consumer class that is entrepreneurial and creative
- openness to imports
- structural reforms that included ending a punishing system of import tariffs and quotas
- fiscally conservative governance.
Still, the downturn in commodity prices is eating into growth and the slowdown that began last year continues. Market forecasts for GDP growth are in the 3% range for 2015. Peru’s economy is performing far better than most in the region, but lackluster is not what Peruvians have come to expect.
The obvious answer to this lethargy is more aggressive trade opening on key products like sugar and corn, more tax cutting and deregulation. But Mr. Humala’s popularity is sagging and he is unlikely to do anything bold. Meanwhile, opponents of economic freedom will turn slower growth into opportunity by linking stagnant incomes in the market economy and corruption.
As O’Grady points out, this means Peru Is Chavismo’s Next American Target
Corruption scandals give the left an opening in the 2016 presidential election.
On a seemingly unrelated topic,
The Obama administration insists on easing restrictions on Cuba’s merciless Communist dictatorship while Cuba’s dependence on Venezuelan oil goes bust. Once Cuba’s economy improves cosmetically (because you can bet those in power will not give up their acquisitiveness), the Cuban propaganda machine will use this as another tool in its propaganda arsenal against market economies.
No matter how ruinous Cuban-driven Chavismo is in real life; propaganda is the only thing Cuba’s regime is good at, and it is particularly effective in Latin America.
Face it: The fact that the article talks about Chavismo – instead of Castrocommunism – itself is a success for the Cuban propaganda machine; in reality, “The Venezuelan regime is a puppet controlled by the Cubans.”
Hernando de Soto’s excellent book, The Other Path, available on Kindle for under $10, and Ian Bremmer’s The End of the Free Market: Who Wins the War Between States and Corporations?