The Financial Times, and its reporter Gideon Long, can’t let go of Peru, in the persons of Pedro Castillo, Guido Bellido and Pedro Francke! Old Socialist comments

Mr. Long’s unsurprisingly inauspicious opening paragraph, in regards to Pedro Francke:

Pedro Francke has been called many things in recent weeks: a moderate in a radical leftwing government, a Marxist who will wreck Peru’s standout free-market economy and a turncoat for accepting the finance minister job in President Pedro Castillo’s administration after initially refusing

Mr. Long in his fifth paragraph is the briefest examination of Peru’s Economy:

While Peru’s economy has been one of Latin America’s success stories in the 21st century, recent political instability has taken the shine off. The country has also been hit hard by coronavirus: it has the highest per capita death rate in the world, and gross domestic product fell 11.1 per cent last year.

Here is an alternative view to Mr. Long’s enthusiasm:

Peru’s strongest interest groups were its business confederations. The most powerful was the Confederation of Private Entrepreneurial Institutions (Confiep), founded in 1984. By the 2010s, Confiep comprised more than 20 business organizations, including the especially influential associations representing extractive industries and financial services. Confiep enjoyed powerful support networks in public relations firms, the media, and think tanks, and influenced key government appointments.

By contrast, grassroots organizations were atomized; they were often strong at the local level but were rarely able to collaborate and develop national-level organizations (Vergara, 2015). One exception was the Indigenous Association for the Development of the Peruvian Amazon (AIDESEP), representing the Amazonian indigenous people. Yet, even AIDESEP remained unconnected to any political party (Gustafsson, 2018, p. 53). The challenges to national-level popular organizations in Peru included the withdrawal of collective rights in Peru’s 1993 constitution and the Shining Path’s assassination of leftist leaders and its discredit of leftist ideologies.

Another important force was illegal: the drug trade. Since the 1980s, Peru and Colombia have vied as the world’s largest cultivators of coca. In Peru, most coca is grown on the eastern slopes of the Andean mountains; in the 2010s, the area of greatest cultivation has been the Valley of the Apurímac, Ene, and Mantaro Rivers (VRAEM), on the eastern slopes of Peru’s central and southern highlands. In United Nations estimates, the area under cultivation between 2010 and 2015 was between 40,000 and 60,000 hectares (UNODC, 2016). Peru’s coca and cocaine are shipped out of Peru through its ports, headed north to the United States, or by air or land east to Bolivia, Brazil, and Europe. Revenues were immense. For example, in 2012, just one of many money launderers active in the VRAEM was charged with laundering more than $100 million (Bajak & Salazar, 2012).

https://oxfordre.com/politics/politics/view/10.1093/acrefore/9780190228637.001.0001/acrefore-9780190228637-e-1706

The reader might arrive at an inconvenient conclusion, that Confiep , AIDESEP and VRAEM share political power and influence beyond the reach of any party or faction?

More of ‘hard left hysteria’, to play on the political fears of the very exclusive readership of The Financial Times. The available numbers are 1.1 million: 960,000 digital and 140,000 print. It’s competitor The Economist 909,476 print , this, combined with its digital presence, runs to over 1.6 million.

Castillo’s election on a hard-left ticket rattled financial markets and sent capital fleeing, pushing Peru’s currency, the sol, to record lows against the dollar. The day after a hardline leftist, Guido Bellido, was named prime minister it registered its biggest one-day drop in seven years. It has since stabilised but not rebounded.

The condition of the sol, must be in the ‘rebound’ column rather than the ‘stabilised’ column?

The Castillo government has set up a “special commission” to reverse that trend, and Francke said he expected the sol to recover. “I think we’re going to see greater calm on the markets,” he said. “If I had to make a recommendation to investors, I’d tell them they shouldn’t sell sols to buy dollars. It seems to me they [dollars] are a bit expensive.”

The question of who Pedro Francke is before the readers gaze, in the above quote and below:

Francke prefers the terms “modern leftist” or “moderate leftist”.

“I’m a leftist who believes that reducing inequality is absolutely fundamental and perfectly compatible with reasonable macroeconomic management,” he told the Financial Times. “The two things can go hand in hand.”

‘A former World Bank economist’ is the ally of Castillo and Bellido: at sixty Francke will make the leap from Left-Wing Social Democrat to what? Marxist or ‘Hard-Line Leftist’? Or is he more likely a follower of Piketty, or simply his attentive reader?

Francke’s revelatory quotations speak for themselves: (In italics)

“If it’s not broken don’t fix it,” Francke said. “We have enough problems in Peru to start fixing things that are working well.”


“How can it be that a Chilean, a Chinese or an American comes to Peru and has the same rights as a Peruvian on economic issues?” he asks. “This doesn’t exist anywhere in the world.”

Asked about the comments, Francke said they reflected his personal opinions but “I am now in another role”.

“I’m answering as the minister of economy and finances in August 2021,” he said. He also acknowledged the new government could “only work within the political space we have” — a tacit acceptance it might be thwarted by congress, where Castillo’s party has only 37 out of 130 seats.

Mr. Long attaches an political comment to Francke answer: ‘— a tacit acceptance it might be thwarted by congress, where Castillo’s party has only 37 out of 130 seats.’

“If you look at the economic measures that President Castillo unveiled in his inauguration speech, none of them require a constitutional change,”

“It’s very negative that just one week into the new government, people are talking about impeaching the president or shutting down congress,” he said. “These are problems that come from the constitution.”

“This is a government of change and I understand that generates a certain lack of confidence, turbulence and misunderstanding.”

“But we absolutely respect private property and we’re absolutely opposed to any proposal for exchange rate controls and price controls. We have a clear policy of fiscal responsibility.”

https://www.ft.com/content/69eae055-3903-4806-8389-82ffe0afa0f6

I have copied directly from the Long’s essay. I have attempted to quote Francke’s own words, as presented, without the ideological interpolations the writer supplies.

Old Socialist

About stephenkmacksd

Rootless cosmopolitan,down at heels intellectual;would be writer. 'Polemic is a discourse of conflict, whose effect depends on a delicate balance between the requirements of truth and the enticements of anger, the duty to argue and the zest to inflame. Its rhetoric allows, even enforces, a certain figurative licence. Like epitaphs in Johnson’s adage, it is not under oath.' https://www.lrb.co.uk/v15/n20/perry-anderson/diary
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