Aug. 27, 2015

Piero Ghezzi Solís


Piero Ghezzi Solís

Minister, Production

TBY talks to Piero Ghezzi Solís, Minister of Production, on how the private sector is contributing to growth, how the industrial sector is contributing to economic expansion, and the importance of the fisheries industry.


Piero Ghezzi Solís is an economist with broad experience in the financial sector and academia. From 2007 to 2013, he served as Head of Research for Emerging Markets for the financial services firm Barclays Capital in London. From 2008, he also assumed the role of Chief Economist in the same institution. From 1999 to 2007, he worked for Deutsche Bank. He has a bachelor’s degree in economics from Universidad del Pacifico in Peru and a PhD in Economics from University of California at Berkeley.

The year 2014 was marked by several challenges and opportunities. How is the Ministry is responding to the new conditions in Peru?

The government is responding proactively to the economic slowdown, and is implementing a series of measures that will drive economic growth in 2015. In July, we launched the National Productive Diversification Plan (PNDP). Peru's growth has been driven mainly by the mining sector, though we have other potential sectors such as agricultural exports. Fundamentally, our diversification strategy needs to stimulate other sectors. In that sense, we have begun work on technical committees with representatives of private associations to collect their proposals in terms of public assets.

What are some of the tools and initiatives implemented to improve productivity?

We have a group of formal, modern, highly-productive enterprises and a larger group of SMEs (Small and Medium Enterprises) that are characterized by informality and low productivity. We look forward to working with both companies because we need to increase the average productivity of the whole economy. In order to achieve this we have created the Centers for Technological Innovation (CITE), which aims to support technology transfer to SMEs. Currently, Peru has five centers, however, our goal is to reach at least 30 in 2015 and 47 in 2016. This model has already yielded results, but we are extending it to make it viable on a macroeconomic scale.

What is the importance of the availability and expansion of credit to SMEs?

The economy as a whole has high liquidity, but the cost of funding for some SMEs is very high. We are addressing this situation from at least two fronts: in July, the Congress approved the law that allows us to improve the financial market for SMEs through factoring. We need to ensure that when an SME will go to a large company, you can use your bill in a bank or similar institution for liquidity at a lower rate. What we are doing is to ensure that, in accordance with the law, it is clear and established that the invoice can be used as a guarantee statement. This will significantly reduce the cost of working capital of SMEs that provide goods or services to larger companies.

How have improvements in infrastructure investments helped to increase economic growth, particularly in the industrial sector?

Peru has a huge gap in infrastructure as there is about 6% of GDP spent on public infrastructure, and this will continue. We have a plan to increase productivity and public procurement for SMEs. If a government institution requires something that the local industry can provide, it should do so. Better infrastructure and better business conditions will reduce business costs further and make the country more competitive.

The fishery sector has experienced a costly slowdown this year. What is the future of this sector in Peru?

We need to encourage aquaculture, since currently only 1% of Peruvian production belongs to this segment compared to almost 50% in the rest of the world. There is high potential in this sector, as we know that fish stocks in the oceans are not growing and there is a limited amount that can be drawn if we maintain sustainable levels. Further growth needs to come from aquaculture, and the Ministry is establishing an innovation center and a technical committee to find new ways to work with the private sector. Besides anchovy, Peru has other options that can increase fishing significantly.

What is the importance of diversified industrial and fishing sectors for the economy?

Diversification is extremely important because we want to reduce our exposure to volatile commodity prices. Peru has the right macroeconomic conditions such as low and stable inflation and a strong financial sector. We still have several industries that have not taken off yet, and to consolidate growth, we need to ensure that these industries emerge and contribute to the economic growth of the country.