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Peru 2015 | ECONOMY | INTERVIEW

TBY talks to Martín Pérez Monteverde, President of The National Confederation of Private Business Institutions (CONFIEP), on the state of the economy, the Trans-Pacific Partnership and FTAs, and environmental issues.

Martín Pérez Monteverde
BIOGRAPHY
Martín Pérez Monteverde holds a degree from Universidad Pacífico as well as from Universidad de Piura. He has over 20 years’ experience in the private sector developing his skills in strategic thinking, creativity, negotiation, analytical skills, and the ability to promote and manage change. In the public sector he has five years of experience as Congressman of the Republic and Minister of State in the portfolio of Foreign Trade and Tourism.

What values does CONFIEP promote in the Peruvian economy?

We promote the principles of an open and free economy. It is important to differentiate principles from interests. Usually, each union takes care of their own interests, but as an umbrella organization of all industry organizations in Peru, we try to promote more universal principles of democracy, free market economics, respect for the environment, and fair trade.

What does this mean in terms of practical actions?

We strongly support free trade agreement (FTA) negotiations. FTAs are not only a market access issue, but have also helped labor unions obtain much better conditions in Peru, having fostered improved relations between business people, companies, and producers. The private sector, especially CONFIEP and others have played an important role in promoting FTAs and informing citizens what an FTA is and how it benefits the nation. Once public support is in place it becomes easier to proceed with negotiations. Now, 95% of all our exports are under FTAs and we export to around 195 countries.

What are the benefits of the Trans-Pacific Partnership (TPP) for Peru?

Around 95% of our exports are already going duty-free to 195 countries, which confirms our commitment to FTAs, and the TPP is set to become the largest commercial platform in the world. I am sure that the government is taking care of the situations we may have in the future within TPP because we already have FTAs with Canada, the US, Chile, and many other countries that were part of the TPP; there are many other countries that we were not linked to. It is important to send a message that the whole APEC should benefit from an FTA, with an open economy and open opportunities. There are always people who will oppose free trade agreements, but as I said, the important consideration is not merely market access, but the nature of our interaction with all our partners. We should ideally also move on from open markets to the free movement of people and labor, rather than goods alone. Financial integration is also an interesting issue, guaranteeing the free flow of capital. We also need to harmonize sanitary and phytosanitary standards (SPS).

What efforts does CONFIEP make to improve conditions for SMEs?

In Peru, we face the challenge of shifting from an informal economy to a formal one. Unfortunately, 70% of our labor still works in informal conditions. The major challenge for Peru is be to reverse this trend, as formal workers are three times better off than their informal counterparts. If we really want to become a developed country, let's say in 20 or 30 years, then we must develop a better perception of taxation, because 30% of citizens cannot fund the entire 100%.

How would you characterize the extent to which environmental issues are integrated into public policy in Peru?

Despite considerable informality and the need for greater institutionalization, it is clear that one of the most pressing issues is to convince the public of broader national concepts. People often have doubts, and while environmental issues are something that developed countries take seriously, developing economies have yet to reach that stage. There are many serious efforts underway; however, people have a tendency only to remember the mistakes of state-owned companies. Some private companies have done the same. I remember when I was young and the government struck oil in the Peruvian jungle, the most published picture in the news that day was people in the middle of the jungle bathing in the jet of oil spouting from the ground. This was just 25-30 years ago. Respect for environmental issues is something that every citizen in the world should have. We still have more to do, not only in Peru, but in general.