Interview with Pedro Pablo Kuczynski
Over the course of a prestigious professional career, Pedro Pablo Kuczynski has done outstanding work in the private as well as the public sector. Having studied economics at Oxford University and Princeton, he has held important posts in multilateral organizations, leading banks, and the Peruvian government. The latter include President of the Central Bank of Peru, Minister of Energy and Mines, Minister of the Economy and Finance, and the role of Prime Minister.
Is it possible to give a brief summary of the changes that have taken place in Latin America and the Caribbean over the past half-century? I would say that what has happened is most obvious. The region has grown and changed in many ways, but at the same time it has the world’s worst income distribution with poverty rates that are still very high. In the same time period, not only has Eastern Europe emerged as an economic power, but Asia as well. Thus, global performance has had some very positive aspects, but in the same breath it has brought some letdowns. On the positive side, what would stand out? The fact that Latin America shows a sizable growth in its middle class, which wasn’t the case in 1959 when the IDB was created. Also, social and health services have improved, as well as telecommunications. Overall, Latin America is a society on the road to modernization. And on the negative side? We have a wealth distribution that is measured in a Gini coefficient that’s close to .055 and is behind other
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regions of the world. There are different cases within Latin America with some countries better off than others, but also with some wealthy nations showing inconsistencies. I think the main cause for this inequality has to do with there being a lot of poor people, which goes without saying. And with few exceptions, governments have not learned how to provide services and succeed in including lower-income populations in the economy. What do you think has happened with poverty? There are two basic factors that explain it. The first is education, with levels of schooling that are still low and problems with quality. The second is infrastructure, which is still trailing behind, and that dooms millions of people to fall further behind. Why did the gap with Southeast Asia widen? There are a number of reasons. Without question, one very important factor in Asia was the high level of savings that allowed them to move ahead with sizable investments once the local economies opened up. It