Page 72

National Strategies Case Study

international context and the economic globalization evidenced the need to embrace these trends. The experience of other countries with a similar degree of development, the private sector itself that demanded a change of models, and the conditions imposed by the international institutions and the international community created the conditions for the devising of a new economic and development model for Peru. Starting in August 1990, a market development and open economy model began to take shape. To get started, an emergency anti-inflation program was applied, which was followed by a gradual strategy. Fiscal deficit was eliminated and a tax reform was implemented. The various markets that had remained subject to controls for many years were liberalized, namely: the goods and services market, by removing controlled prices and state monopolies; the foreign exchange market, by setting a free-floating, market-defined exchange rate; and the financial market, by eliminating controlled interest rates. Also, barriers to foreign investment and the free movement of capital were eliminated, embarking on a privatization and concession-granting process. Regarding Peru’s participation in the international context, the priority lied with integrating the country into the international community and the economic globalization process. This was done by taking the required steps toward the financial and investment community, implementing a trade policy in line with an open economy. The trade policy featured several components. The tariff policy was simplified by doing away with more than 56 tariff levels, cutting them down to only 2; the tariff weighted average was brought down from 70% to 16%. Para-tariff barriers were eliminated, as well as pre-import permits, the manufacturing register (which prohibited the import of items in 559 tariff headings), sectoral permits, and the proceedings required to obtain foreign currency, among others. A customs reform was also necessary to address the challenge presented by growth in foreign trade, in its two-fold role as a trade facilitator and custom revenue generator. These initial steps contributed

CHART Nº 2. Perú: Average Tariff & Tariff Dispersion (Dec. 1980–Jul. 2007) 80 70 60 50 40 30 20

Average

2007 Jul.

2006 Dec.

2005 Dec.

2004 Dec.

2003 Dec.

2002 Dec.

2001 Dec.

2000 Dec.

1999 Dec.

1998 Dec.

1997 Dec.

1996 Dec.

1995 Dec.

1994 Dec.

1993 Dec.

1992 Dec.

1991 Dec.

1990 Dec.

1989 Dec.

1988 Dec.

1987 Dec.

1986 Dec.

1985 Dec.

1984 Dec.

1983 Dec.

1982 Dec.

0

1981 Dec.

10 1980 Dec.

66

Dispersion

Source: Central Reserve Bank of Peru, Ministry of Economy & Finances, “Politicas arancelarias en el Peru ” (Tariff policies in Peru), 1980–1997, Boloña-Illescas Prepared by : the Office of International Economy, Competition and Private Investment Affairs (DGAEICIP) - Ministry of Economy & Finances

mobilizing aid for trade: focus on latin america and the caribbean: proceedings of the regional r...  

this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...

Read more
Read more
Similar to
Popular now
Just for you