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
10 1980 Dec.
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
Published on Sep 14, 2007
this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...