Pedro Francke, Pedro Castillo's economic advisor, pictured on Wednesday in Lima. Leslie Moreno
Pedro Castillo has generated unease among Peru's economic elite. The populist leftist candidate who got the most votes last Sunday in the elections, waiting for the electoral court to resolve the cancellation of tables proposed by his rival, Keiko Fujimori, does not get on the phone easily. The country's big businessmen, accustomed to having a direct connection to power, have suddenly found themselves with a possible president whom they know nothing about and who is not easy to contact. They have not come across it in any entrepreneurship forum. To fill that void, the figure of Pedro Francke, a 60-year-old economist and university professor with credit among business circles, has emerged.
Francke joined Castillo as an economic advisor after the rural teacher's alliance with Verónika Mendoza, a more focused left-wing politician with a more urban vision. In this way, he wanted to attract the middle class who could feel intimidated by proposals similar to those of other Latin American countries ruled by authoritarian leaders. Francke was a high-level official in the governments of former presidents Alejandro Toledo and Ollanta Humala. Know the springs of power. Since his arrival, the candidate has softened many of his initial proposals. “There will be no nationalization, no expropriations, or price controls. We have put ourselves a little more in favor of the market ”, explains the advisor in the kitchen of his house, where a decaf has been prepared in an old electric coffee maker. Accompany it with a stracciatella ice cream.
That qualifies that Castillo on the stand during the campaign. He was barely known in January, when he toured all of Peru with an
anti-establishment
message
.
He often attacked foreign investment at his rallies and called for the protection of the national market by raising tariffs. The miners, according to him, had their days numbered. Their wealth does not benefit the poor, Castillo argued. These messages against the free market alarmed the business community, which supported Fujimori en masse. Among them were some anti-Fujimorists who considered Keiko's choice a lesser evil. Francke believes that Castillo was someone looking for attention: "He said all that when he did not have a very strong candidacy."
The rural school teacher has arrived here, at the gates of the Government Palace, hand in hand with a party that declares itself Marxist-Leninist, Peru Libre. With Francke, this revision of the contracts of the transnationals or some hypothetical nationalizations have become a new tax on the profits of the mining companies. Something that President Humala raised and the businessmen rejected. He believes that now the moment is different. “The difference is that the price of copper, our main import, is very high and international analysts say this has been around for a while. It is not a thing of the year, there are reasons such as the growth of China, the policy of Joe Biden (president of the United States) and a strong technological change due to a high demand for copper for electricity. I calculate that companies, only in copper, have 9.$ 1 billion in additional revenue. Then Peru can say: 'share me a little more' ”.
Go to the business community open to that negotiation.
For example, Roque Benavides, one of the great mining entrepreneurs in the country.
“He has publicly declared that yes, indeed the conditions must be understood.
It can be negotiated.
They are taking more than 5,000 of what they had thought ”, he adds.
And he clarifies: "That is putting a tax on them, but in the sense of taking away their property, then no."
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In his first debate with other candidates, Castillo started by assuring that he would propose writing a new Constitution. That implies a long process of achieving a majority in Congress - unlikely - to call a referendum and call a Constituent Assembly. What exactly do you mean when you say that the government should have greater power over the economy? “The current Constitution,” explains Francke, “has some locks that make it difficult to take some action. It says that foreign investment has the same rights as national investment. No constitution on the American continent has an article like that ”.
That is, Castillo's economic guru who believes that the text has an ideological bias.
"That's how it is.
If the left wins, it can apply left politics.
With some limits, of course.
Like, for example, the autonomy of the central reserve bank.
Yes, that must be maintained because it is the balance of powers, but also because it is the global management of the institutions of the economy.
But with these other things, I do not understand why it is positive that a Constitution tells you that foreign investment has to be the same as national investment, "he defends.
Pedro Francke, in a moment of the interview that took place in the kitchen of his house, in Lima, leslie moreno
The dollar reached its all-time high in Peru after Castillo's victory. Now it seems to have stabilized. Francke's visibility has been key to this. The economist assures that the minimum wage will not be touched by the bad economic times that companies are experiencing with the pandemic. The private pension system will not be eliminated, as Castillo had hinted and made some workers fear about the future of their savings. Of course, it will try to reform because it considers that the current one is inefficient. On applying tariffs to certain products is something that does not rule it out, as in the case of potatoes. It is rare the meeting in which Castillo did not allude to the fact that the potatoes of the Peruvian producers were rotting because they could not give them an outlet. “There should be a reasonable limit. We wouldn't go back to the seventieswhen the tariff was 70%, due to the international treaties that we have and because it is not convenient (...). But we import 30,000 tons of frozen potatoes. Peru with a little effort could produce them himself ”.
There has also been talk of reviewing the conditions of tolls. The economic advisor says that this has yet to be studied. “There is a great annoyance not because of the concessions, but because there is corruption there. The truth is that it burns me that I go through one and I know that 25% of what I pay is for Odebrecht (a Brazilian construction company that bought dozens of authorities to win public works concessions). The truth is that I do get upset. " “These legs (friends) filled all the former presidents, they threw in a lot of money. And it turns out that every time I go I pay him. The issue is complex because now they collaborate (with justice, which has led to accusations, such as Keiko Fujimori's own) and there is cleanliness, but honestly it does seem annoying. And that they are covered by the signed contract, well yes,but you got the contract because you gave money. It is not a clean contract. Anyway, you have to look at it carefully ”, he continues.
Professor Francke sounds like the next finance minister in case Castillo finally dons the presidential sash. He is an affable, didactic man. As soon as the interview is over, he will teach a class on extractive industries - the great topic that is debated in Peru - to his students at the Catholic University of Peru. He has spent the whole week on the phone and in face-to-face meetings with businessmen from key sectors such as agro-exports, textiles or fishing. Were they afraid of Castillo's arrival? "Not much. Perhaps it will be that with whom I have spoken it is like that, because it gives me the impression that those closest to Keiko Fujimori for ideological reasons reject me more. Others I would not say that they are sympathizers, but they accept a left government better, or they are more pragmatic. Perhaps the toughest have not spoken to me ”.
Castillo has often been accused of attempting to initiate the same path of nationalization that Cuba and Venezuela once undertook.
Can you assure Francke that this will not happen in Peru?
"Of course, it doesn't make any sense."
And he adds: “Of the Latin American experiences, I like the Uruguayan one the most.
Although Uruguay has an economic and political structure very different from ours.
It is different.
There are many things that make Peru a unique country ”.
-As which?
—How many countries do you know where there are several million people living above 3,500 meters high?
I will tell you that Bolivia, Ethiopia and China.
And I think Nepal.
That is a very particular thing.
Some businessmen tell me that getting their wood to Lima costs them more than taking it from Lima to Thailand.
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