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Thursday, June 5

Bloomberg Peru Demonstrations Undermining Toledo's Control, FT Reports: "Analysts said Toledo has failed to provide any strategy for spurring economic growth, improving revenue collection, or attracting foreign investment, the FT reported. About 60 percent of Peru's businesses are unlicensed and tax revenue amounts to only 12 percent of gross domestic product compared with 36 percent in Brazil, the newspaper said." This is a rewrite of a Financial Times article, and manages to be contradictory. Peru is the "hottest" economy in Latin America so how can the government be slighted for not spurring economic growth. It's a lousy tax collector because of the huge size of the informal economy (black market) that even legitimate companies participate in for survival. Comparing Brazil to Peru is like asking why Mike Tyson would always win a bout with a flyweight.

It's sad to say, but if Peru grew any faster, it could probably not be able to absorb the capital flow. It would generate inefficiencies. On the other hand, there are plenty of things to blame Toledo and his people for, but this synosis did not mention any of them.

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