00:00Su Jitian's Li Jianhua has been speaking with Peru's former interim president, Francisco Segasti.
00:06Well, there are many challenges that the new government is going to face, and frankly, they are huge.
00:12And there is no confidence that either of the finalists may be able to face them in an adequate manner.
00:20But the first one is how to reconstitute the capacity of the state
00:25in order to face the multiple problems that are challenging us.
00:32Without a state apparatus, this means a government with good government agencies,
00:40with competent staff and civil servants,
00:44without that it's impossible to do anything you would like to do.
00:48And the last five years have seen a major deterioration of the capacity of the state
00:55in order to fulfill its basic functions, all the way from security to education and so on.
01:04So the first task of the new government would be to recover the capacity of the state
01:12in order to fulfill its functions.
01:14Peru has managed to maintain relatively strong economic growth,
01:18despite years of political turbulence.
01:21Do you think that will continue, or are we approaching a point where political instability
01:26will actually just start to undermine the economy?
01:30Well, there are two aspects that explain what is happening in Peru.
01:35This divorce between the political and social situation on the one hand and the economic on the other.
01:42What happens is that we have now a unique situation in which the prices of the raw materials and exports
01:51that we have, let's say minerals, agroindustrial products, are at the highest level they have been in several decades.
02:00So what are called the terms of trade means that those products that we export,
02:08the average price of those products that we export is really much higher than the average price of the products
02:17that we import.
02:18And this has created a bonanza that depends exclusively on the international economic context.
02:27In addition to that, we have seen the spread of illegal activities.
02:32For example, it has been estimated that about half of the gold exported in Peru comes from illegal mining operations.
02:42And this creates a kind of a sense of bonanza economic growth outside the regular channels.
02:51So what explains this discrepancy between a political permanent crisis and good economic performance are those two main factors.
03:04Illegal economies to a certain extent, but most important, the terms of trade and the prices of the primary products
03:13we export.
03:14Illegal economies to a certain extent, but they are eligible.
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