LF: What is the essence of your economic philosophy?
Humala: What I have tried to do is to comply with my duty. As President of the Republic, my duty is to go all out and not fail to meet the expectations the Peruvian people have of me.
On the economic issue, I do not think that any government policy can be successful if we do not have a successful economy. It is like in a family: economic stability in a family allows for stability, peace of mind and development so that there can be a happy environment.
When I took over the presidency there was a great deal of uncertainty. There were sectors that had power in the past, de facto power, that immediately wanted to pressure the administration, but we have not accepted any kind of pressure.
We are following a new focus. We believe it is important to strengthen and foster the country’s economic growth, but if this growth is not distributed to everyone it serves no purpose. Economic growth is to have money in the treasury, but development is about quality of life. We need to solve this equation.
LF: How, specifically, are you seeking to do so?
We have created a social policy for the country by transforming existing social programs, with two main approaches. The first approach is multi-sectoral, with all ministers having a role in social inclusion within social programs. The second is a territorial focus. This is being carried out with regional governments and mayors from the different regions of the country. It is one thing to consider the problem of healthcare from the point of view of the sector or within the ministry; it is another to see healthcare from the perspective of a mayor or regional government. It is like the difference between an X-ray and a CAT-scan.
We inherited a series of social programs that were disjointed, that did not share goals or have clear objectives. These programs in many cases acted independently and, even worse, were often run without a technical focus that gives a program meaning. Instead, they were politicized. The governing party would include their people in the programs and turn them into a source of political clientelism.
We have radically changed this. We saw the need to create a new ministry, the Ministry of Development and Social Inclusion (MIDIS) that has allowed us to organize social programs, in some cases restructuring, and in others creating, new ones.
In addition, each sector has a program, or implementing agency, that allows it to contribute to social programs. The Ministry of Energy and Mines, for example, has the Energy Social Inclusion Fund (FISE), which is a new program that provides economic assistance to families living in extreme poverty so that they use gas to replace wood or coal. It is helping to make the use of gas more widespread, curb illegal deforestation and minimize the use coal.
LF: Some would say that today as president you are a changed man from the Ollanta Humala of 2006.
Humala: I began by saying that I would comply with my duty. What I am doing is complying with my duty, which is to follow through on policies that are completely coherent with the campaign.
I offer the Peruvian public social inclusion. The economic model cannot only be focused on growth. The famous trickle down theory – if you fill the pockets of the rich and it will spill over – does not work because the pockets you are filling have holes. I promised social inclusion, which is development hand-in-hand with growth. We need to sustain growth. We cannot kill the goose that lays the golden egg, but create the conditions for it to lay more eggs.
I am correcting what I criticized as a candidate. I said I would create a windfall tax on mining and this is one of the first things I did as president. We created the mining tax (gravamen minero), but unlike those who did not know me, who thought I was going to do it based on coercive methods, with threats of nationalization, I did it through dialogue with the companies, by explaining the country’s needs.
It is important that companies have a favourable environment for their investments. And that’s what we did. That’s it: I am complying with my duty.
People say that there are two Ollantas, one the candidate, the other the president. But that is not true: I am the same person who wants to follow through on my commitment.
I am a military man and something I learned about strategy is that the best battle to win is the one that is not fought. There are pyrrhic victories where you end up as badly as if you had lost. I do not look for too many battles but when I enter the battlefield it is because I have trained to win. I do not fight battles that I don’t think I will win.
Besides, as president I prioritize what I need to do over what I want to do. Finally, when you assume the presidency, there are some obligations that are not written. One of these is to unite Peru, not divide it.
LF: The confidence that Peru’s economic miracle has inspired is astounding. How will you maintain today’s growth levels? Do you see any risks amid the jubilation?
Click through to read Humala' comments on taxes, protectionism, his legacy and his regrets