Publisher: The Palacín box

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Since its inception, the government of Pedro Castillo has shown an indefatigable vocation to appoint people with serious questions of a moral nature, criminal records or without the proper scrolls (if not all three together) in key positions. In these cases, the designations have responded rather to a criterion of party affiliation (those affiliated with Free Peru or close to their leaders) to the detriment of experience or specialization.

Last week, for example, several specialists warned about the potential risks for the country of having a head of the DINI who does not show more training or experience in intelligence. What the elected José Luis Fernández Latorre does exhibit, on the other hand, are 30 disciplinary sanctions during his time with the police and three failed promotion attempts at said institution.

But the controversial appointments don’t end there.

Yesterday the supreme resolution appointing the lawyer was published in the official newspaper “El Peruano” Julián Palacín Gutiérrez as the new president of the Board of Directors of the Indecopi… a person who, very much in line with what this administration seems to be looking for, does not have experience in matters related to those of the institution that he will preside over (it is only known that he has worked in his father’s law firm), and yes, on the contrary, with an undeniable affinity for Free Peru, expressed in his two candidacies for Congress by said party (in 2020 and 2021) and in his defense of its founder when asked about his legal problems (“intelligence service sees Vladimir Cerrón as the next president of Peru ”, he told“ Panorama ”).

Indecopi, as we know, it is one of the few public institutions that have been conducted with relative success in recent years. Its fight against price agreements and cartels in some sectors, as well as its work in eliminating bureaucratic barriers, have shown that, in the right hands, it can be a valuable tool for citizens. Sadly, the reverse is also true: put in the wrong hands, it can inflict considerable, if not catastrophic, damage on the national economy.

The consequences could be multiple. Let us remember that we are facing a government that sees ‘monopolies’ anywhere, that has shown clear signs of not understanding how a free market economy works and whose bench in Congress has come to present a bill to establish control of prices. Thus, the Indecopi from Free Peru it could, for example, mistakenly use the recently implemented prior merger control to stop a valid union between two unpopular companies (or to favor a competitor of both). Along these lines, it could also sanction perfectly lawful behaviors because, in its opinion, they seem ‘monopolistic’ or to gain some points of deceptive popularity in a sector of the citizenry.

It could also control prices indirectly; for example, sanctioning alleged ‘abusive clauses’ in some businesses. Also, of course, there is the risk that the policy of eliminating bureaucratic barriers of which we spoke previously will be left on paper or that, under the gimmicky discourse of protecting local industry, anti-dumping measures will be dictated with the aim of favoring some national companies to the detriment of free competition from which all consumers benefit. In short, the command of the lord Palacin could uncover a genuine Pandora’s box with pernicious and incalculable effects for all Peruvians.

Of course, we cannot ignore here the risk posed by the possibility that what happens today with Indecopi will soon be repeated in other institutions whose appointments are in the hands of the Executive, such as Ositrán, Osiptel, Sunat or the BCR itself …, which , in a chained way, it could awaken the effect of a cluster bomb in an economy that, in itself, already shows a poor prognosis. And if within the Executive they are not interested in avoiding this scenario, perhaps in Congress they could begin to move before the damage is irreversible.

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