The webinar "Formalizar para crecer" (Formalize to grow), organized by Universidad del Pacífico and the World Bank, served to discuss labor informality in Peru and to propose some necessary actions. The event was attended by leading economists in a roundtable discussion.
Universidad del Pacífico and the World Bank organized the webinar "Formalizar para crecer" (Formalize to grow), in order to discuss and propose policies on this important issue for the economic reactivation and growth of the country. Carlos Casas, Dean of the School of Economics and Finance at Universidad del Pacífico, took part as moderator and mentioned that it is crucial to address the issue of formalization, as it is a "quite endemic aspect in the country".
"The presence of informality means an obstacle to Peru's growth due to the different problems it can generate," he said at the beginning of the event.
Marianne Fay, World Bank Director for Bolivia, Chile, Ecuador and Peru, offered welcoming remarks and agreed with Casas. According to her, the high level of informality is a cross-cutting constraint in all developing economies and has a particular impact on the most vulnerable sectors. She added that formalization has great potential to encourage higher productivity and more dynamic and inclusive growth for Peru.
"At the World Bank, we believe that formalization should be approached as a key integral strategy for economic reactivation in the short term and to achieve robust growth in the long term," said Fay.
At the event, Daniel Barco, World Bank country economist for Peru, delivered a presentation on the problem of labor informality, based on the content of one of the World Bank's forthcoming policy briefs. In his presentation, the specialist provided recommendations for formalization to become an instrument that will boost productivity and, therefore, the country's growth.
"Formalization of the economy is an objective that offers the opportunity to increase efficiency and equity at the same time. In terms of efficiency, a formalization strategy focused on increasing the productivity of companies will have an impact on economic growth," said Barco.
Meanwhile, Claudia Cooper, president of the Lima Stock Exchange, said that causality is the other way around. "Formalization does not generate efficiency, but efficiency generates formalization. And the same happens with economic growth; that is, formalization does not generate economic growth, but economic growth generates formalization, at least in the first stage," said Cooper, who was a panelist at the event along with Miguel Jaramillo, senior researcher at Grupo de Análisis para el Desarrollo (GRADE), and David Tuesta, executive president of the Private Competitiveness Council.
Labor formalization is an opportunity for Peru to encourage business growth, innovation and productivity, in such a way that they lead to a more inclusive development of the country, an objective that must be pursued by the incoming government.