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Viewing cable 06LIMA3013, GARCIA CHOOSES COMPETENCE FOR HIS ECONOMIC TEAM

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Reference ID Created Released Classification Origin
06LIMA3013 2006-08-02 21:37 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0000
RR RUEHWEB

DE RUEHPE #3013/01 2142137
ZNR UUUUU ZZH
R 022137Z AUG 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 1663
INFO RUEHBO/AMEMBASSY BOGOTA 3710
RUEHBU/AMEMBASSY BUENOS AIRES 2526
RUEHCV/AMEMBASSY CARACAS 9697
RUEHQT/AMEMBASSY QUITO 0578
RUEHLP/AMEMBASSY LA PAZ AUG SANTIAGO 0765
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RUMIAAA/USSOUTHCOM MIAMI FL
RUEAIIA/CIA WASHDC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
UNCLAS LIMA 003013 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/EPSC, EB/OMA, EB/TPP 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
USTR FOR BHARMAN AND MCARRILLO 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV PGOV PREL PE
 
SUBJECT: GARCIA CHOOSES COMPETENCE FOR HIS ECONOMIC TEAM 
 
 
1. (U) Summary: President Garcia's choices for Finance Minister, 
Trade Minister and Production Minister suggest that he will maintain 
the economic policies of the Toledo Administration.  The Finance 
Minister, Luis Carranza, has not been a high-profile political 
player, but he brings sound economic credentials and a reputation as 
a committed fiscal conservative.  The Trade Minister, Mercedes 
Araoz, is a committed free trade advocate with considerable 
experience in trade negotiations.  Production Minister Rafael Rey is 
a popular center-right politician. End Summary. 
 
Economy and Finance - Luis Carranza 
----------------------------------- 
2. (U) Luis CARRANZA Ugarte is one of Peru's leading economists and 
enjoys a reputation as a fiscal conservative.  He earned his PhD at 
the University of Minnesota and worked for the U.S. Federal Reserve 
Bank in Minneapolis and the International Monetary Fund in 
Washington, before returning to Peru. 
 
3. (U) Carranza served as one of the vice ministers at the Ministry 
of Economy and Finance from 2004 to 2005, serving under Minister 
(later Prime Minister) Pedro Pablo Kuczynski and with then-Vice 
Minister Fernando Zavalla, who later became Minister of Economy and 
Finance.  He also served as a Director of Peru's Central Bank. 
Prior to being named Minister of Economy and Finance, Carranza was 
the lead economist for Latin America and Emerging Markets at Spanish 
Bank BBVA in Madrid. 
 
4. (SBU) While not widely known outside economic circles, Carranza 
has a strong reputation as a fiscal conservative.  He was rumored to 
have resigned from the Ministry of Economy and Finance in protest 
over proposed pre-election government spending.  He is also credited 
with overseeing the sale of $1.5 billion in Government of Peru bonds 
to pay off Peru's Paris Club debt.  His appointment has been 
generally applauded by the business sector and economic analysts, 
because it portends that the Garcia Administration will maintain the 
same fiscally conservative policies of the Toledo Administration. 
For the same reason, several unions and left-leaning academics have 
denounced the appointment. 
 
5. (U) Carranza is 39 years old, born on December 21, 1966.  He is 
married with two children, and speaks English well. 
 
Trade and Tourism - Mercedes Araoz 
---------------------------------- 
6. (U) Mercedes ARAOZ (ah-RAH-os) Fernandez is a free trade advocate 
and a strong supporter of the U.S.-Peru Trade Promotion Agreement 
(PTPA).  She has considerable trade negotiating experience and 
received good reviews as the Peruvian lead in the Trade Capacity 
Building group during the PTPA negotiations.  She led Peru's 
negotiating team in the Subsidies, Anti-Dumping and Countervailing 
Duties group in the Free Trade Area of the Americas (FTAA) 
negotiations, and also chaired the FTAA's Competition Policy 
negotiating group. 
 
7. (SBU) Araoz is one of six women ministers named by President 
Garcia.  She had been on a short list of candidates to be a Trade 
Vice Minister during the Toledo Administration, but the position 
went to Pablo De la Flor.  She has been a member and vice president 
of the Commission on Dumping and Subsidies Investigations of 
INDECOPI (Peru's competition watchdog agency).  She also chaired 
Peru's National Council on Competitiveness.  Prior to being named 
Minister of Foreign Trade and Tourism, Mercedes Araoz Fernandez was 
(and remains) a professor of international trade at the 
well-respected University of the Pacific. 
 
8. (U) Araoz has a Master's Degree in economics (1991), and was a 
candidate for a Ph.D. in economics (1993) from the University of 
Miami.  She is divorced with a sixteen year old daughter and speaks 
very good English. 
 
Production - Rafael Rey 
----------------------- 
9. (U) Rafael REY Rey is a very well known and prominent 
center-right politician.  Between 1988 and 1992, Rey served as 
regional secretary of the Movimiento Libertad political party. 
After President Fujimori's "auto coup," Rey was elected in 1992 as a 
constituent member of Fujimori's "Democratic" Constitutional 
Congress.  During this time, he was a Fujimori supporter.  In 1995, 
Rey broke from the Fujimori camp and joined the political opposition 
(though he still advocated pro-business economic policies). 
 
10. (U) During the mid- to late-1990s he founded, and was president 
of, two new political parties, Renovacion Nacional (RN, not to be 
confused with the later Restauracion Nacional) and Avancemos.  He 
was elected to the Congress in 1995, where he served on the Foreign 
Relations and Ethics Committees and various investigative 
commissions.  He did not run for reelection in 2006, but instead ran 
for and won a seat on the regional Andean Parliament. 
 
11. (U) Before entering politics, Rey worked in the private sector 
as an engineer and businessman.  He holds a bachelor degree in 
industrial engineering from the prestigious Catholic University of 
Peru, and also studied industrial engineering at the University of 
Piura, where his father, Ricardo Rey Polis, served as Chancellor. 
He also holds management certificates from schools in Lima (1978) 
and Costa Rica (1997). 
 
12. (U) Rey was born February 26, 1954 in Lima, and he is fluent in 
English. He is single, a devout Catholic and member of Opus Dei. 
 
13. (SBU) Various Minister of Production officials, Garcia 
transition team members and fishing industry contacts had told 
DepEconCouns that President Garcia was seriously considering 
splitting the Vice Ministry of Fishing into a separate ministry, as 
it had been before President Toledo.  The importance of fishing to 
both the domestic and export economy, and complex regulatory issues 
made this a logical move.  Rey has said publicly that he did not 
want this and assured Garcia that he could handle the ministry with 
fisheries remaining under his control. 
 
STRUBLE