Pedro-Pablo Kuczynski; Peru's Main Money Man.(Interview)(Excerpt)

No economic-policy czar in Latin America has a more glittering resume than Pedro-Pablo Kuczynski. A graduate of Oxford and Princeton, Kuczynski was not yet 30 years old when he was named deputy director of Peru's central bank in 1967. An outspoken champion of the export-led, free-market policies that have drawn fire throughout South America in recent years, he was appointed Economy and Finance minister by Peru's newly elected President Alejandro Toledo in 2001--and was fired a year later amid violent protests over proposals to privatize state-owned electric utilities. Kuczynski returned to the ministry a year ago this month, and during both of his cabinet stints Peru has outperformed nearly every other Latin American economy. Now the 66-year-old finance man is being mentioned in some quarters as a possible candidate in next year's presidential elections. NEWSWEEK's Joseph Contreras spoke with him earlier this month. Excerpts:

CONTRERAS: What persuaded you to rejoin the cabinet of a president who has an approval rating of less than 10 percent and had previously fired you?

KUCZYNSKI: We had made a lot of progress on the economy, and I felt that if I came back I had a chance of getting this to be a more permanent feature. And it has turned out to be the correct bet. Our growth last year was 5 percent, with lowish inflation of 3.5 percent.

In light of such impressive numbers, how do you account for Toledo's abysmal approval ratings?

Toledo comes after almost 30 years of either dictatorships or governments that weren't so democratic. People expect Toledo to solve all the problems of the last 30 years, which included an enormous increase in relative poverty, so I think part of his unpopularity comes from that.

Peru emerged from the recession of the late 1990s long before any other major Latin American country. Why?

This administration has done nothing to change the rules of the game. It remains an economy that's very open and very liberal [with] no capital controls and relatively low tariffs. The international environment is highly positive. How can you miss, when copper is $1.40 a pound, gold is above $400 an ounce and zinc is $1,000 a ton? You'd have to be a total dunderhead to miss in those circumstances.