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Instability, whether in terms of politics, the economy and public safety, is not directly related to the labour market. But it does, of course, influence it. A recent BBC report showed that more than 420,000 Peruvians left the country in 2022. This figure exceeds the average number of Peruvians moving abroad in the last thirty years by more than 100,000, and includes many young people who have completed school, university or technical education.

Peru’s ‘talent drain’

Although the figures mentioned above do not necessarily imply that Peru is facing an exodus, they do reveal how uncertain the future of the country looks. This is because, according to the same report, the reasons for this flight of talent from Peru are related to instability and the political crisis, concerns around safety, the economic effects of the pandemic and the development of migration networks in recent years which, now that they’re operating, can make it easier for those considering emigrating to leave. The problem is that many of the people leaving the country are young people, and those with skills, whose departure diminishes our human capital. Without these people, the country as a whole is less productive.

The effects of this are already being felt in the formal sector. A Vistage survey of executives found that one out of every three employers will not carry out the hiring they had planned for the remainder of 2023. And to this could be added that it is possible that hiring in recent months has not been on indefinite contracts, but rather through temporary contracts. This means that formal employment will not grow at the pace we would like and investments in training will not be very large, since there is unlikely to be significant investment in those personnel who do not have a continuing relationship with a company.

Labour market outlook

On the other hand, the latest figures from Apoyo’s SAE indicate that the increase in income from labour informality will be very low, which once again gives an idea of the underemployment that characterises Peru and the low competitiveness that can be expected from our labour market as a whole, due to high levels of informal work that is often unproductive.

The common denominator is that political and economic instability creates uncertainty not only for investors, who stop investing in the country, but – and this is worse – this perceived lack of future prospects leads younger people to leave the country if they can. Those who stay are forced to participate in a predominantly informal labour market, where their possibilities for training and learning are very low.

Growth figures published recently predict that our economy will only begin to show better results next year, provided that phenomena such as El Niño do not affect us more than usual and that, as a country, we do not continue to impede economic growth. Insecurity, instability and a lack of growth are the outcomes of a process that we have been consolidating since 2016, a year in which our institutions began to disintegrate. Among other major failures we can count decentralisation, the reform of political parties, the fight against corruption and the emergence of ‘occasional democrats’, as Gonzalo Banda has pointed out in a recent article in El Comercio.

Legal proposals

In view of all this, and in order to face the perceived lack of future prospects in Peru, legal initiatives aimed at reducing informality and increasing employment are often proposed. One of them is Law 31828, the Young Entrepreneurship Law, which, despite its good intentions, is little more than a band-aid solution to a much bigger problem. Though the former Minister of Labour, Fernando Varela, announced an initiative aimed at reducing informality, this has not been taken forward due to his recent departure from the cabinet.

We should not fool ourselves or expect things to change with isolated initiatives, because while these initiatives do express good intentions, the reasons for widespread pessimism when it comes to the future of the country are connected to the problems mentioned at the beginning of this article. That is why we need to become aware of what we are doing and going through as a country. We must start working on improving the situation now so as not to see things deteriorate such that our young people leave and those who stay suffer. It is up to the Peruvian State to create the conditions for confidence to be restored. And it is up to us, the citizens, to demand that this happens.