Peru: dilemmas of power

John Crabtree
8 June 2007

The Alan García administration in Peru has recently had to face a wave of protests from an array of social movements in different parts of the country. However, unlike neighbouring Bolivia, Peru's social movements remain fragmented and lack strong political leadership. The country remains politically divided, and Alan García needs to prove his mettle among those who did not vote for him in the November 2006 elections.

The tide of discontent in Peru seems to be rising, or so it would seem from a number of instances of protest in recent weeks. These have come in different shapes and sizes.

  • There have been regional protests, particularly in those regions whose newly-elected opposition leaders are under pressure to stand up for local interests against the central government. The ruling Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance [Apra] party did badly in November's elections, and in several regions power has shifted to the left. A two-day regional strike in the Ancash region, to the north of Lima, ended in casualties in April 2007
  • The coca farmers of the jungle regions of northern and central Peru have also mobilised against the government. They are bitterly opposed to the government's plans to push ahead with coca eradication. García, who needs United States congressional support if Peru is to secure the passage of its free-trade agreement with the United States - which was negotiated by the outgoing administration of his predecessor, Alejandro Toledo - also needs to be seen countering the upward trend in figures for coca cultivation
  • The government has also come under pressure from peasant communities which are in conflict with mining companies in many parts of the highlands. The most egregious of such conflicts has involved communities in Cajamarca region, in the north, and the owners of Peru's largest goldmine, Yanacocha. Communities generally are becoming much more assertive in standing up for their rights, particularly with respect to land ownership and environmental degradation. The government, keen to attract foreign investment at all costs, tends to side with the mining companies in such disputes.

John Crabtree is a research associate at Oxford University's Centre for Latin American Studies. He is the author of Peru under García : Opportunity Lost (Macmillan, 1992), Fujimori's Peru (ILAS, 1998), and Patterns of Protest: Politics and Social Movements in Bolivia (Latin America Bureau, 2005). He is the editor of Making Institutions Work in Peru: Democracy, Development and Inequality since 1980 (Institute for the Study of the Americas, London University / Brookings Institution, 2006)

Also by John Crabtree on openDemocracy:

"Bolivia's retreat from civil war"
(10 June 2005)

"Peru: the next Andean domino?" (24 June 2005)

"Bolivia on the brink"
(4 October 2005)

"An Andean crisis of democracy"
(16 November 2005)

"Evo Morales's challenge"
(25 January 2006)

"Peruvians prepare to bite back"
(4 April 2006)

"Peru's chessboard"
(18 April 2006)

"Bolivia stakes its claim" (4 May 2006)

"The return of Alan García" (6 June 2006)

"Evo Morales: the force is with him"
(4 July 2006)

"Alan García's second coming" (28 July 2006)

"Bolivia: the battle for two-thirds" (18 September 2006)

"Peru: outing the NGOs"
(22 November 2006)

"Latin American democracy: time to experiment"
(30 April 2007)Such instances of protest and dissent emanate primarily from the interior of the country, where support for Apra is weakest. The November presidential election result demonstrated a stark geographical divide in voter allegiances. The traditional parties, like Apra and the centre-right Unidad Nacional (UN) party, concentrate most of their support in urban areas along Peru's coastal fringe. The interior of the country, particularly in rural areas where extreme poverty is most in evidence, people voted mainly for Ollanta Humala, a leftwing populist. Humala successfully vented the frustrations felt by Peru's poorest citizens who have a particularly low opinion of the country's political class. Alan García only just managed to defeat Humala in the second round of elections. Humala polled more votes than any other candidate in the first round.

The November municipal election, likewise, showed strong anti-government feelings in the interior, although on this occasion Humala failed to capitalise on his presidential showing earlier in 2006. Many of those now running the new regional authorities are people who previously had ties with Peru's once powerful Marxist left. Though they no longer share a socialist ideology, they are united by distrust of Apra and a determination to increase the power of the regions at the expense of the central government.

The legacy of centralisation

Peru has long been a country of extreme centralisation. A legacy of authoritarian, and often military government, led to the atrophy of local democracy and participation. Centralisation has also been compounded by migration and demographics: around one in three Peruvians is now resident in the capital, which has also been at the forefront of industrial development. Lima's voting power therefore trumps other areas.

Since the end of military rule, there have been attempts to reverse the trend, decentralising power and decision-making. But the results have so far been disappointing, since the ruling groups in Lima have little real interest in devolving power and distributing it more equally.

During his first government (1985-90), Alan García sought to establish regional assemblies, a move swiftly curtailed by his successor, Alberto Fujimori (1990-2000), who sought to reinforce the country's top-down political system. After the fall of Fujimori, the Valentín Paniagua (2000-01) and Alejandro Toledo (2001-06) administrations sought to give fresh momentum to decentralisation, but they were unable to get very far. García won his re-election in 2006 partly on the promise to pursue this agenda, but has so far shown himself cautious in devolving power and resources to local administrations which otherwise oppose his government.

The recent protests, however, suggest that Peru's regionally-based social movements are beginning to flex their muscles more purposefully. In the years following the 1980s, social movements lost much of their political militancy. In part, this was because Peru's political parties - especially those of the left - became largely discredited. But at the same time, the legacy of political violence (with Sendero Luminoso) and the Fujimori's success in stamping it out, helped destroy formerly influential local organisations. The Fujimori government was able effectively to crush the sporadic protests, until its wider record of electoral fraud and revelations of massive corruption in government led to its collapse in November 2000.

Alan García's strategy

The strategy of the García government in dealing with the regions and some of the social movements within them appears to be one of divide and rule. The government seeks to use its control over the purse-strings to establish privileged relationships with some, marginalising others. Although some regional governments receive substantial autonomous funding, most remain highly dependent on transfers from Lima. Local officials, who want to be seen promoting public works in their districts, are reliant on central government for much of the money they need.

The Lima government is also in a strong position because with the present boom in the exports of raw materials, principally minerals, it has more fiscal resources than at any time since the onset of the debt crisis in the early 1980s - or even well before then. With the increase in tax revenues, chronic fiscal deficits have turned into surpluses. And as new foreign investment enters the country, the capacity of the government to sustain those surpluses looks good.

The problem (an unusual one for Peru) is less how to raise money but how best to spend it. The ministry of economy and finance (MEF), politically the most powerful ministry, has maintained a conservative line, particularly when it comes to authorising public investment projects outside Lima. It has done this through control over a national clearinghouse for public investment, the Sistema Nacional de Inversión Pública (Snip).

When he came to power, García promised what he called "an investment shock". This meant speeding up the process of investment decisions and increasing the amounts allocated. Having won his tussle with the MEF, García in May 2007 declared the Snip to be "in emergency" and he has announced a timetable for "restructuring".

García sees the initiation of an ambitious programme of public works as key to maintaining his popularity - which is beginning to sag - and that of his government as a whole. Experience from his previous time in government taught García that his authority as president was intimately linked to his popularity ratings. The fate of his predecessor, Alejandro Toledo, whose standing declined as his popularity vanished, simply confirmed this view. García is determined that his government will end its term in 2011 on a better footing than did his discredited first administration in 1990.

OpenDemocracy writers analyse Peru's politics:

Ricardo Uceda, "Fantasy Island" (September 2005)

Ricardo Uceda, "Peru's election: a second leap into the void"
(January 2006)

Lisa Laplante, "The cloud of fear: Peru's anti-terror lesson" (March 2006)

Justin Vogler, "Ollanta Humala: a Peruvian gamble" (April 2005)

The tensions of devolution

The government therefore faces a dilemma. On the one hand, it wants to increase investment spending at the local level, but on the other it does not want to do so in such a way as to empower its more vocal critics. At the same time, channels for state spending are notoriously porous - especially at the local level - and the mechanisms for effective oversight absent. The government therefore faces the risk that corruption will flourish, and that the political returns on the investment made will do little to restore either the government's standing or, more generally, the poor reputation that the state enjoys among citizens at the local level.

To be successful, decentralisation requires the existence of effective and transparent systems of local government in which there is full public participation and proper oversight over the way in which resources are used. Such conditions do not exist in most regions of Peru today. The paradox is that institutions only come about when they are given a real role to play. Faced with such difficulties, the temptation for the central government will be to maintain a discourse of decentralisation whilst in fact doing nothing to relax centralised control over the flow of resources. But this is bound further to increase regional frustrations.
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