An agenda to combat inequality

15 February 2016

Oxfam Peru this week published a challenging paper asking all candidates in the election, and all in charge of public policy, to consider how to tackle inequality. Faced with the prospect of slow growth, the poor will be extremely vulnerable, since the period of strong growth now ending has left important structural problems unresolved.

To close the gap, the report highlights five themes, and supports its case with illustrative facts, carefully sourced.

  • Fiscal justice. The economic stimulus packages of the last two years are estimated to have cost an annual 5 billion new soles in income foregone, four times the annual budget of Juntos, a key anti-poverty programme. And tax evasion is estimated at 30% of income tax due. Reducing evasion, it is claimed, could generate a figure equivalent to 4% of GDP.

  • More investment in people, above all in health and education. Health expenditure as a share of GDP is 2.1% in Peru, compared with 5.4% in Argentina and 4.5% in Uruguay. In 2002, the Acuerdo Nacional (an institution representing the main political parties and civil society) set a goal of 6% of GDP for educational spending; today the figure is only just over 4%.

  • The quality of employment. The minimum wage in the formal sector is today scarcely a third of what it was 40 years ago. A significant proportion of young people, above all young women, neither study nor work.

  • Rural development and especially family agriculture. The latter employs over 3 million people, plays a vital role in food security, and has been tragically neglected in favour of export agriculture. Scarcely one in ten agricultural producers has access to credit or technical assistance.

  • Reducing the negative impact of the extractive sector on social relations and the environment. Recent measures have weakened controls and monitoring capacity; this must be reversed. Prior consultation must be fully implemented.

The analysis over the 16 pages is sharp, to the point and well sourced. The data are not new, but the use of them to present a strong challenge is well done and timely. The double emphasis on social policy and measures to change the productive structure is of great importance. This is a document that the electorate, policy-makers and the candidates all need to take seriously.

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    The Peru Support Group exists to promote social inclusion, sustainable development and the observance of human rights in Peru. To that end the PSG highlights shortcomings in observance of established norms, whether international or local in nature, in its research, advocacy and publications. In so doing, it underscores the relationships that exist within the political system, how institutions work, and the effectiveness of policies that aim to reduce poverty and inequality within the context of sustainable development.

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