Appointment of reconstruction 'czar' raises concerns

13 May 2017

The appointment on 5 May of Pablo de la Flor as executive-director of the authority in charge of reconstruction has met with a mixed response. It has been widely welcomed by the business community and Peru’s right-of-centre political parties, but is seen as a source of concern in the NGO and pro-environment communities.

Like so many other senior figures in the Kuczynski administration, de la Flor is one of those who rotate in the ‘revolving door’ between business and politics with consummate ease. It is worth considering his CV for a moment. See El Comercio 

He undertook doctoral studies in the United States, at the University of Chicago, the intellectual home of neo-liberalism. Between 1994 and 1996, he was a vice-minister in the Fujimori government with responsibility for international trade relations. Subsequently, he returned to the political front-line under Alejandro Toledo in 2003 as vice-minister of foreign trade. As such, he headed up the team that began negotiations with the United States for a free trade agreement. He also was involved in trade liberalisation talks with Mexico, Chile and Thailand.

Thereafter, de la Flor returned to the private sector as vice-president of Antamina, the giant mining operation in Ancash. He has also worked for the First National Bank of Chicago. From 2012 onwards, he held a high-ranking position in the Banco de Crédito with responsibility for corporate relations.

His appointment was welcomed effusively by key figures in the pro-Fujimori opposition party, as well as by leaders of APRA like Javier Velásquez Quesquén. For his part, Kuczynski praised his “proven probity” which would act as a guarantee that the funds allotted to reconstruction would be well spent.

Others are not so sure. For its part, Cooperacción, the NGO which has been involved in several conflicts surrounding mining investment, raises questions about the suitability of a businessman with no experience in the sort of reconstruction work that is required. It expresses concerns that the pro-private sector bias of such an appointment will do nothing for the sort of rational re-ordering of land use (reordenamiento territorial) that is so urgently needed. It maintains that this should be part and parcel of a reconstruction project based squarely on sustainable development principles that benefit the worst-off in Peruvian society. 

It sees the primacy of private sector involvement working to the further undermine the role that should be played by the state. This is already weakened by schemes such as Private-Public Partnerships (now much in vogue in Peru) and Obras por Impuestos, the scheme by which private companies substitute for the state in providing social and physical infrastructure in return for tax breaks.

What is clear is that the appointment reveals the blinding faith in technocracy and the private sector in resolving social problems. As Santiago Mariani argued in a blog this week, this is reminiscent of the Fujimori era, when technocrats replaced elected representatives in decision-taking and political parties were shunted to the margins. Although there may be good reason to suspect the honesty of many elected politicians, this tendency has the longer-term effect of further weakening representative democracy and concentrating more power in the hands of large private companies.

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