A bad week for PPK

28 May 2017

It has not been a good week for the Kuczynski administration. Faced with the possibility of being censured in Congress, Transport and Communications Minister Martín Vizcarra tendered his resignation on 22 May. This followed the publication of a highly critical report by the Comptroller-General’s office on the addendum to the Chinchero airport contract.

Vizcarra’s resignation was almost immediately followed up by demands from influential members of Congress (at least from the Fujimorista majority) that he should also resign his other post as first vice-president of the Republic.

This once again shows the Fujimoristas embarked on a political strategy to harass and debilitate the government through use of its power to censure ministers. In January, under similar pressure, President Pedro Pablo Kuczynski was obliged to accept the resignation of his former education minister, Jaime Saavedra. On that occasion, he opted for appeasement rather than confrontation with Fuerza Popular (FP), the Fujimorista party.

To paraphrase Oscar Wilde, to lose one minister was unfortunate, but to lose two might be construed as careless.

Next in the firing line come Interior Minister Carlos Basombrio and Health Minister Patricia García. If they are forced to go, it will provide further evidence of Kuczynski’s political weakness in standing up to foes who never really came to terms with the current president’s narrow electoral victory eleven months ago.

Vizcarra’s departure also coincides with the government’s political retreat on the contract with Kuntur Wasi to build the new airport in Cuzco. The government has promised that the project will go ahead not as a private-public partnership (PPP) but on the basis of a wholly public-sector venture. At the very least, this is set to delay construction, perhaps for years. This can only serve to anger public opinion in Cuzco and poison relations between the regional and central governments.

Finally, Vizcarra’s departure will do nothing to restore public faith in PPPs as a method of funding and administering development projects, particularly in infrastructure. This has been torpedoed by the revelations from the Lava Jato scandals in Brazil, which revealed the methods used by construction companies to secure public sector projects in Peru in ways that benefitted private companies at the expense of the state. On many occasions, the Kuczynski government has pledged its faith in PPPs and Obras por Impuestos (Public Works for Taxes) as ways of involving private business more fully in funding public projects.

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