State Capture or the 'Reprivada'

28 September 2014

With municipal and regional elections imminent, Peruvian voters may be forgiven for wondering about the value of democratic institutions in their country. What you vote for is far from being any guarantee of what you get.

In 2011, the majority of Peruvians – albeit a slender majority – opted for Ollanta Humala and an agenda of change. Although it was a watered-down version of the platform on which he had stood previously for the presidency in 2006, Humala’s programme for the ‘great transformation’ was a stringent critique of the policies followed by the preceding administration of Alan García (2006-11), not least with respect to his carte blanche policy towards extractive industries.

No sooner inaugurated as president, Humala announced his own ‘great transformation’: to exactly the same set of economic policies that had characterised the García government, the Toledo one before that (2001-06), and the Fujimori government before that (1990-2000). As if to underline the point, Humala appointed as his minister for economy and finance none other than Luis Miguel Castilla, the very man who had held this post under Garcia. The ‘great transformation’ was, at a stroke, transformed into the ‘great and seamless continuity’.

That the verdict of the voters was so swiftly ignored was hardly surprising. Since the 1990s, and largely as a consequence of the Fujimori government’s privatisation strategy, private sector interests have become enormously powerful in Peru, capable of making and breaking elected governments. The confederation of private sector businesses, Confiep, has huge influence over the appointments to and decisions of government. By contrast, once powerful union organisations like the General Confederation of Peruvian Labour (CGTP) are but a shadow of their former selves.

Nowhere is this imbalance of power clearer than in the extractive industries, like mining. Private sector lobby organisations like the Sociedad Nacional de Minería, Petróleo y Energía (SNMPE) have direct access, whenever they want, to the country’s leading politicians, and in particular to the president. They can effectively bypass elected members of Congress, or they use them like pawns on the political chessboard. Peru has become a classic example of state capture: the government makes policy at the behest of a small group of corporate interests, arguing that such policies are – in the long run at least – identical with the interests of the nation as a whole.

Quite how such political influence is exerted on a day-by-day basis tends to be a well-guarded secret. However, hints emerge occasionally, sometimes the result of efforts by an inquisitive press, sometimes because of mistakes made by those most involved, and sometimes a bit of both. A number of vignettes have emerged recently: a scandal over the close rapport between the ministry of energy and mines (and indeed the minister) and private companies angling for contracts; a news story about the political influence exerted by the company that markets Coca Cola on a government legislative proposals (now known the Ley Coca Cola); and revelations about the influence of private sector lobbyists on a former minister of agriculture who now occupies the housing ministry.

Of course Peru is not alone in this respect, but these sorts of scandals – as much a characteristic of the García government as the present Humala administration – are hugely corrosive of people’s faith in democratic governance. Why vote for someone when the people who are elected act as ciphers for business interests whose sole motivation is, at the end of the day, to make as much money as possible in the shortest possible time? The effect becomes even more toxic when, as has also become plain in recent months, elected officials act as the agents for illegal business interests, such as those of drug trafficking mafias.

The balance between lo público and lo privado has tilted so far in the direction of the latter in recent years that it perhaps no longer appropriate to talk about ‘republican’ values. Instead of the ‘república’, it might perhaps be more appropriate to talk of the ‘reprivada’.

All articles

  • PSG Aims

    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.

  • Historical Overview

    Over the past century Peru has suffered a series of autocratic governments and a civil war in which nearly 70,000 people died. Many of the country's ongoing political and social problems are a legacy of its somewhat turbulent past. 

  • Human Rights

    Human rights violations were widespread during the twenty years after the initiation of armed conflict in 1980. Efforts to convict perpetrators since the war's end have made only limited progress. Today, concerns remain over the treatment of those engaged in social protest, particularly against strategically important investment projects.

  • Why join the PSG?

    • Keep up to date with latest news and developments in Peru
    • Learn about key issues of poverty, development and human rights in Peru
    • Support the work of the Peru Support Group

    Become a member