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Peru president seeks business sector support for anti-corruption drive

Bnamericas Published: Monday, December 03, 2018

President Martín Vizcarra, who is waging a battle against entrenched corruption in Peru's political, judicial and business sectors, made a last-ditch plea to the country's businessmen to back his government's efforts to spur economic growth and competitiveness.

Industrial groups such as Confiep, SNMPE and AFIN have warned that private investment is slowing due to a perceived lack of due process in Peru's judicial proceedings that have swept up ex-presidents, cabinet ministers, judges and business magnates alike.

The judiciary in recent weeks has detained opposition leader Keiko Fujimori and annulled a pardon for her father, ex-president Alberto Fujimori. Former presidents Pedro Pablo Kuczynski, Ollanta Humala, Alan García and Alejandro Toledo are also under investigation for alleged ties to disgraced Brazilian construction firm Odebrecht.

Vizcarra refuted accusations of political persecution in his government, while admitting Peru's "imperfect" judicial system needs to be overhauled.

"We're coming to the end of a highly complicated year in which we're undergoing a major political and institutional crisis. Once again the disappointment and frustration of the citizens," Vizcarra said at the CADE annual business conference in the beach town of Paracas. "As we're all part of the problem, we must also be part of the solution."

Economy

The Peruvian economy, which has been weakened by two years of judicial investigations, detentions and highly-publicized scandals, is expected to grow 4% this year, while the fiscal deficit has been trimmed to 2.2% of GDP from 3% in March and tax collection rose to 14.3% of GDP from 13% last year, said Vizcarra.

While public spending rose 36.7% in October, Peru has also lined up mining, oil and port investments this year, in addition to the expansion of Lima's Jorge Chávez Airport, he said.

The government is working on a nine-point competitiveness plan which includes installing infrastructure; seeking international financing; training workers; promoting a competitive labor system; facilitating foreign trade in goods and services; and promoting environmental sustainability in Peru's productive apparatus, according to Vizcarra.

The government plans to complete by mid-2019 a national infrastructure plan that seeks to coordinate actions between central, regional and local governments, he said.

Work will also be completed on 15,000km of paved roads by 2021, while work will get underway this month on the Chinchero airport project and the government is promoting private investment in the region al airports of Ilo, Jaén, Jauja, Chimbote, Yurimaguas, Rioja and Tingo María, said Vizcarra.

The government will also press ahead with 13 irrigation projects including Majes II and Chavimochic III and 1,250 reservoirs to store water in 14 highland regions; in addition to US$200mn in school and university infrastructure upgrades; and 4.820bn soles (US$1.5bn) in hospital infrastructure next year, he said.

The state, which has slashed 384 administrative procedures and simplified 491, will also eliminate over 3,000 bureaucratic barriers - and a new customs law will be fully regulated by 2021, Vizcarra added.

"We have a vision of what we want for the country and how to achieve it. We're integrating Peru, guaranteeing education and health and fighting against corruption," Vizcarra said. "This will only be possible if we are committed and work together."

Odebrecht

At the same time, the president of the judiciary Victor Prado vowed to continue to fight organized crime by training legal operators to halt the movement abroad of illicit funds and other assets.

Vizcarra, who has made the fight against corruption one of the pillars of his government since taking office in March, has called a referendum for December 9 aimed at pushing through political and judicial reforms in the wake of the Odebrecht scandal.

Odebrecht, which in December 2016 admitted to paying hundreds of millions of dollars in bribes to secure contracts across Latin America, operated dozens of infrastructure concessions in Peru awarded by governments including those of Toledo (2001-2006), García (2006-2011) and Humala (2011-2016).

Meanwhile, Vizcarra's culture minister Patricia Balbuena resigned to avoid being ousted by congress over a controversial 350,000-sol contract in state promotion agency Promperú that was awarded to a company linked to her deputy minister. Balbuena was the fifth minister in Vizcarra's cabinet to be ousted since March.

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