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Peru’s decentralization stalled by protests and distrust

JUNE | JULY 2008 Federations
By Mart ín Tana ka and Sofía Vera
an y Peru vians want decentralization for one
reason: to counterbalance the overwhelming
influence of Lima, the country’s capital.
But the path to decentralization is a rocky
one, and the end is nowhere in sight.
Lima’s 8.5 million inhabitants make up 26
per cent of the country’s total population. The city produces 46
per cent of the country’s goods and services. People outside the
capital want more power to be devolved to its 25 regions – and
want some of the public and private investment that now is
going to Lima.
The 28-year decentralization movement has advanced in fits
and starts. The movement began when the right to hold local
elections was restored in 1980.
Then in 1988 the creation of regions began with the election
of regional authorities that were meant to replace the 24 administrative
units called departments. The regional governments
Peru’s decentralization stalled
by protests and distrust
Voters support devolution but not amalgamation
Martin Tanaka has a PhD in Political Science (FLACSO Mexico), and is
a senior researcher at the Institute of Peruvian Studies.
Sofía Vera is a sociologist and research assistant at the Institute of
Peruvian Studies.
Food kitchen volunteers from an outlying province demonstrate in Lima for more funding, in April 2008. Regions outside Lima have been
campaigning for more powers and public finances.
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REUTERS/Reuters Photographer
JUNE | JULY 2008 Federations
were then dissolved but were brought
back in 2002, when Peru was divided into
2 5 “ re gions”, replac ing the ol d
A constitutional reform allowed for
regional elections in 2002. But the goal of
merging the 25 regions into fewer, larger
regions has not yet succeeded.
One of the regions leading the push for
decentralization today is Lambayeque,
where Yehude Simon was re-elected governor
in 2006.
Simon is one of the successful leaders
of the decentralization movement in
Peru. One of the main projects of his government
is completing the final phases of
the Proyecto Olmos reservoir for farmers,
which stores and distributes 2,050 million
cubic meters of water each year.
In April, after a meeting with 23
regional governors and Peruvian
President Alan Garcia, Simon said that
the decentralization of Peru was proceeding
satisfactorily, despite its many
“The state has acknowledged that
some things aren’t working … this
encounter should put an end to the criticism
from those who wish the failure of
Movement is fragmented
The decentralization process is a reflection
of Peru’s political fragmentation.
When new regional and local elections
were held in November 2006, 18 of the
country’s 25 regions elected governments from regional political
parties. In only seven of the regions did candidates affiliated
with national political parties form governments.
An important setback for decentralization occurred in
October 2005, when Peruvians voted in a referendum to turn
down the amalgamation of many smaller regions into a few
larger ones. This step was seen as necessary in order to give
more power to the regions. However, people in the regions
feared that amalgamation would mean a weakening of their
autonomy and lead to consolidation of the power of the bigger
The process of decentralization has nearly a 30-year history
in Peru. It started just after the 1979 Constitution was adopted.
The ’79 Constitution, adopted by a popularly elected assembly,
stated that the country should establish regions with elected
authorities. In the Constitution, the regions and local municipalities
were described as governments with administrative
and economic autonomy from the central government.
Mayors elected
When the military government finally ended in 1980, the mayors
for all local assemblies in the country’s provinces and
districts were directly elected by popular ballot.
That same year, 1980, a terrorist group called “Shining Path,”
started a campaign of attacks which they called “revolutionary
war.” Their incursions inflicted severe harm to the decentralization
process by striking at the roots of the Peruvian government
and assassinating mayors in several rural districts. Shining Path
started its activities in one of the poorest regions in Peru,
Ayacucho, and spread over almost the entire country.
The destabilization caused by the Shining Path helped stall
the decentralization process until 1988, when a number of
regions were formed and governors elected.
But devolution ground to a halt under President Alberto
Fujimori, who became president in 1990. In 1992 he led a coup
d’état, shutting down the national Congress and putting an end
to regional governments.
Fujimori maintained a strongly centralist outlook in the relationship
between the central government and the regions. Use
of government resources, meanwhile, was concentrated in the
hands of the President and his staff.
Meanwhile, in the countryside, the Shining Path began losing
the support of the peasants, leading to the capture in 1992 of
its leader and the collapse of the uprising.
The once-popular Fujimori became embroiled in a
corruption scandal, and he fled the country in 2000. His departure
laid the groundwork for a revival of democratic principles
Peru’s former president Alberto Fujimori testifies during his trial in Lima on Feb. 20, 2008.
Fujimori shut down regional governments while in power.
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JUNE | JULY 2008 Federations
in general, as well as a rebirth of the decentralization initiatives.
A new common cause took shape, which considered decentralization
not only good for achieving balanced development, but
also a potential bulwark against arbitrary and abusive
centralization of power.
With the election of Alejandro Toledo as president in 2001,
decentralization was taken up once again. One of the new government’s
first measures was to call elections to constitute
regional governments.
As there were no territorial boundaries for the regions, temporary
borders were drawn up, based on the 25 existing units.
The results of the 2002 regional elections favoured the principal
opposition party, the populist APRA party, which won a
plurality of the vote in 12 regional assemblies – nearly half of the
Initiative failed
In addition to needing a better definition of their tasks and
responsibilities, the new assemblies also needed a roadmap for
merging into larger regions.
The creation of a smaller number of larger regions out of the
25 existing ones would have meant more funds and staff in the
respective regions and a greater potential for economic development.
Another gain would have been the potential for the
building of a stronger regional identity in fewer regions.
However, the initiative failed as it ran into a brick wall of resistance
from the central government.
The merger proposals were voted upon in popular referendums
in 16 regions. The regions and provinces feared being
gobbled up into the larger regions. The result was that every referendum
to create five new larger regions from the 16 smaller
ones was defeated in October 2005.
Decentralization in today’s Peru, which began with a chaotic
regionalization process, has thus far failed to establish a coherent
and orderly institutional framework for delivery of
government services to its citizens. Many of the regional movements
are not well rooted. Some also suffer from poor
management. Nevertheless, some regional movements do
show potential and their efforts could lead to success.
Some regions believe that gaining the power to collect their
own taxes is the next logical step on the road to greater
Governor Yehude Simon of Lambayeque is of that view: “The
transfer to the regions of functions along with funds is indispensable
for moving ahead with the decentralization process,
and what would be a better way to achieve that than by allowing
the regions to directly collect taxes themselves?”
But to truly succeed, the elected officials and the civil servants
in these regions need to acquire the ability to promote and
sell development programs that will create jobs and sustainable
development. The regions and the national government also
need to restart the regional merger process and embark on
reforms for enhanced intergovernmental relations among
national, regional and municipal orders of government. Peru
must address these challenges or face more conflict and social
protest, both of which it has suffered enough from in recent
Japan [From pa ge 14]
them produced de facto decentralization and a vibrant democracy
at grassroots level.
Here at last was a counterbalance to the national government.
Yet no constitutional or major legal changes were
introduced to promote decentralization. In essence, new policies
were adopted within the highly centralized structure.
Soon the local activism lost the wind from its sails. The
national economic boom and resulting widespread prosperity
from the late 1970s enabled the central government to rein in
the pressure for reform and, importantly, to retain its tight fist
on local administrations.
Economy stagnates
Then came the 1990s when Japan’s economy began to stagnate,
an era that injected a fresh enthusiasm for reviving decentralization.
And, while some advances were made in the 1990s,
many tasks remained.
This issue became part of Prime Minister Junichiro Koizumi’s
(2001-2006) broader agenda of reform and restructuring and
continued under the Shinzo Abe administration (2006-2007).
Prime Minister Yasuo Fukuda, who came into power in 2007,
has endorsed his predecessors’ initiatives.
Consequently, a new Decentralization Reform Promotion
Act was legislated in 2006 and the government set up a
Decentralization Reform Promotion Committee in April 2007 to
consider issues related to further devolution of power and
Rethinking Japan
As part of the devolution process, the ruling LDP, especially
since the Koizumi administration, has promoted the doshusei
idea. The opposition political party and its leader Ichiro Ozawa
also lent support. Although he advocated a somewhat different
structure in his renowned 1994 book Blueprint for a New Japan:
The Rethinking of a Nation, Ozawa then considered decentralization
a core issue and recommended ‘transfer of substantial
national authority and finances to local governments’.
In a 2007 survey conducted by Japan’s leading economics
daily, the Nihon Keizai Shinbun on the desirability of a “state
system”, 23 of 47 governors strongly supported the idea. Only
four opposed it.
The main opposition comes from the central bureaucracy
that sees its power eroded significantly. The new structure will
provide few opportunities for central bureaucrats to control
localities through their field offices or to transfer central personnel
to key local administrative positions.
Nonetheless, the current situation of “30 percent autonomy,”
where local governments raise roughly thirty percent of their
financial needs through local taxes, while depending for the rest
on the centre, is going to change. Already the central government
has agreed to transfer a greater proportion of income tax
to localities. Maintaining a sound balance of power between
national and regional interests will be critical. But how this balance
will be achieved remains unclear.
Moves toward decentralization now have a new momentum.
Still, it is unlikely that profound reform will be introduced anytime
soon. Japan’s road to decentralisation still has many
winding turns, but these days many more travellers too.
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