Peru Domestic Politics
Peru History & State
Independence Day: July 28, 1821
Head of state: Francisco Sagasti Hochhausler (from November 17, 2020)
Head of government: Violeta Bermúdez Valdivia (since November 18, 2020)
Political system: Multi-party system
Democracy Status Index (BTI): Rank 29 (out of 129) 2018
Corruption Index (CPI): Rank 105 (of 180) (2018)
The Peruvian elite, made up of the large landowners in the highlands and the coast, ruled the country as an oligarchy for centuries, and it was not until the agrarian reform of 1969 that their source of power was removed. In the years that followed, new power groups were added that concentrated on industrial and financial activities, were largely of European descent and lived on the protectionism of the state. Fujimori’s entry into politics and the consistent implementation of a neoliberal economic policy on South American soil led to a restructuring of the power bloc. The outstanding positive development of mining has resulted in the formation of:
– purely foreign economic groups such as Southern Copper Corporation SCC (Mexico), Doe Run (USA), Teck Cominco (USA), BHP Billiton (Australia) and Glencore (Switzerland)
– mixed groups, with Peruvian participation such as Minera Yanacocha (Newmont Mining Corporation 51.35 % USA, Cía. De Minas Buenaventura 43.65% Peru and International Finance Corporation IFC 5%), Cerro Verde (FCX 53.56%, SMM Cerro Verde Netherlands BV 21%, Buenaventura Group 19.58% Peru), Primax (Romero Group)
– pure Peruvian groups, like Volcan, Minsur (part of the Breca group, Brescia family), Buenaventura, El Brocal and Milpo (owner of Atococha and part of the Brazilian company Votoramtin SA since 2010).
Concentration processes can be observed in export-oriented agriculture, but these are by no means as significant and influential as those groups oriented towards mining. These few economic groups exert a strong influence on the economy and politics.
The last four presidents of Peru and the Odebrecht affair
According to ehealthfacts, corruption in Peru begins with the conquest of the Inca Empire by Spain in the 16th century, continues with the consolidation of Spanish rule in the viceroyalty and continues with the emergence of the republic to this day. State employees and politicians in particular are prone to corruption. Especially since the country’s redemocratization – towards the end of the 1970’s – high-ranking politicians have come under suspicion or have been accused of corruption.
In recent history, the exposure of the corruption scandal of the Brazilian construction company empire Odebrecht, to announce the involvement of politicians from various South American countries in corruption scandals – known as Lava Jato – led, including ex-presidents of Peru. Ollanta Humala is in prison, Alejandro Toledo is being prosecuted by the judiciary and the ex-mayor of Limas Susana Villarán and the leader of the strong opposition party People’s Force and presidential candidate Keiko Fujimori are under investigation. For example, it became known that for the Odebrecht company it was a common practice to fund election campaigns for politicians who had a good chance of success. This is what the former CEO of the Brazilian group Marcelo Odebrecht testified when he was recently interrogated by Peruvian investigators in the prison in Curitiba (Brazil).
Spectacular are two events in December 2017: the one who arranged Judge Richard Concepcion Carhuancho preventive detention of the tips of five Peruvian Baunternehmern, which have worked with the construction company Odebrecht and became the other trespassing committed by public prosecutors and police against two bars of the opposition party People’s Force. The latter was justified by the fact that Volks-Kraft had made false statements about the financing of its election campaigns. Two different accounts would have been kept and therefore important pieces of evidence should have been saved. These measures represent an extraordinary approach by the Peruvian judiciary. Overall, the corruption scandal involves major projects such as the inter-oceanic road (from the Pacific to the Atlantic), the Lima subway and natural gas production.
On 27./28. February 2018, the former representative of Odebrecht in Peru and key witness (“colaborador eficaz”) Jorge Barata, testified before Peruvian investigators. Among other things, he confirmed that all parties (including the PPK party) and the CONFIEP business association had received election funding from Obebrecht’s black box office.
On March 23, two searches of the residence of ex-President Perus Kuczynski were carried out by the public prosecutor’s office to uncover evidence. Furthermore, an 18-month travel ban is required against Kuczynski as a precautionary measure.
A bomb burst on Saturday, July 7th. The investigative group of IDL reporters released audio recordings of testimony from senior officials in the judiciary about influencing judge appointments and dealing with penalties. The audios that sparked the judicial crisis were recorded by the police with the approval of a judge as part of a fiscal organized crime investigation launched in the country’s largest port, Callao, in December, and then leaked to IDL reporters.