DECENTRALIZATION: MAKING DEMOCRACY WORK IN PERU,

UNCLAS SECTION 01 OF 02 LIMA 004634 SIPDIS E.O. 12958: N/A TAGS: PGOV PINR PREL PE SUBJECT: DECENTRALIZATION: MAKING DEMOCRACY WORK IN PERU, PT 2 REF: A. 03 LIMA 5143 ¶B. 03 LIMA 4668 ¶C. 03 LIMA 0253 ¶1. This is the second in a two-part series on Peruvian decentralization. It focuses on the 10/30 referenda on forming macro-regions, current opinions, and possible outcomes. -------------- SUMMARY -------------- ¶2. SUMMARY. On the eve of the 10/30 referenda on the formation of macro-regions, the GOP finds itself at a critical juncture in its attempt to decentralize and extend democratic institutions to the local and regional levels. Sixteen of 25 departments will vote on whether or not to consolidate and form five macro-regions. Polls indicate a significant number of undecided voters and few instances of a clear majority necessary for consolidation. Seven of the 16 regional presidents have switched from supporting to opposing the referenda. The results of the referenda will determine the future direction of Peru's decentralization reform. Should one or more of the five referenda pass, the reform will gain momentum as the new macro-region(s) will receive increased funding and could become more attractive to investors. If the referenda fail, then the existing decentralization process will require a comprehensive re-think by the GOP and political parties. END SUMMARY. -------------- WHAT'S AT STAKE? -------------- ¶3. A major critique of previous decentralization attempts was that the Central Government formed regions through mandates and not democratic consultation. In response, the current decentralization law mandates that the macro-regions be created through three referenda held in 2005, 2009 and 2013. Macro-region formation requires the individual regional governments to negotiate mergers that respect social and economic development criteria laid down by the GOP. Proposals are then submitted to the National Decentralization Council (CND) for approval before being sent to a referendum. ¶4. Five potential macro-regions have completed the requirements and are part of the 10/30 referenda: 1) the Northern Region (Tumbes, Piura, Lambayaque),2) The Northern Central East Region (Ancash, Huanuco, Lima Provincias, Pasco, and Junin); 3) the Ica-Ayacucho-Huancavelica Region; 4) the Apurimac-Cuzco Region; and 5) the Arequipa-Puno-Tacna Region. The referenda votes will occur in each of the 16 departments considering consolidation. -------------- WHAT ARE THE PROSPECTS? -------------- ¶5. The referenda are plagued by a lack of knowledge by the electorate on the issues and by legal ambiguity on some of the implementing details. CND President Luis Thais publicly acknowledged that the GOP's publicity campaign has been relatively ineffective, estimating the week before the vote that 25 percent of the electorate is unaware of the referenda, much less of the issues at stake. ¶6. In anticipation of the referenda, some critical details remain undecided and Congress, as of 10/27, continues to consider legislation to address these shortfalls. For example, the current legislation requires that a "yes" vote in each department requires a 50 percent-plus-one majority, but is vague as to whether this means of all registered voters or of just those who voted, whether in calculating the vote only "yes" and "no" ballots are counted, or whether blank or null ballots are included in the count. ¶7. It also remains uncertain what the result will be if some, but not all, of the prospective members of a macro-region vote "yes" and one or more vote "no." Will those voting "yes" constitute a macro-region, or is unanimity required? Finally, the locations of the capitals of any new macro-region are not defined, nor does existing legislation address the distribution of seats on any of the new regional councils. Since these are issues that could influence voters' decisions as to how they will cast their ballots, the absence of clear definitions may well prejudice the chances of a "yes" vote in many departments. ¶8. President Toledo has been a strong proponent of a "yes" vote, and opposition party leaders Lourdes Flores (Unidad Nacional alliance) and Valentin Paniagua (Accion Popular) have recently joined the chorus. The opposition APRA party, on the other hand, has long pressed for the referenda to be postponed, arguing that the decentralization process needs to be better planned and implemented before proceeding to the formation of macro-regions. ¶9. APRA leader Alan Garcia has urged all eligible voters to go to the polls. He has also stated that his party is neutral on the referenda as a whole, leaving it up to each of the APRA regional presidents to decide whether a particular referendum stands to benefit his region. Five of the seven APRA regional presidents whose departments will be voting on Sunday have switched from prior support to active opposition to the referenda affecting their regions. (COMMENT: Some critics charge that Garcia's "hands-off" policy is just an attempt to camouflage an APRA decision to de-rail the decentralization process, positing that the party is concerned that it would not/not control the new macro-regions and therefore would enjoy reduced patronage opportunities. END COMMENT.) ¶10. It remains unclear how many of the macro-region referenda will pass. The polls to date indicate that only 7 of 16 departments will vote "yes," and at least one department in all of the proposed macro-regions will vote "no." Political and media observers suggest that the best prospects for new macro-regions are in the north, with Piura and Lambayeque (but probably not Tumbes) forming one macro-region, and in the south, with Arequipa and Puno joining forces. Ica seems to be firmly in the "no" camp, and without its participation (and coastal access),the union of the other two macro-region candidates Ayacucho and Huancavelica, would not make sense. -------------- COMMENT -------------- ¶11. The results of the referenda will determine the future direction of Peru's decentralization reform. Should one or more of the five referenda pass, the new macro-region(s) will become pilot projects, enjoying increased funding, receiving preferential attention from the GOP, and attracting enhanced interest from potential investors, foreign and domestic. If the referenda fail, then the existing process will require a comprehensive re-think by the GOP, Congress and the political parties, with the issue of decentralization's future likely becoming an issue in the upcoming general elections. END COMMENT. STRUBLE