CONTRACTS, NATURAL RESOURCES AND DEVELOPMENT
One issue that has entered strongly in the electoral debate is the change of operating conditions under which large companies, mainly foreign, to exploit natural resources like gold, copper, oil and gas.
Such a discussion is actually part of a larger discussion: how to develop a country rich in natural resources. One of the characteristics of Peru is just an abundance of these resources. But as our history shows, have many natural resources is no guarantee of development. Moreover, international comparative studies suggest that countries with many natural resources, especially minerals, tend to grow less and no more than those who do not have those resources.
For economists, this is certainly a paradox: how is it possible that those who have more wealth - natural here - not doing better economically? The explanations suggested by those who have studied the issue are that there is private ownership of these resources due to corrupt governments that do not favor the public interest that the efforts of private firms are more oriented to capture the rents that provide these resources to search competitiveness based on technological progress, and that these resources are and prices and unstable market conditions which are then transmitted in severe economic crises in countries.
The recent history of exploitation natural resources in Peru seems to support the first explanation suggested above: the benefits of the exploitation of natural resources are concentrated in very few hands, although it is wealth that belongs to all Peruvians.
In this election campaign have proposed two ways to the changing conditions: the first is to establish new tax rules, such as mining royalties and windfall tax for the current high international prices, the second is renegotiate contracts. Both forms are linked, as the tax stability contracts or legal signed some companies establish limitations on the collection of new taxes. However, This limitation does not extend to all companies, and payment of royalties - as the Constitutional Court has failed - can not be exempted under cover stability contracts (which despite this administration wants to charge them). Advocates
the status quo and want things to remain as they are, they often use the argument that change the situation bother to capitalists and business owners would drive away investment. Indeed, any change is somewhat expensive, and investors like low taxes being charged and get the highest possible profit. The point is that the country is more costly to stay stuck forever in the current situation, allowing our natural resources go or anything to contribute significantly to national development.
On the other hand, the argument that you can not ask for a renegotiation of the contracts because we lose credibility, it is totally hypocritical, since large companies have to raise tens of amendments to contracts and laws in their favor, including some with " name "as the Supreme Decree that has been to favor and allow Doe Run to continue polluting the air and poisoning the children in La Oroya.
Our country needs a better distribution of income, particularly those from natural resources. The state must play a key role in this regard, capturing those resources and allocating them efficiently to improve education, health and social protection and the fight against poverty and the development of the country's poorest areas. As all the candidates say it's time for change, but without this fundamental change, the changes promise to be epidermal.
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