Peru towards sustainable development
17 Sep 2018
The launch of The Report: Peru 2018 was a time to explore opportunities and challenges with top businesspeople regarding the UN’s 2030 Sustainable Development Goals (SDGs).
The main conclusions of the roundtable included an urgent need to improve the way education is managed, ensure greater investment in rural electrification, apply good governance in the productive sectors and implement measures against climate change.
The discussion took place in conjunction with the presentation of OBG’s latest publication on the country, The Report: Peru 2018. At a gathering of 100 CEOs, we discussed barriers and opportunities in working to achieve the SDGs, which Peru has committed to pursuing.
The UK ambassador to Peru, Kate Harrisson, opened the event and highlighted the fundamental role that the UK has played in negotiating these goals. According to Harrisson, "The Peruvian government is committed to fighting corruption and promoting investment in infrastructure, health and education." The ambassador also confirmed the support of her country to Peru. “The departure of the UK from the EU creates an opportunity for the British country and Peru to strengthen their ties,” she added.
It was also opportune to have in attendance the president of the National Centre for Strategic Planning, Javier Abugattás, who explained how the 2030 Agenda is being incorporated into national planning, including pertaining to those objectives on sustainable development. "The process is focused on improving risk management, including the vulnerability of the country to climate change," he said, adding that the creation of a long-term vision for the Forum of the National Agreement is under way.
The panel that I was fortunate to moderate at the event was extremely educational. Panellists spoke with a long-term point of view, which is essential to tackling the SDGs. Eleonora Silva, representative director of the Latin American Development Bank (CAF) in Peru, named communications, health, infrastructure, security and ethics among the country's main challenges. "There are also other key areas in which Peru must work," she stressed, "including confidence in public institutions, greater deregulation and minimisation of red tape, and research and development."
Silva highlighted the role of CAF in supporting Peru's efforts to strengthen productivity and connectivity. While these are crucial elements for success in any country, the need is most visible in Peru’s education system, as it is the foundation for all social and economic development. Jorge Yzusqui, CEO of Innova Schools, considers the need for education reform urgent. The sector has a budget of PEN27bn ($8.1bn), employs 700,000 people and reaches 7m students. Among the priorities of the sector is improved management and execution. "Everything comes down to issues of management and political will," Yzusqui said.
The presence of Rosa María Flores-Araoz, general manager of Kallpa Generación, served to underscore the progress made by Peru in the last 20 years. "PEN18bn ($5.4bn) has been invested in electric infrastructure, and thanks to that we have tripled the production of electric power, in addition to having completely interconnected.” However, Flores-Araoz admitted that there is still progress to be made in rural areas. After listening to her speak, I would say that this infrastructure, unlike that of the educational pillar, is sufficiently addressed.
Manuel Fumagalli, executive director of Barrick Peru, explained the fundamental role of mining to the development of the country and its link to the SDGs. According to Fumagalli, "Mining operations have the potential to contribute to several different objectives." In a country where mining still encounters a number of hurdles – excessive bureaucracy, informality, and pushback from a social and environmental standpoint – it is fundamental to improve the perception of the mining sector, and Fumagalli agrees. "We must improve effective communication among the population, the government and companies," he said.
Meanwhile, the president of the National Fisheries Society, Elena Conterno, praised the individual fishing quotas. While it seems a sensible statement, my perception is that quotas risk misalignment with reality unless they are considered ad-hoc and case-by-case, as imbalances (overexploitation or underexploitation) can emerge. Still, as Conterno said, "If there had not been individual fishing quotas with the sharp drop in landings, today’s biomass would not be of 11m tons, 35% higher than the average of the last 25 years."
I particularly enjoyed listening to the director of investor services of ProInversión, César Peñaranda, who closed the roundtable by sharing the internally imposed demands on the organisation. He pledged to promote private investment and work towards strengthening the institutional structure. Peñaranda stated his support for a National Infrastructure Plan to simplify the regulatory framework and clean up the administration – priorities of considerable size.
The priorities and hurdles discussed at the launch of The Report: Peru 2018 are many, and it is far from easy to order them in terms of urgency. Still, an adequate structuring of the education sector seems a fundamental base on which other priorities can be built in an organic way. At the institutional level, interest from the private sector should directly correlate to the degree of business transparency. As Peru begins down the path to achieving the SDGs, I invite you to read The Report: Peru 2018 and draw your own conclusions regarding the country’s strengths and weaknesses.