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Proceedings Presentation
of Country Reports Country: Peru Increasing
Government /Public Sector Efficiency Through Private-Public
Partnership by
Ms
Silvia Lilian Seperack Gamboa Index
1.
Role and operation of the public sector in Peru 2.
Role of the private sector in Peru 3.
Private-public partnership in Peru until 2001 4.
Up-dating the public sector to improve its efficiency 5.
Conclusions Preface
Today
there is an opportunity in Peru to look into the future and elaborate an
action plan to address and fight the primary obstacles impeding development
such as: poverty, dysfunctional government and lack of investment. However,
a vision is not enough; there must be a commitment to introduce, on a
national level, an understanding of how an efficient government should act
to promote development and environmental improvement in the domestic economy
through the development of the private sector. What
must be done? We should focus on results, pin-pointing priorities and
ensuring that the fundamentals for implementing the necessary measures are
in place. We must enlist and deploy in order to be able to solve problems
jointly through the effort of government and all sectors of society.
In this context, the Peruvian government has launched an economic,
political and social project, with the aim of modernizing the state in the
foreseeable future.
Peru
has undergone many changes in its political structure in the past 40 years,
practically once every five years. As a result, while Chile, Mexico and
Colombia have increased their per capita incomes by an average of five
times, we have only increased ours by only 10%.
As well, we distanced ourselves from the rest of the world and
reduced our foreign trade at a time when in the rest of the world foreign
trade was increasing. It is in this context that Peru now promotes a state
policy that will be in held in force for the next 20 years, through a
national agreement signed by all political parties and members of civil
society. Valid
up to 2021, the policy covers fundamentals such as economic, social and
institutional matters. The
economic policy seeks to improve the lack of competitiveness that plagues
Peruvians. A concerted effort is underway to create a competitive national
plan by which every semester the private sector and public sector will
evaluate the progress achieved in each indicator of competitiveness. Peru is
ranked 57th in terms of competitiveness, compared to Costa Rica
in 27th and Chile in 25 th. Reform
of the State is a major concern of citizens and political leaders in
developing countries such as ours; countries in which democracy is
constantly threatened by endemic evils such as poverty, corruption,
violence, rupture of the democratic order and lack of solidarity.
A main preoccupation is how to use the State’s limited resources to
guarantee the bill of rights, protect human integrity, protect citizens from
injustice, provide incentives to produce in a competitive manner, establish
fair rules according to the will of the people. The goal is to have a modern
state, one that is efficient, effective and supported by the citizens, one
that allows equal opportunities for all, one that respects and induces
others to respect the law.
Above all, the goal is to have a state that it is at the service of
the people. 1.
Role and operation of the public sector in Peru Public
administration in Peru consists of 16 ministries, 63 decentralized public
institutions (Investment Promotion Commission PROINVERSION, National
Consumer Defense Institute INDECOPI, Export Promotion Commission PROMPEX,
etc), 25 regional management entities with jurisdiction over the country’s
departments, 11 regulating institutions (for telecommunications, energy,
transport, etc.), 120 public institutions and a series of special programs. The
State has low a level of account rendering, a situation aggravated due to an
evident lack of democratic foundation. This is apparent in the poorly run
fiscal mechanism operating between the different state institutions, the
inability to promote equal opportunity among Peruvians, and the inability to
guarantee access to government services. Public
administration suffered a declined in its institutional capacity due to a
discontinuation of a reform process that had been started last decade, and a
lack of political will of the acting government at that time to develop a
modern, decentralized process. The
breakdown of the state institutional device, in which there are several
regimes of organization and operation, created serious coordination
obstacles. A problem related to this is the overlapping of functions. For
example, at least four different national institutions have housing programs
and establish policies in that sector. This situation is further complicated
due to the plurality of regimes, personnel and the lack of horizontal
information systems and control mechanisms. The
public central administration has an estimated 700,000 employees.
Currently, it is not possible to determine their exact number, their
distribution nor their salaries, due to the lack of a system or institution
in place to compile this information. Public
employees work under three different contract regimes, which have absolutely
no relation to their function.
This naturally poses serious problems for human resources. There are
also indications of salary discrimination between men and women. Furthermore,
there is evidence of a lack of transparency and slowness of the State to
attend to its citizens and facilitate the internal communication of the
national administration. Introducing communication and information
technology could reduce the handling costs incurred by the government, and
at the same time increase State transparency. Summarizing,
a series of deficiencies have been detected, such as:
As for the central government’s acquisition and purchasing system,
there are transparency problems in the allocation of contracts, and the
decision-making process is slow. The procedure and handling is done entirely
on paper by each public institution on their own, without a centralized
evaluation process. 2. Role of the private sector in
Peru Two administrative organization models exist in Peru; the bureaucratic
and the entrepreneurial. According
to the law, the bureaucratic model is used to manage state institutions,
government entities and the public sector, while the entrepreneurial model
refers to the administration of private enterprises. The fundamental
difference between these two models lies in their objectives. The bureaucratic model applies to enterprises that do not generate
profits, and provide services to citizens based on a precise regulation
framework according to a defined budget. Results are not measured in terms
of profits, as the income generated is generally marginal. For example, the
income generated by taxes and tariffs is not “produced” by the
administrative device. In the case of the entrepreneurial model, the end-goal is to generate
earnings, while aiming to give customers optimal service. The operation is
subject to market law, and the customer is king. He chooses which goods or
services he will purchase, and decides the price he is willing to pay.
Consumers’ attitudes determine whether a business will be profitable or
not. Each model has distinct fundamental characteristics.
The bureaucratic model system is quite rigid, and certain
organizations require this type of administration, including the ministries,
the police, and regional and local governments, among others.
In Peru priority has been given to the entrepreneurial model.
Out of 650 state institutions that existed in 1990, there are now
only 120 public enterprises left, a consequence of an increase in
privatization and concessions. Private enterprise is one of the most important agents of development
and change. Business people take pride in what they do – meeting the needs
of customers in terms of goods and services, providing employment and
training, developing new technologies and so on. Peru’s formal entrepreneurs in industries and services are associated
with different trade unions. The
most important are: the National Confederation of Private Enterprises (CONFIEP),
the National Society of Industry (SIN), the National Exporters Association (ADEX),
the Foreign Trade Society (COMEX), the National Chamber of Commerce of Lima
(CCL), the Mining and Petroleum Society, among others.
Additionally there exists an entrepreneurial movement to act in
defense of its associates and their economic activity. Formal workers are also associated with and represented by several
institutions. Starting this
decade they play a more active role within the power structure of society.
Nevertheless, the amount of informal work is considerable and accounts for
60% of all workers. 3. Private-Public partnership in
Peru until 2001 In an increasingly global and integrated society, stakeholders have new
roles and responsibilities. In
particular, the business community plays a crucial and evolving role in
terms of introducing new technologies and aiding economic development.
They also mold community and societal roles and relations, vis-à-vis
interactions with investors, employees and customers.
However, companies cannot substitute for governments in the building
of policy consensus, legal frameworks, and the basic infrastructure needed
to establish fully functioning market economies. Governments should reject demands by publicly unaccountable and
frequently unrepresentative groups seeking to impose codes on businesses and
claiming the right to pass judgment on companies’ compliance with them. In Peru there are several examples of successful cooperation between the
public sector and the private, which have resulted in opportunities for
institutional development. One example is PROMPEX, whereby through a mixed
board of directors consisting of public and private representatives, the
organization has achieved a solid reputation as a facilitator and promoter
of private enterprise and the development of export activity. Other important cases representative of the private sector acting
jointly with government institutions are: a)
The ALCA PERU Commission, representing the position of entrepreneurs
and academics during the negotiations of an integration agreement between 34
Latin-, Central- and North American countries. b)
The ABAC, a private-sector entrepreneur
group that works in the negotiating process of the entrepreneurial sector in
the framework of the commercial integration of APEC. c)
The associations and work commissions in
accordance with development of productive links and competitiveness. 4.
Up-dating the Public sector to
improve its efficiency Taking into consideration the mentioned problematic of the Peru’s
public sector, as of 2001, a consensus has been taken between the various
political and economic sectors, and civil society on the need to modernize
the national government and to develop an adequate pattern of a
decentralized State. The basic core of this national agreement is the agreement among diverse
parties on the importance of strengthening the democratic character of
Peru’s public institutions and improving the State’s capacity to render
quality services. The government currently in power has allocated top priority to this
policy and has assigned the responsibility of coordinating the related
actions to the Prime Minister himself. The Program to Modernize, Decentralize and Democratize the State (PMDD),
a document released by the Presidency and Council of Ministers (PCM)
highlights the following objective: ·
A more efficient State, a more
decentralized State, a more democratic State. Within the legal framework of decentralization regional governments have
been created foreseeing the gradual transfer of functions and competence to
this new administrative level, including the responsibility of planning the
public budget. The goal is to promote a gradual process that clearly defines
the competence of each government level, identifies the corresponding
sources of financing and ensures that the local institutions have the
capacity and instruments to comply with the assigned functions. With reference
to the State decentralization, the specific objectives are: a)
Determine the competencies and functions
of each government level and their respective sources of financing, to
guarantee and support a sustained fiscal behavior on a long-term basis and
design the mechanism and conditions of the transfer responsibilities. b)
Design the main mechanism and
inter-government coordination and follow up of decentralization, adequate
information systems, through the support of the National Council for
Decentralization (CND). c)
Support the development of cross-section
systems to put the regional governments into action; following their
elections in November 2002. d)
Cooperate with a selected group of Town
Halls to strengthen their capacity of action. Within the modernizing framework of the State, Congress ratified the
State Modernizing Framework Law in January of this year. This is intended to
concretize the actual agencies’ structures and state programs. It also
concerns the reform of human resources and continues making headway to
modernize budgeting systems and purchases, through initiatives such as the
development of an electronic government system. In the
modernizing area the main objectives are: a)
Strengthen the capacity to formulate and
implement national and sector policy. b)
Improve human resources’ actions. c)
Support the introduction of electronic
services in the government. d)
Develop and introduce a new policy for
public purchases, including the design of an informatics system. The essential
components of this plan of action are: Organizing
the Executive Power a)
Rationalize the administrative device of
the State, reducing the number of entities and eliminating redundant
functions. b)
Clarify and simplify the organizational
structures of the decentralized public Ministries and institutions. c)
Guarantee the necessary autonomy of the
regulating entities. d)
Reorganize the branch offices of the
central administration to join the development process of regional
governments. Human
Resources The improvement program of Human Resources in the State seeks: a)
The adjustment of existing works
contracts. b)
The use of merit principles for hiring and
promotion, stability and responsibility in the presence of the public and
equal opportunities for public employment without discriminations due to
sex, ethnic origin or any other reason, but without lowering the necessary
qualifications required. c)
A public employment organization system
dependent of a central office with the necessary instruments to guarantee
the application of common standards for public service. d)
The adequate flexibility degree
that each sector and level requires selecting distributes pays and promotes
the employees at their service. e)
A compensation structure that at
the same time has fiscal support, makes public employment attractive, and
acts as an incentive program as it is linked to good work results.
Electronic Government
This
is the first step. Peru as a whole must advance in this area.
Have we really been taking advantage of the huge potential that
globalization and the Internet represent to facilitate our development? Do
we share a vision as to where we want to go in relation to the Information
Society? Peru,
according to the latest United Nations report concerning Electronic
Government, is located in 61st out of 190 analyzed countries.
This ranking reflects Peru’s past efforts regarding Electronic Government.
Nevertheless, there still remains much to be done. Electronic
Government seeks to use information technology, organized in a coherent,
integrated national strategy, through the agreement of civil society and
academics, to truly modernize the country and project it in a competitive
manner towards the world. Electronic Government includes the Internet,
telephone, information technology and mail, but above all it’s a strategy,
a shared vision. The
first thing we did was to identify where we must go. To outline a design the
Peru Compete commission was created. Digital
Agenda, a mixed work group operating in eight commissions has contributed
with the necessary material that will allow us to present “The National
Strategy for Electronic Government” next month.
Peru
Compete; Digital Agenda has worked on the following topics, which we will
briefly mention:
The
latest statistics indicate that Peru has approximately 3.5 million Internet
users. Nearly 75% of those 3.5
million Peruvians have access to public Internet cabins. Even more valuable
for the State is that there is a solid growth in the lower socio-economic
levels C, D & E. Another important statistic is that 50% of the Internet
users in Peru are located in the provinces outside of Lima. PCM
maintains coherence between the decentralization and modernization process
with the purpose of moving ahead with the state reform that will allow it to
comply with the goal of reducing poverty and increasing the quality of the
goods and services that are their responsibility to provide. 5.
Conclusions Regardless of the increased
participation level of the private sector in the economy, governments
should:
As
for business, they should continue to:
Sources: Speech
presented by the President of the Council of Ministers, Roberto Dañino
Zapata, on the National Plan for Competitiveness. Lima, Peru 12-04-2002 Speech presented by the President of the Council of Ministers, Luis Solari de la Fuente, to the National Congress of Peru. Lima, Peru 09-08-2002 |