27/02/21: Consritution, Development and Democracy in Peru


Efraín Gonzales de Olarte 

At the current political crisis, the Peruvian Constitution has been put in question. Some want to reform it and others want to change it. The truth is that the current constitution, approved by the Fujimori regime in 1993 after the “auto-coup d’Etat”, gave the framework to the operation of the economy based on private enterprise and a subsidiary role of the State, in accordance with the current ideology neo-liberal of the 90s of the last century.

The so-called “neo-liberal model”, one hand, generated unprecedented growth until more or less 2015, reduced poverty, but not inequality. However, it would not have obtained these results if the international economic and financial evolution had not been so favorable. As soon as world economic growth began to decline, the Peruvian economy, dependent on prices and international demand for raw materials and agricultural products, began to decline and to worsen inequalities and the increase in poverty levels. On the other hand, the reduction of the state by the neo-liberal reforms did not allow fiscal resources to be sufficient to compensate for the inequalities generated by the economic model. It is very important to understand that neoliberalism generates growth with inequality, only correctable if, for example, the tax burden is greater than 20% of GDP, in the Peruvian case.

Consequently, it was assumed that the inability of the model to favor all Peruvians more or less evenly. In addition, the income and well-being of social groups belonging to 10% rich of the population grew at rates clearly higher than 50% poor. This enequality, it was an unquestionable reality. In addition, it is obvious that the neoliberal model and the Peruvian State do not have the ability to reverse the effects of the international economic and financial cycle.

Due to these factors, it has been deduced that part of the problem is the current Constitution that has reduced the capacity and quality of the state – as we have verified during the COVID19 pandemic – consequently, it is necessary to change or reform it. The truth is that the Fujimori Constitution has been functional while the international economic situation was favorable, now that the time of the lean cows is coming, it seems that it is no longer so.

It is important to take into account that: the difference between reforming and changing the constitution is equivalent to reforming the existing social pact or creating a new one. It must be remember that the constitution is, in the first place, the result of a social pact, through the deliberation of the political forces representing the electoral population, which shape the agreements in the form of a set of essential norms for the functioning of society, politics and the economy, within a democratic system.

The supporters of the reform of the constitution are those parties and political movements that start from the idea that the neoliberal model can be improved if the necessary adjustments are made. Its inspiration is based on the experience of other countries and on the constitutional doctrine that proposes periodic “amendments”, as the socio-economic and political problems change over time.

Those who propose a new constitution argue for its replacement, a position promoted by sectors of the left who believe that a new constitution could help change the economic model and the size and role of the state. In some way, they propose the re-foundation of the legal and economic order. In this vision there is a lot of voluntarism and, to some extent, demagoguery. Proposing a drastic change to the constitution would require a very large majority for the new constitution to have legitimacy and to really work. Situation that does not exist in Peru, given the atomization not only of politics but of society as well.

Those who think that the change of constitution is to return to the statist model, to the Chavismo that has failed, are also not correct, it is an ideological opposition from those who support neoliberalism. Given the structural changes that have occurred in Peru in the last thirty years, there are some structures that it is not easy or desirable to change, for example: having a macro-economic policy that maintains low inflation, low fiscal deficits and a strong currency. On the other hand, the entrepreneurial culture is an important asset for development, the opening of the economy and globalization is part of the daily perspective of people.

Today, Peruvian society and economy operate based on these parameters, consequently, I presume that those who want to change the Constitution would have to take these factors into account. Some innovative proposals should be made starting from the current situation, for example, reduce social and regional inequalities, reorient the role of the state. Consequently, the change of the constitution is, in practice, a reform in a much more social direction and of more equitable growth.

At this point in the 21st century, there is nothing else but to propose a more productive and, above all, a much more equitable economic system. To achieve this, the best thing would be for the forces of the right, the center and the left to agree on the adjustments in the constitution that would lead to development with equity and sustainability. For this purpose it is needed a “Social Pact for Development and Democracy” prior to a Constitutional Reform in order to generate legitimacy, social cohesion and promote human development in the long term.

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