Transcript Panel 5: Political And Economic Reforms In Latin

13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In
Latin America
Wednesday, April 19th (3:00-4:15pm)
13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In Latin America
Reparations: Key To Reconciliation In Peru
Marcela Guerrero Casas
Peru’s Truth and Reconciliation Commission
(CVR) Reparations : The key to reconciliation?
Marcela Guerrero Casas
Maxwell School of Citizenship and Public Affairs
Syracuse University
April, 2005
Overview

Historical context

What are reparations?

Peru’s Comprehensive Plan for Reparations (PRI)

Challenges for implementation
Comisión de Verdad y
Reconciliación (CVR)
Established in June 2001
 Composed by 12 members
 Mission: to analyze crimes and human rights violations from
1980 and 2000, to hold public audiences, realize exhumations,
national process of violence, regional histories and
institutional reforms
 Estimated 70,000 deaths. 54% (Shining Path PCP-SL), less
than 2% (Túpac Amaru Revolutionary Movement (MRTA),
and the rest by government forces or rondas

What are reparations?
Restorative justice mechanism
 Protected and mandated under international law (Rome
Statute, Declaration of Human Rights, Convention against
Torture, etc.)
 Material reparations: rehabilitation, restitution and
compensation
 Symbolic: memorials, museums, exhumations, etc.

Peru’s Comprehensive Plan for
Reparations (PRI)
Established on July 20, 2005
 Who is eligible? Forced disappearance, abduction,
extrajudicial execution, murder forced displacement,
arbitrary detention, torture, forced displacement, etc.
 Five-dimensional framework: psycho-social, participatory
decision-making, intercultural sensitivity, gender equality
and symbolism.

PRI

Categories:
 Symbolic -December 10 -Day of National Reconciliation
 Health -training of physicians, community interventions
 Education - adult education, scholarships, fee waivers
 Civil rights -legal status of the disappeared, removingn
criminal records of those unjustly imprisoned, etc.
 Economic
 Collective -community-based programs
Challenges





Budgetary constraints
Individual financial reparations
Are the victims psychological ready?
Is it economically fair?
It could divide society rather than promote national unity
13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In Latin America
A Proposal To Reform The Presidential
Houses In Latin America
Guillermo Gonzales Arica
A proposal of modernization of
Presidential Houses in Latin America
to obtain a better Presidential Decision
Making System
Guillermo Gonzales-Arica
Overview









Introduction
Four principal aspects to be considered in a
modernization process
Functions that support presidential duties
The role of the Chief of Cabinet or Prime Minister
The role of Presidential Office and his advisors
The relationship with the Parliament
The need of a good Communications Policy
Conclusions
Recommendations
Introduction




Democracy in Latin America
Perception and acceptance of democratic
governments in Latin America
Latin American counties count with a
Presidentialist Constitutional regime. Presidents
have important legal duties and power.
The region’s political tradition of caudillos
(individualist leaders with charisma)
Four principal aspects to be considered
in a modernization process:




The role of the Chief of Cabinet,
The role of the Presidential Office and his
advisors,
The relationship with the Parliament and
The need of a good Communications Policy.
Functions that support presidential
duties




Establish a permanent relation with the
Congress.
Coordinate the Government State Policies.
Give legal advisory to the President.
The elaboration of strategic studies about the
political and social situation.
The role of the Chief of Cabinet or
Prime Minister




The President should share power with the chief
of the cabinet.
President’s representative in the Parliament
Coordination of the application of State Policies
Lead the follow up of the legislative production
The role of Presidential Office and
his advisors




Conflicts between advisors and cabinet of
ministries
Presidential Houses Vs Ministries
Advisors should feel passion for the anonymity
Presidential advisors, their power and
constitutional responsibility and liability.
The relationship with the Parliament




Pressures, communication an relationships
White House case (Reagan)
Inter-branch cooperation (Chile)
Congressional control
The need of a good
Communications Policy




Presidential Press Offices
Avoiding contradictions “Preventing leakage”
Role of spokespersons
Governmental achievements in the media
Conclusions




Presidents in the Latin American region have a huge amount of
responsibilities and concentrate too much power.
The Prime Ministers or Chiefs of Cabinet in most of the
countries of the region have many other responsibilities besides
coordinating the work of the rest of members of the Cabinet
When the Presidential team of advisors gains much more
influence and power for decisions than the Chief of Cabinet or
Prime Minister, the effectiveness of the Government’s work is
negatively affected
The distance or lack of periodic dialogue between Presidential
advisors, Members of Cabinet and Members of the Parliament
that belong to the Governmental group puts in risk the
accomplishment of the Government Action Plan
Recommendations








The Presidents need to delegate more responsibilities to the Chiefs of Cabinet or
Prime Ministers.
The Chiefs of Cabinet or Prime Ministers must be focused in a team work with the
President
The Presidential advisors must work in coordination with the Chief of Cabinet.
Periodic work meetings, having an established agenda should be hold between the
Chief of Cabinet and its members, Presidential advisors and Members of the
Parliament that belong to the Governmental political group.
The Presidential Houses or the Offices that supports the Presidents’ work should
organize those meetings.
Periodic meetings, focused in the Government’s Action Plan should be hold with the
main representatives of the national and international media, organized by the
Presidential Houses.
International Organizations, such as the World Bank, Inter American Development
Bank, the Organization of American States and the United Nations must be called by
the Governments in the region to focus their technical and financial support in the
modernization of the Presidential Decision Making Models.
The Presidents members of Grupo de Rio (Group of Rio, a regional mechanism of
consultation that gathers 19 Presidents in the Latin American region) should reserve a
space in their next Summit to make an analysis and encourage a debate about the
role of the Presidential Houses or the Presidential Decision Making Systems in the
achievement of their main governmental goals.
Thank you!
13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In Latin America
The Colombian Development Experience:
Trade-offs And Mixed Results
Jonathan Gupton
Colombia: Rural to Urban Migration and
the Informal Sector
Jonathan Gupton
April 19, 200
Maxwell School of Citizenship –Syracuse University
Colombia’s Informal Sector
• Informal Sector: sector of economy
that does not comply with labor
market legislation and does not
provide worker benefits.
• It is estimated that between 50 and
60% of the labor force in Colombia
is employed in the informal sector.
• Negatives: unregulated hours and
working conditions, often subject to
harassment from authorities or
exploitation from bosses trying to circumvent
labor unions.
• Positives: largely voluntary, ideal for workers (especially female) that put a high
premium on flexible hours. Provides temporary cushion against loss of job due to
trade reforms.
Labor Participation vs. Employment Rate
7 Cities:
1. Bogotá
2. Cali
3. Medellín
4. Barranquilla
5. Cartagena
6. Bucaramanga
7. Cucuta
Source: Flóres, Universidad de los Andes, Colombia (2003)
• labor participation rate generally increased, but not necessarily in the
same fashion as the employment rate.
Unemployment vs. Informal Employment
Source: Flóres, Universidad de los Andes, Colombia (2003)
• For the same set of 7 cities, Overall correlation between recent rises in
unemployment, underemployment, and informal employment.
Why is the informal economy so large in Colombia?
•
Most explanations center on 2 key factors:
1.
•
•
•
Reduction of trade barriers (liberalization) leading to
decreasing demand for labor
2. Increasing supply of labor in recent years (after an initial
slowdown in the 80s and 90s) due to an elevation of displaced
persons in conflict areas.
Import penetration increased from around 20% in 1984 to over
30% in manufacturing in Colombia;
For comparison, in Brazil, it grew from 5.7% in 1987 to 11.6% in
1998.
Sebastian Edwards (1999), along anecdotal evidence suggest
that unions do not have significant power in most Colombian
industries (public sector and the petroleum industry are an
exception), while in Brazil the evidence suggests that unions
played a much more integral role in labor negotiation.
Shift in sectors – Rural to Urban migration
Sector
1938
1951
1964
1974
1984
Agriculture
59.2
55.9
49.0
41.9
32.7
Commerce
5.7
5.6
8.9
12.6
17.8
Construction
2.8
3.7
4.5
4.7
5.0
12.7
13.2
14.3
16.4
Manufacturing 14.1
Mining
2.3
1.7
1.6
0.8
1.1
Services
15.9
20.4
22.8
25.7
27.0
TOTAL
100.0
100.0
100.0
100.0
100.0
Source: Departamento Nacional de Planeación, Plan de Economía Social, Agosto 1987, Bogotá, 1987, 168.
Informal Economy spike in late 90s
•
The Colombian government, DANE (Departamento Administrativo Nacional
de Estadística), defines informal employment as: “self employed workers
different from independent professionals, family workers, domestic servants,
and paid workers in small firms (up to 10 workers).”
• Labor Demand decrease in the late 90s: financial crises of late 90s,
macroeconomic effect on overall economic ouput and international capital
flows.
• Labor Supply increase in the late 90s:
increased access to government services such as health care,
rural migrants from forced labor camps,
escalating violence
(not necessarily economic migrants).
Multiple Viewpoints
• There are those that attribute this high unemployment and high
informal sector employment to structural reforms in the economy, of
the type outlines in the Washington Consensus or otherwise “neoliberal” macro adjustments.
• There are others which contribute this high migration strictly to a
failure of Colombian, US, or international authorities to bring about a
sustainable peace in the 40 year Colombian civil war.
• There are others (Goldberg, Pavcnik, National Bureau of Economic
Research, 2003), that suggest correlation between decreased tariffs
and increased unemployment (or increased employment in the
informal sector) is much weaker than is the correlation between
labor market rigidities and increased unemployment.
Implications and Policy Tradeoffs
• On one hand, informal sector, unregulated economics plays a vital
role in the survival of many low-income households, distributing
income perhaps more efficiently than the government.
• Creates an environment for thriving small businesses.
• On another hand, although there is a difference between an
informal economy and an illegal economy, there often is an
overlap. (already “concealed” informal sector provides cover for
the illicit sector)
• Also, the lack of regulation leads to problems such as lack of
pollution control and environmental control.
• On one hand, people are responding to incentives, utilizing human
creativity and ingenuity, and and surviving with their small
businesses, but on another hand, it allows the government to wash
their hands from responsibility of rapidly growing urban poverty.
13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In Latin America
Banking Sector Reform In Peru
Juan Carlos Izaguirre
BANKING SECTOR
REFORM
AND ITS ROLE IN
DEVELOPMENT
The case of Peru
Juan Carlos Izaguirre
April 19, 2006
Banking Reform - Timeline
Stabilization Economic
Program
growth
Fiscal/monetary
equilibrium
Economic
Crisis
1987-1990
1990-1993
Banking Sector
Reform


Liberalization of
market
Improvement of
supervisory and
regulatory
agencies
International
Crises
Thread
Growth …
and
development?
1998-2000
1994-1997
2001-….
Banking Sector Banking Sector



Improving
supervisory
schemes
International
standards
Credit boom


Capacity of
the state to
resolve crisis
Minimized
effects over
economy
Banking
Sector
Agenda



Agriculture
Small
business
Interest
rates
Economic Crisis
1987-1990
Macroeconomic
Indicators (%)
Inflation
GDP growth
Banking System: High
participation of the state
1986
1989
62.9
2,775.3
10.8
-11.9
Investment growth
45.6
-26.1
Total liquidity / GDP
14.9
6.3
Tax rate
11.2
5.8
5.2
6.2
Fiscal deficit / GDP
-Interest rate ceilings
-Subsidies
-Taxes
-Compulsory use of local
currency
-Multiple exchange rates
Collapse of the
banking system
Stabilization Program
1990-1992
Fiscal and monetary equilibrium policies
 Banking sector (IADB, WB):

• liberalization of interest rate, exchange rate
• New Banking law (1991): more requirements for
constitution of banks, openness to foreign capital,
creation of deposit insurance fund, creation of
database of debtors
• Liquidation of most state banks in 1992
• New Central Bank law (1992): limiting role to preserve
monetary stability
• Modernization of Supervisory and regulatory agencies
(IADB: $ 221’)

Reforms under Fujimori’s democratic period
Economic Growth
1994-1997
Growth (7%) and fine-tuning of reforms
 Banking sector:

• Privatization of remaining state commercial banks
(1994, 1995)
• New Banking Law (1996): restricted participation of
state in banking sector, application of International
Standards of Supervision
• Training Programs for supervisory agency

Outcomes:
1990
1998
Financial intermediation
3.4%
23%
Assets
4 bn
22 bn
Foreign capital
3%
20%
13%
7%
Non-performing loans
International Crises Thread
1998-2000
“The Niño” climatic phenomenon
 Asian, Russian and Brazilian financial crises
 “Credit boom” in consumption sector, credit
overexposure, bad governance of Peruvian banks

 Regulatory agency capable of responding
to thread (new mechanisms to resolve crisis)
10 banks went out of Peruvian system, but no
systemic risk
 Minimum cost, compared to other Latin American
countries.

Growth… and development?
2001-….

Continuous economic growth and better
performance of banking sector
Pending agenda:
 From stabilization to further development
• Agriculture, small business, low income sectors
• Interest spreads
• Limits of deposit insurance fund

Role of the state : direct lending Vs. reducing
costs of transactions ??
BANKING SECTOR
REFORM
AND ITS ROLE IN
DEVELOPMENT
The case of Peru
Juan Carlos Izaguirre
April 19, 2006
13th Symposium on
Development and Social Transformation
Panel 5: Political And Economic Reforms In Latin America
Wednesday, April 19th (3:00-4:15pm)
Marcela Guerrero
Casas
Reparations: Key To Reconciliation In Peru
Guillermo Gonzales
Arica
A Proposal To Reform The Presidential
Houses In Latin America
Jonathan Gupton
The Colombian Development Experience:
Trade-offs And Mixed Results
Juan Carlos Izaguirre
Banking Sector Reform In Peru