Political Risk Latin America Blog @PolRiskLatam

Commodities enter Peru’s politics

Posted in News and Articles, Political Risk by politicalrisklatam on November 30, 2010

by Naomi Mapstone for Financial Times – Beyond Brics, November 30th, 2010.

Peru’s ruling party has sent a seismic shiver through the mining community with a new bill to double royalties on base minerals as the country reaps the benefits of high commodities prices.

President Alan García’s Apra party could, in theory, have the numbers to push the bill through with the help of the National Unity and Nationalist parties, but it will first have to pass the auspices of a committee controlled by the party of Keiko Fujimori, daughter of the jailed former president Alberto Fujimori.

Nothing is certain: bills can, and do, often languish in Peru’s Congress, and the president can also veto them.

Mr García’s administration has been staunchly pro-investment, securing a raft of free trade agreements, improving business regulation and netting some $41bn in mining investments alone for the next decade. He often brands indigneous communities who oppose extractive projects as “dogs in the manger”, spoiling opportunities for all Peruvians.

But Peru’s election campaign is heating up and Mr García is barred from running again until 2016. Mercedes Araoz, the former finance and trade minister, who oversaw many of the country’s new FTAs, is running as Apra’s candidate. She faces fierce competition for the centre-ground from the likes of former president Alejandro Toledo, former mayor of Lima Luis Castañeda, Ms Fujimori and former prime minister Pedro Pablo Kuczynski. (continue reading… )


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