US embassy cable - 05LIMA4634

UNCLAS SECTION 01 OF 02 LIMA 004634 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV, PINR, PREL, PE 
SUBJECT: DECENTRALIZATION: MAKING DEMOCRACY WORK IN PERU, 
PT 2 
 
REF: A. 03 LIMA 5143 
     B. 03 LIMA 4668 
     C. 03 LIMA 0253 
 
1. This is the second in a two-part series on Peruvian 
decentralization. It focuses on the 10/30 referenda on 
forming macro-regions, current opinions, and possible 
outcomes. 
 
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SUMMARY 
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2. SUMMARY. On the eve of the 10/30 referenda on the 
formation of macro-regions, the GOP finds itself at a 
critical juncture in its attempt to decentralize and extend 
democratic institutions to the local and regional levels. 
Sixteen of 25 departments will vote on whether or not to 
consolidate and form five macro-regions.  Polls indicate a 
significant number of undecided voters and few instances of a 
clear majority necessary for consolidation.  Seven of the 16 
regional presidents have switched from supporting to opposing 
the referenda.  The results of the referenda will determine 
the future direction of Peru's decentralization reform. 
Should one or more of the five referenda pass, the reform 
will gain momentum as the new macro-region(s) will receive 
increased funding and could become more attractive to 
investors.  If the referenda fail, then the existing 
decentralization process will require a comprehensive 
re-think by the GOP and political parties.  END SUMMARY. 
 
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WHAT'S AT STAKE? 
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3. A major critique of previous decentralization attempts was 
that the Central Government formed regions through mandates 
and not democratic consultation.  In response, the current 
decentralization law mandates that the macro-regions be 
created through three referenda held in 2005, 2009 and 2013. 
Macro-region formation requires the individual regional 
governments to negotiate mergers that respect social and 
economic development criteria laid down by the GOP. Proposals 
are then submitted to the National Decentralization Council 
(CND) for approval before being sent to a referendum. 
 
4. Five potential macro-regions have completed the 
requirements and are part of the 10/30 referenda: 1) the 
Northern Region (Tumbes, Piura, Lambayaque), 2) The Northern 
Central East Region (Ancash, Huanuco, Lima Provincias, Pasco, 
and Junin); 3) the Ica-Ayacucho-Huancavelica Region; 4) the 
Apurimac-Cuzco Region; and 5) the Arequipa-Puno-Tacna Region. 
 The referenda votes will occur in each of the 16 departments 
considering consolidation. 
 
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WHAT ARE THE PROSPECTS? 
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5. The referenda are plagued by a lack of knowledge by the 
electorate on the issues and by legal ambiguity on some of 
the implementing details.  CND President Luis Thais publicly 
acknowledged that the GOP's publicity campaign has been 
relatively ineffective, estimating the week before the vote 
that 25 percent of the electorate is unaware of the 
referenda, much less of the issues at stake. 
 
6.  In anticipation of the referenda, some critical details 
remain undecided and Congress, as of 10/27, continues to 
consider legislation to address these shortfalls.  For 
example, the current legislation requires that a "yes" vote 
in each department requires a 50 percent-plus-one majority, 
but is vague as to whether this means of all registered 
voters or of just those who voted, whether in calculating the 
vote only "yes" and "no" ballots are counted, or whether 
blank or null ballots are included in the count. 
 
7.  It also remains uncertain what the result will be if 
some, but not all, of the prospective members of a 
macro-region vote "yes" and one or more vote "no."  Will 
those voting "yes" constitute a macro-region, or is unanimity 
required?  Finally, the locations of the capitals of any new 
macro-region are not defined, nor does existing legislation 
address the distribution of seats on any of the new regional 
councils.  Since these are issues that could influence 
voters' decisions as to how they will cast their ballots, the 
absence of clear definitions may well prejudice the chances 
of a "yes" vote in many departments. 
 
8.  President Toledo has been a strong proponent of a "yes" 
vote, and opposition party leaders Lourdes Flores (Unidad 
Nacional alliance) and Valentin Paniagua (Accion Popular) 
have recently joined the chorus.  The opposition APRA party, 
on the other hand, has long pressed for the referenda to be 
postponed, arguing that the decentralization process needs to 
be better planned and implemented before proceeding to the 
formation of macro-regions. 
 
9.  APRA leader Alan Garcia has urged all eligible voters to 
go to the polls.  He has also stated that his party is 
neutral on the referenda as a whole, leaving it up to each of 
the APRA regional presidents to decide whether a particular 
referendum stands to benefit his region.  Five of the seven 
APRA regional presidents whose departments will be voting on 
Sunday have switched from prior support to active opposition 
to the referenda affecting their regions.  (COMMENT:  Some 
critics charge that Garcia's "hands-off" policy is just an 
attempt to camouflage an APRA decision to de-rail the 
decentralization process, positing that the party is 
concerned that it would not/not control the new macro-regions 
and therefore would enjoy reduced patronage opportunities. 
END COMMENT.) 
 
10.  It remains unclear how many of the macro-region 
referenda will pass.  The polls to date indicate that only 7 
of 16 departments will vote "yes," and at least one 
department in all of the proposed macro-regions will vote 
"no."  Political and media observers suggest that the best 
prospects for new macro-regions are in the north, with Piura 
and Lambayeque (but probably not Tumbes) forming one 
macro-region, and in the south, with Arequipa and Puno 
joining forces.  Ica seems to be firmly in the "no" camp, and 
without its participation (and coastal access), the union of 
the other two macro-region candidates Ayacucho and 
Huancavelica, would not make sense. 
 
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COMMENT 
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11.  The results of the referenda will determine the future 
direction of Peru's decentralization reform.  Should one or 
more of the five referenda pass, the new macro-region(s) will 
become pilot projects, enjoying increased funding, receiving 
preferential attention from the GOP, and attracting enhanced 
interest from potential investors, foreign and domestic.  If 
the referenda fail, then the existing process will require a 
comprehensive re-think by the GOP, Congress and the political 
parties, with the issue of decentralization's future likely 
becoming an issue in the upcoming general elections.  END 
COMMENT. 
STRUBLE