, APRIL 28 2021 "The investment of canon resources at a decentralized level does not respond to a territorial view"

In the "Canon and Royalties" block that was held at the conference "Southern Mining Corridor: Challenges for the development of the regions", in Heading to PERUMIN, the director of Videnza Consultores, Milton Von Hesse, pointed out that the regions of Peru have received significant contributions from the canon and mining royalties; however, these resources have not been adequately invested by the regional authorities.

"The investments of the canon resources at a decentralized level are characterized by not responding to a territorial view of development; in addition, the short term is privileged and not the long term; and there is low effectiveness and low efficiency in budget execution", said Milton Von Hesse.

Similarly, he argued that in countries that decide to invest their resources well, 1% growth in public investment is reflected in 0.6% progress in their GDP; while in the countries that do not do so, the impact is only 0.3% of their GDP growth.

"It is clear that more investment means more growth; but this investment has to be made correctly. It is not worth investing more if it is not accompanied by a management that ensures the efficiency of that investment", considered the former Minister of Housing, Construction and Sanitation.

The director of the Law School of the Catholic University of Santa María, Juan Carlos Agramonte Mostajo, had a similar position; he pointed out that there are negative experiences in the use of the canon.

"We have to ask ourselves how the foreign currencies are being used, since the regional governments are eagerly awaiting the transfers. And the years go by but the population does not see the effects of the transfers. There is an overflow in the management capacity, which does not comply with making government projects," he said.

For his part, the dean of the Faculty of Economics and Finance of the Universidad del Pacífico, Carlos Casas, pointed out that mining activity means that there are more resources in the departments and the possibility that there is a need to spend in a way that is not only efficient but also effective.

"If we want people to improve their quality of life, a reform of the State is required; and when we speak of the State, we also consider regional and municipal governments. In addition, we must consider that mining allows us to obtain resources and improve the living conditions of the population," said Carlos Casas.

The president of PERUMIN 35 Mining Convention, Claudia Cooper, highlighted the need to achieve consensus.

"Consensus is the only way to generate a long-term vision and avoid this volatility in decisions. We must incorporate the population, producers and society. It seems that this long-term vision has been reflected in many regulatory projects that in the end have not achieved this vision and this effectiveness and flexibility in public investment," said Claudia Cooper.

Works for Taxes

This block also included the participation of the president of the Alliance for Works for Taxes (ALOXI), Darío Zegarra Macchiavello.

"The Works for Taxes mechanism is naturally decentralizing. Ninety-five percent of the projects are decentralized", he said.

He also indicated that of the resources allocated to infrastructure between 2016 and 2020, at a value of S/ 137 billion, have been returned at all levels of government.

"This would have closed the gap in education, energy, telecommunications, water and health. In addition, when we talk about territorial development, we must also include the concept of closing gaps in productive infrastructure," said Darío Zegarra.

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