Latin America granting more power to localities
Posted October 17, 2007 - Miami Herald

A movement to decentralize political power and resources is sweeping Latin America, with mixed results.


LA VIÑA, Peru -- The Cayaltí farm went bankrupt in 2003, costing 2,000 workers their jobs and devastating this poor area in the northern coastal state of Lambayeque.

But Lambayeque's governor, Yehude Simón, decided to help Cayaltí's workers. Part of the first wave of elected governors in Peru's history, Simón secured a central government loan guarantee that prompted private banks to lend $7 million and get the 16,000-acre farm back into business.

(right) Cayalti farm in Peru, where workers pick cotton, has turned around. photo: Jorge Humanchumo- MIami Herald
Related: Decentralization efforts in select countries

The turnaround at Cayaltí is one of the success stories in the effort to decentralize political power in Peru -- and throughout Latin America. It is a process that has been gathering force over the past 25 years and, with the support of international donors and lenders, is likely to continue in the coming years.

''I don't know of any Latin American country that isn't engaged in some process of devolving authority and resources to sub-national governments,'' said Alfred Montero, a Miami native and political science professor at Carleton College in Minnesota who has studied the issue.


Moving government closer to the people -- a concept well established in the United States but contrary to the hierarchical structure established by colonial Spain in most of Latin America -- is the driving force behind decentralization, analysts said.

Many countries have begun electing governors, turning money and power over to local and state governments.

''Decentralization is irreversible,'' former Peruvian President Alejandro Toledo told The Miami Herald. ``The fight against poverty means providing the provinces with resources.''

But Toledo, who was the prime mover behind Peru's decentralization effort, also lamented that too many local government officials are misspending the money transferred to them.

''You need to begin training people who can assume new responsibilities,'' he said. ``Some of the mayors have built mini-palaces instead of investing in poor people.''

The mayor of Huayre, a wind-swept town of about 10,000 in the Andes 100 miles northeast of Lima, spent $158,000 to build an erotic sculpture park in the central plaza, complete with outsized images of genitalia and of the maca root, which has been called the Andean version of Viagra. The mayor said he hoped to attract tourists, but Huayre still lacks paved streets and a sewage system in the meantime.

In the state of Cajamarca in northern Peru, several towns have built bullrings with the new money from the central government and from a change in the tax system that gives local governments a greater share of mining and oil proceeds.

''If central government in Peru is incapable of spending adequately, the lower in the ranks you get in the government, the quality will be even worse,'' said Fritz Du Bois, a leading economist.

But in Cayaltí, creditors are being paid off, workers are back on the job and the farm is now showing a profit by producing cotton, beans and sugar cane.

''I'm doing better than before,'' said Ubaldo Pérez, 19, taking a break from picking cotton for Cayaltí during harvest season.

The effort to decentralize power has moved forward in fits and starts over the years, analysts said.

Venezuela, for example, is re-centralizing power under President Hugo Chávez. He has created local government councils, purportedly to give ordinary citizens a greater say over how to improve their communities. Critics believe the councils are meant to weaken the power of mayors, who might present obstacles to the radical changes Chávez is making.


In Bolivia, governors were elected for the first time in December 2005, but President Evo Morales is fighting with many of them over who has spending authority on infrastructure projects.

Mario Cossío, the governor of the state of Tarija in southeast Bolivia, home to the country's immense natural gas reserves, complained in February that the central government in La Paz wouldn't give him approval to build a 70-mile pipeline badly needed to give his region more gas for local homes and businesses. Tarija has the $40 million needed to finance the project.

''It's a political decision to keep us from building the pipeline,'' Cossío said in an interview. ``Evo wants to centralize power.''

Professor Eduardo Gamarra, a Latin American specialist at Florida International University, noted six of Bolivia's nine governors oppose Morales.

William C. Smith, a Latin American specialist at the University of Miami, said the World Bank, the International Monetary Fund and the Inter-American Development Bank initially drove the push for decentralization in many countries as a way to get them to adopt market-friendly economies.

Linn Hammergren, a specialist at the World Bank, said local groups also have pushed central governments to give them more power.

''The local political and economic elites want more control,'' she said. ``They resent the capital.''

Decentralization in Brazil was the work of democratic reformers who believed fragmenting authority would impede generals who ruled much of the region decades ago from reclaiming power, said Kent Eaton, a Latin American specialist at the University of California at Santa Cruz.

''Colombia decentralized, largely in the attempt to end its armed conflict,'' Eaton added. But its effort ``actually ended disastrously, giving revenues and authority to local governments that are now controlled by the paramilitaries on the right and the FARC [guerrillas] on the left.''


Lambayeque's Gov. Simón says he is aware of the problems elsewhere in Peru but believes that decentralization is improving lives in his state.

Lima-based department stores are building outlets in Lambayeque, attracted by a growing local economy and an efficient government that is cutting red tape, paving roads and bringing water to the arid region.

Simón hopes to use his glowing reputation as a springboard to win the presidency in 2011 and replicate the political success of Néstor Kirchner in Argentina and Vicente Fox in Mexico, elected president from the ranks of governors.

''We're making decisions to resolve problems,'' Simón said in his office. ``Nobody knows this region better than those who live here.''

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