CESR Statement on Peru before the Committee on ESCR

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CESR Statement on Peru before the Committee on Economic, Social, and Cultural Rights

This statement on Peru was made to the Committee on Economic, Social, and Cultural Rights at the UN in April, 1997.


Statement of Chris Jochnick
before the Committee on Economic, Social, and Cultural Rights
16th Session, April 28th, 1997

Thank you Mr. Chairperson and members of the Committee. By way ofintroduction, I am the Legal Director of the Center for Economic andSocial Rights, one of the few U.S.-basedorganizations with an economic and social rights focus. The Center hasfour years of advocacy experience in the field, but relatively littleexperience with the Committee, so I value the opportunity toparticipate in this session.

 

I will address my comments to the country of Peru, and specifically,to the issues of structural adjustment and foreign debt. As you know,these two related issues have assumed increasing importance to humanrights advocates. Most developing countries continue to spend far moreto service their foreign debts than they do on health and education.And, as was recently demonstrated by one of Peru's neighbors,adjustment programs threaten the full range of human rights; two monthsago, the Ecuadorian government's severe adjustment package led directlyto massive street demonstrations and the ouster of that government.Unfortunately, while the Human Rights Commission and this Committeehave both stressed the urgency of incorporating human rights standardsinto structural adjustment programs and debt negotiations, little hasbeen done to elaborate specific guidelines.

Peru provides fertile ground to consider these issues. The Peruviangovernment has been widely lauded for the apparent success of itseconomic reforms, which have brought inflation under control, improvedthe balance of trade, and led to one of the fastest growing economiesin the world. But, as discussed in the prior commentaries, Peru'seconomic recovery has come with a price, and it is not at all clearthat it is sustainable (particularly given the heavy reliance onshort-term and one-time benefits derived from non-renewable naturalresources and the sale of state companies).

Peru's structural adjustment reforms and debt negotiations underscore two common violations of economic, social, and cultural rights.

The first violation relates to the lack of targeted programs aimedat the most vulnerable members of society. As the Committee has stated,"even in times of severe resource constraints caused by a process ofadjustment the vulnerable members of society can and indeed must beprotected by the adoption of relatively low-cost targeted programs."(General Comment 3). The Special Rapporteur on Economic, Social, andCultural Rights and the Human Rights Commission have gone even further,declaring that "debt reduction should not take precedence over basicrights to food, shelter, clothing, employment, health services, and ahealthy environment." (HRC Res. 1996/12).

The initial stage of Peru's structural adjustment programdistinguished itself in two ways: first for its extremity in terms ofboth the pace and comprehensiveness of the reforms, extreme evenaccording to the IMF; and second for thenear complete absence of a safety net. The prior speakers described theeffects of the so called "Fuji-shock," which overnight doubled thenumber of Peruvians living in poverty. Early in the adjustment process,the Pan American Health Organization recommended an investment of closeto $ 3 billion to compensate for the dramatic deterioration in livingconditions. The government instead promised to provide 0 million for asafety net in the first year of reforms (1990), but only spent million.In the second year, it promised 7 million, but only spent 2 million.These amounts were woefully inadequate to deal with the massiveimpoverishment and suffering caused by the reforms and represented aclear failure to provide for the most vulnerable sectors of society.

The second violation relates to the lack of procedural safeguards inthe design and implementation of Peru's structural adjustment and debtrescheduling. The Committee has stated that "particular effort shouldbe made to ensure that protection [of economic, social, and culturalrights] is, to the maximum extent possible, built-in to programs andpolicies designed to promote adjustment" (General Comment 2). Accordingto the Limburg Principles, popular participation is required at allstages of the realization of economic, social, and cultural rights,"including the formulation, application, and review of nationalpolicies." (Principle 11) And the UN Declaration on the Right toDevelopment in its first article states that "every human person andall peoples are entitled to participate in, contribute to, and enjoyeconomic, social, cultural, and political development."

Structural adjustment and debt reduction are perhaps the mostcritical decisions facing developing countries in terms of the economicand social welfare of their populations. On average, developingcountries devote more than twice as much to debt servicing as they doto health and education. Moreover, the structural adjustmentaccompanying debt repayment often undermines the ability of communitiesto participate in the decisions that affect their lives, as more andmore control is placed into the distant and undemocratic hands ofinternational financial institutions, multinational corporations, andglobal market forces. In Peru, for example, one of the IMF conditionsprohibited the government from spending more than 1/12th of anestimated billion in earnings from the sale of certain state companies,on social programs, with the rest reserved for debt servicing.

 

Facing economic and social decisions of this magnitude, governmentsshould be required to meet the following minimal standards as derivedfrom the Covenant's obligation to ensure public participation andaccountability:

  1. publicly acknowledge their obligations relating to economic,social, and cultural rights in the context of debt rescheduling andstructural adjustment programs, so as to provide a framework fornegotiations and accountability;
  2. undertake social and environmental impact studies prior to theenactment of any significant economic reforms (as mentioned in theCommittee's General Comment 2);
  3. provide access to information about any significant reform package or rescheduling;
  4. ensure reasonable transparency in negotiations and decision-making;
  5. ensure reasonable participation in negotiations, which should include relevant NGOs,labor groups, and community representatives. Debt rescheduling mayrequire a higher level of confidentiality, but even in those cases, ata minimum, ministries in charge of social programs and long-termplanning should be included.

The Peruvian government has failed decisively and deliberately onall five of these criteria. Structural adjustment measures and debtrescheduling have fallen victim to President Fujimori's extremelyautocratic style. The government has made no public mention ofeconomic, social, and cultural rights as they relate to the reforms orservicing; has apparently done no social impact studies; has providedlittle or no access to information, often springing reforms on anunwitting public and Congress; and has greatly limited transparency andconsultation in the negotiations, in which only the Ministry of Financeand the Central Bank have had any role. Notably, when the Congresstried to slow the pace of reforms, President Fujimori simply overthrewit, rather than engage in serious negotiations.

 

These exclusionary measures have no reasonable justification andconstitute clear violations of the government's obligations under theCovenant.

 

I hope the Committee will raise these substantive and proceduralissues with the government and will suggest measures to ensure greatertransparency and participation in future decision-making. The Committeemight also recommend steps to monitor the impacts of adjustment and toprovide public accountability for any excesses. Additionally, thegovernment ought to be questioned about the secrecy that surrounds themilitary budget and about how spending on the military compares tosocial programs.

 

Finally, I hope that the example set by Peru and the interestalready expressed by Committee members will soon lead to a generalcomment on structural adjustment programs and foreign debt. Towardsthat end, the Committee might consider focusing on the proceduralcriteria that should be met by governments considering economic reformsand rescheduling. Transparency and participation are two of the mostfundamental, and often overlooked, pieces of the Covenant, and areessential to any long-term programs aimed at ensuring economic, social,and cultural rights.