{"id":50005797,"date":"2016-04-08T17:40:03","date_gmt":"2016-04-08T16:40:03","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=5797"},"modified":"2023-06-05T15:17:59","modified_gmt":"2023-06-05T14:17:59","slug":"5797-the-china-factor-in-perus-elections","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/5797-the-china-factor-in-perus-elections\/","title":{"rendered":"The China factor in Peru’s elections"},"content":{"rendered":"

In the chilly mountains of\u00a0Hunacabamba, northern Peru, heated discussion about a Chinese-funded mining project encapsulates the mood as the republic sets about choosing its next president.\u00a0In this remote area near the border with Ecuador, surrounded by vast and mysterious moorlands, rural communities stand in opposition to the Rio Blanco Copper mining operation, owned by China\u2019s Zijin Mining Group<\/a>. Each time a presidential candidate visits the region and the community asks about the project, they promise to improve dialogue.<\/p>\n

Peru\u2019s recent economic boom<\/a> is associated with huge investment in mining, led by Chinese. The Rio Blanco project in the province Piura is the site of just one of 145 <\/a>recorded socio-environmental conflicts in Peru that the next president will have to address, with the added complication of an economic deceleration<\/a>. At least five major projects are stagnant, with many left wondering what the future holds.<\/p>\n

On Sunday, Peruvians will select two of the 10 presidential candidates to face each other in a run-off on June 5. The favourites are Keiko Fujimori from Fuerza Popular<\/a> (Popular Force), who currently heads the polls with around 33% of voting intentions, Pedro Pablo Kuczynski of Peruanos por el Kambio <\/a>(Peruvians for Change) with 16%, and Veronika Mendoza of the Frente Amplio<\/a> (Broad Front) with 15%. In fourth and fifth place respectively, with less than 10%, are Alfredo Barnecha of Acci\u00f3n Popular<\/a> (Popular Action) and former president Alan Garcia from APRA <\/a>(American\u00a0Popular Revolutionary Alliance). Outgoing president Ollanta Humala\u2019s Partido Nacionalista Peruana<\/a> (Peruvian Nationalist Party or PNP) is not fielding a candidate due to\u00a0the low level of voting intentions it represents. Peruvian presidencies are constitutionally limited to one five-year term.<\/p>\n

Analsysts agree that the eventful campaign – in which the National Jury of Elections\u00a0excluded <\/a>two candidates who were initially competing with Fujimori and which has seen a further seven candidates clock up less than 10% –\u00a0will\u00a0inevitably go to a second round.<\/p>\n

China is Peru\u2019s main foreign investor, with US$19 billion invested in the country, some 34% of all\u00a0foreign investment. The US accounts for second highest amount with US$10 billion followed by Canada with US$8 billion.<\/p>\n

Voters in conflict<\/strong><\/p>\n

Keiko Fujimori, the daughter of ex-president Alberto Fujimori who is currently serving a 25-year sentence<\/a> for corruption and human rights violations, has switched to a more conciliatory tone on the subject of mining conflicts<\/a> in recent months.<\/p>\n

During her unsuccessful 2011 campaign, Fujimori argued for a form of development based on\u00a0mining investment. This time around she has spoken of\u00a0the need to engage in dialogue with affected communities and to properly implement a process of prior consultation with indigenous people.<\/p>\n

In the case of the Rio Blanco mine and other paralysed projects, Fujimori has said that she will look to establish a permanent mechanism for dialogue to avoid future conflicts and \u201cachieve a healthy co-existence between mining and agriculture\u201d.<\/p>\n

Kuczynski has adopted a similar posture: \u201cThere are people that don\u2019t like mining. There will always be someone who doesn\u2019t want a quarry next to their house and that\u2019s understandable. Mining produces jobs and money but it should be clean. No dust <\/a>and no smoke,\u201d he recently told a local radio station.<\/p>\n

However, the candidate who has capitalised most on the discontent surrounding Peru\u2019s mining drive is Mendoza from Frente Amplio,\u00a0a\u00a0coalition of leftist organisations, which has seen a surge in voting intentions in the past few weeks and could now see the congresswoman\u00a0from Cuzco contesting the second round.<\/p>\n

Mendoza has severely questioned environmental practices in the mining sector and on visiting places like Rio Blanco and Las Bambas, which is owned by MMG, a subsidiary of China Minmetals Corp<\/a>., Guoxin Investment Corp International, indicated that these projects would only advance if they received popular approval.<\/p>\n

Environmental footprint<\/strong><\/p>\n

Latin America is the destination of the second highest amount of China\u2019s overseas investment after Asia. Much of this investment has focused on extractive industries. However, the slowdown in the Chinese economy paints an uncertain picture.<\/p>\n

Official figures indicate that China will continue to be the main investor in Peru in the coming years. Asked by Di\u00e1logo Chino<\/em> about commercial relations between the two countries, Jos\u00e9 de Echave, from Frente Amplio\u2019s technical team, said that despite problems and falling prices, cooperation <\/a>would remain strong.<\/p>\n

\u201cWe\u2019re talking about a principal actor, which is fundamentally different to North American, Australian or European companies,\u201d Echave said, adding; \u201cChinese companies have financial autonomy and a massive investment fund which allows them to keep buying up projects and acquiring consortia in adverse circumstances.\u201d<\/p>\n

Rapid growth in China brought about a boom in Latin American raw material exports, but at the same time had a big role<\/a> in environmental degradation and social conflicts in the region, according to a study<\/a> by Boston University\u2019s Global Economic Governance Initiative<\/a> and Peru\u2019s Universidad del Pac\u00edfico<\/a>, released last year.<\/p>\n

Echave recognises that Chinese investment has a big environmental footprint and contributes to the idea that it doesn\u2019t have strong social and environmental standards. However, the former vice-minister for the environment believes that Chinese investors act like any other<\/a>: \u201cThey will try to abide by the country\u2019s social and environmental laws. Our task is to strengthen industrial and environmental standards<\/a> so that new operators perform in an acceptable way.\u201d<\/p>\n

APRA\u2019s Enrique Cornejo, believes China is learning and improving: \u201cSometimes they don\u2019t comply with environmental standards, but this will change,\u201d he said.<\/p>\n

The prospects<\/strong><\/p>\n

Fuerza Popular\u2019s technical team did not respond to questions about how the party sees the relationship with China if Fujimori is elected, but she has perhaps the closest ties with Asian country. Fujimori has met many times with Chinese Communist Party officials, the last time being in July last year.<\/p>\n

\u201cChinese investments dominate the extractive sector and they have more than just a medium and long-term vision,\u201d Echave said, adding; \u201cChina is thinking about the next 30 or 40 years. As opposed to US counterparts, Chinese investors follow a more strategic logic.\u201d<\/p>\n

The majority of Chinese investments and projects are located in the Andes: Proyecto Galeano, adjacent to the controversial Conga project (in Yanacocha province), Toromocho (Jun\u00edn), Las Bambas (Apurimac), Pampa de Pongo (Arequipa), Don Javier (Arequipa) and Rio Blanco (Piura). Investment in these projects is expected to reach US$1.5 billion.<\/p>\n

\u201cPeru already has an very powerful instrument of cooperation and association with China and it\u2019s not making the most of it. What the US was 30 years ago, China is today \u2013 Peru\u2019s main trading partner<\/a>,\u201d Cornejo said, whilst also pointing to fishing and energy projects. \u201cYou have to say that there\u2019s a possibility this presence could be really interesting in other strategic sectors like petrochemicals, for example, which means energy development, and this is an accessible type of business for the Chinese,\u201d he added.<\/p>\n

Another of the themes mentioned by Cornejo relates to the challenges posed by the growing trade relationship. \u201cThere are some quite complicated issues because of the sheer size of China, which makes competition a bit unequal. Peruvian textiles have suffered a lot because of imports that have been \u2018dumped<\/a>\u2019 by China,\u201d he said.<\/p>\n

Primary material dependence<\/strong><\/p>\n

To mine or not to mine? That is the question presidential candidates have to answer. Frente Amplio says that 70% of conflicts are not about the wholesale rejection of mining, \u00a0but rather conflicts about co-existence. \u201cYes, 30% [of conflicts] relate to the rejection of projects. But no one is saying that we should stop mining. We are concerned about the extractivist model which mining is a central pillar of. But with a good framework for protecting the rights of affected populations,\u201d Echave said.<\/p>\n

Alan Garc\u00eda\u2019s Alianza Popular has been the main critic of Frente Amplio\u2019s proposals on mining investment.<\/p>\n

Cornejo has criticised Mendoza\u2019s party for \u201cthinking that mining is bad and that it should be replaced with agriculture\u201d. According to Cornejo there are many countries in the world that have both quality mining and agriculture. \u201cYou have to be smart and look at what other countries, such as Canada, have done. You can do many things before getting involved in a conflict and it\u2019s the state that has to do something about it, not a third party, NGOs or the private company itself,\u201d he said.<\/p>\n

Another bone of contention is the implementation of the process of prior consultation<\/a>. Presidential candidates mention this in their plans, albeit with varying emphasis. Both Fujimori and Kuczynski have suggested that this tool \u2013 which seeks dialogue between the state and indigenous communities \u2013 should be deployed in areas affected by industrial exploitation prior to beginning operations. Mendoza, meanwhile, sustains that consultation should be undertaken with all indigenous communities.<\/p>\n

The three leading candidates have strongly criticised how the current government has dealt with social conflicts, many of which are associated with the weakening of environmental regulations<\/a>. All have promised to strengthen the organisms responsible for controlling and regulating extractive industries.<\/p>\n

Just days before the elections and with a place in the second round hotly disputed between Mendoza and Kuczynski, this topic is\u00a0highly visible on Peru\u2019s political landscape.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chinese investment in Peru a priority as candidates call for an end to mining conflicts<\/p>\n","protected":false},"author":40000225,"featured_media":50005792,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[13887,50029993,566],"hashtags":[],"country":[50002601],"class_list":["post-50005797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-conflict","tag-elections","tag-mining","country-peru"],"acf":[],"yoast_head":"\nThe China factor in Peru's elections | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Chinese investment in Peru a priority as candidates call for an end to mining conflicts\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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