Insight: Peru provinces sit on cash from mines; discontent grows
governments are sitting on billions of dollars in mining tax revenue
earmarked for new roads, schools and water projects – an institutional
failure contributing to anti-mining protests nationwide.
Regional and local governments
had 9.5 billion soles ($3.5 billion) from natural resources taxes
collected over the last decade lying dormant in bank accounts as of
December, according to a Reuters analysis of finance ministry data. The
swollen coffers represent a fortune in poor provinces where the poverty
rate is around 60 percent despite Peru’s decade-long boom fueled by
minerals exports to a rising China.
Most of the receipts come from mining, though a fraction come from energy or commercial fishing companies.
central government blames a lack of administrative capacity in the
provinces – a polite way of saying incompetence – for the spending
shortfalls that contribute to a cauldron of discontent in the
hinterlands and feed anti-mining sentiment continues here
Reuters: “Peru provinces sit on cash from mines; discontent grows”
This is a good note from Reuters which explains a little about how a substantial percentage of the mining royalty revenues received by local governments in Peru is either spent on silly projects or not spent at all. Here’s how it starts: