Gold loses some luster after Trump’s decisive win
Gold’s slide is a marked turnaround for a commodity that had surged by more than 30% in the year leading up to the US vote.
Peru must shake up its electoral system and root out graft before the 2021 election to restore faith in its political leadership following the country’s biggest-ever bribery scandal, President Martin Vizcarra said.
The government is urging the opposition-controlled Congress to debate a series of bills with new rules on campaign financing and selecting candidates. Congress has little more than a year to approve the changes before the next election cycle to give reassurance to dismayed voters, Vizcarra said in an interview Friday.
“On the bicentenary of our republic in 2021, we need a stronger democracy and greater trust of the public in the authorities,” he said on the presidential plane following a visit to the remote Madre de Dios region in the Amazon jungle. The changes can’t wait, he said.
Opposition parties this week promised to debate his reform package though promptly rejected the first proposal to reduce lawmakers’ immunity from criminal prosecution.
Multiple initiatives
Vizcarra has presided over a period of unprecedented political turmoil after the country’s last four heads of state and the head of the opposition were all implicated in a vast bribery probe. The latest push by Vizcarra follows a campaign last year to fight corruption in the judiciary that buoyed his popularity while fueling confrontation with Congress.
His administration is also working on changes to the pension system to give more workers access to a retirement fund and will hold talks with the opposition on labor reform, in an effort to lure workers out of Peru’s vast informal economy. Vizcarra said the government may draw up its own proposals to change labor legislation, if it can’t reach a consensus with Congress.
Investors have taken the political turbulence in their stride, reassured by the country’s track record for fiscal discipline, low inflation and solid growth.
Underpinning investor confidence are the country’s vast mineral riches. Peru is the second-largest copper producer and a major supplier of zinc, gold and silver. A new wave of mining investment began last year after a rebound in copper prices, with projects by Anglo American Plc and Aluminum Corp of China Ltd.
‘Strengths and stability’
While increased trade tensions between the U.S. and China choked off the price rally and threaten Peru’s biggest source of foreign currency, Vizcarra said economic growth remains intact.
“The strengths and stability of our economy will allow Peru to keep growing well above the average for the region,” he said.
The economy expanded 4% last year, the fastest among Latin America’s biggest economies, with 2.2% inflation. The International Monetary Fund expects Peru’s gross domestic product to rise 3.9% this year while the government targets 4.2%.
Vizcarra spoke following a visit to an area of the Amazon rainforest in southeast Peru known as La Pampa. Once the country’s biggest illegal gold mining hub, the government deployed 1,300 thousand police officers to the area in February to begin shutting down the alluvial mining operations.
Peru is Latin America’s biggest gold producer, with 2018 output of 145 tons according to the U.S. Geological Survey. La Pampa produced 25 tons a year, according to government estimates, and most of the gold was smuggled across Peru’s borders with Bolivia and Brazil.
The government aims to eradicate all illegal mining from the 12,000 hectares that comprise La Pampa, as well as elsewhere in the region, and begin reforestation.
“It’s work that will take various years but we’re going to recover this vast territory for the Amazon.”
(Reporting by John Quigley).
