Better capacity management brought public investment record

The public investment during 2021 it reached S / 39,103 million. This is how a historical record, since it was exceeded by 21% in 2018 (S / 32,275 million), the pre-pandemic year with the highest execution.

The Ministry of Economy and Finance (MEF) highlighted that more than 889 local governments and 11 regional governments transferred 75% of their budget execution, which in recent years “was particularly low.”

In this regard, David Grández, consultant to the MEF’s General Directorate for Multiannual Investment Programming (DGPMI), explained that the success achieved is largely due to the Government-to-Government Agreement (G2G), since with the Authority for Reconstruction with Changes (ARCC) it was possible to execute S / 1,992 million (79%), a higher figure than ministries with a similar budget, but that do not have these provisions.

In his opinion, the important G2G measures that should be replicated in the sectors and, if possible, in subnational governments are to massify the contracting of PMOs (Project Management Office), incorporate collaborative contracts in the Contracting Law, expand control concurrent and accelerate the BIM Plan.

Better personnel management

However, Grández specified that ministries such as the MEF made better progress than the ARCC, since a double strategy for public investment was implemented after allocating a budget 21% higher than 2020 and 14% more than 2019.

With this higher budget ceiling, an effort was required in terms of investment management, for which the MEF “also provided strong support, monitoring and technical assistance to officials at the three levels of government, because the key lies in the people, “he added.

In that sense, During 2021, the MEF provided 13,700 technical assistance and 1,100 trainings to 120,613 officials between regional governments and municipal governments. The figure is 106% higher than what was registered a year before the pandemic.

Slopes

Despite the good results, the lawyer notes that there are sections to be covered. For example, in 2021 up to 355 entities did not exceed 50% of execution – 345 are municipalities.

This translated into more than S / 2,000 million unemployed that would have allowed the development of public services infrastructure.

Even the worst execution rates – and gaps – are found in municipalities enriched by mining, which represents “a breeding ground for conflicts in strategic areas for the economy,” according to Grández.

It’s worth specifying that in 2021 these municipalities stopped executing S / 1,490 million of their project budget.

“This is where the future actions of the MEF should focus, involving even more its key directions of public investment (programming, budget and supply). Likewise, if qualified personnel do not reach these local and regional governments due to high corruption and turnover, then let’s reform the Servir Law to stimulate meritocracy and permanence of the best in the executing units, ”he said.

In this regard, the economist Pablo Secada pointed out that A binding infrastructure plan is also lacking, as neither public nor private investment in infrastructure is prioritized. “Not all the works are operated or maintained. Its impact is not independently evaluated. There are no performance indicators ”, he concluded.

Peru, second lowest risk level

Peru’s country risk level is the second lowest in Latin America, only after Chile, thanks to the nation’s high fiscal and payment capacity. For the Canadian capital bank, this situation would continue in 2022.

Scotiabank’s head of monetary economy, Mario Guerrero, told a local media that, at the end of 2021, Peru’s country risk, measured by EMBIG (Emerging Market Bond Index Global), settled at 173 basis points as of December 27 . In this line, it is only surpassed by Chile, with 155 basis points.

Further behind are Brazil (313 points), Mexico (351 points), Colombia (356 points) and Argentina (1,743 points).

Reactions

Hugo Ñopo, researcher

“After 8 years of” plateau “around S / 30,000 (millions), this 2021 we have reached almost S / 40,000 million. The key? Work with the local executors of the public apparatus. People!”.

Pablo Secada, economist

“A binding infrastructure plan is also lacking. Neither public investment nor private investment in infrastructure are prioritized. Its impact is not independently evaluated ”.

The data

Margin. In 2021, an average of 71% was achieved in execution – the most important figure in recent years. Thanks to the fact that the national government reached 78% of execution, followed by regional governments and local governments, with 72% and 64% respectively.