Peruvian dilemmas - Sophie Antezana
Doctors Mark Fafard and Rob Haley from the University of Florida have coined a term to describe the Peruvian extractivism revenue distribution. Peru's Canon distribution system was “designed to collect a percentage of taxed profits from the country's natural resource industries and redistribute these funds into communities that are important to the natural resource extraction process” (Fafard and Haley). The intent is a form of compensation for any negative social/environmental impacts, yet it fails to address crucial needs that occur in extraction communities. For example, public health facilities are needed to help with the previously mentioned contamination and pollution in water.
The mechanism, Canon system, fails to cover these basic needs due to an inadequate framework in the local administration. Scientists from the National University of Moquegua, Peru, found that while regional governments distributing central resources will decrease local conflict, fiscal decentralization can increase conflict since citizens do not trust the administration due to “contradictory state policies”. The overreliance on the Canon system allows externalized problems to be pinned on local administrations, protecting the central government's extractions and image while avoiding giving necessary compensation.
https://www.emerald.com/ijssp/article-abstract/34/5-6/392/155293/Natural-resource-profits-and-the-implications-for?redirectedFrom=fulltext
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