This statement on Peru was made to the Committee on Economic, Social, and Cultural Rights at the UN in April, 1997.
Statement of Chris Jochnick
before the Committee on Economic, Social, and Cultural Rights
16th Session, April 28th, 1997
Thank you Mr. Chairperson and members of the Committee. By way of introduction, I am the Legal Director of the Center for Economic and Social Rights, one of the few U.S.-based organizations with an economic and social rights focus. The Center has four years of advocacy experience in the field, but relatively little experience with the Committee, so I value the opportunity to participate in this session.
I will address my comments to the country of Peru, and specifically, to the issues of structural adjustment and foreign debt. As you know, these two related issues have assumed increasing importance to human rights advocates. Most developing countries continue to spend far more to service their foreign debts than they do on health and education. And, as was recently demonstrated by one of Peru's neighbors, adjustment programs threaten the full range of human rights; two months ago, the Ecuadorian government's severe adjustment package led directly to massive street demonstrations and the ouster of that government. Unfortunately, while the Human Rights Commission and this Committee have both stressed the urgency of incorporating human rights standards into structural adjustment programs and debt negotiations, little has been done to elaborate specific guidelines.
Peru provides fertile ground to consider these issues. The Peruvian government has been widely lauded for the apparent success of its economic reforms, which have brought inflation under control, improved the balance of trade, and led to one of the fastest growing economies in the world. But, as discussed in the prior commentaries, Peru's economic recovery has come with a price, and it is not at all clear that it is sustainable (particularly given the heavy reliance on short-term and one-time benefits derived from non-renewable natural resources and the sale of state companies).
Peru's structural adjustment reforms and debt negotiations underscore two common violations of economic, social, and cultural rights.
The first violation relates to the lack of targeted programs aimed at the most vulnerable members of society. As the Committee has stated, "even in times of severe resource constraints caused by a process of adjustment the vulnerable members of society can and indeed must be protected by the adoption of relatively low-cost targeted programs." (General Comment 3). The Special Rapporteur on Economic, Social, and Cultural Rights and the Human Rights Commission have gone even further, declaring that "debt reduction should not take precedence over basic rights to food, shelter, clothing, employment, health services, and a healthy environment." (HRC Res. 1996/12).
The initial stage of Peru's structural adjustment program distinguished itself in two ways: first for its extremity in terms of both the pace and comprehensiveness of the reforms, extreme even according to the IMF; and second for the near complete absence of a safety net. The prior speakers described the effects of the so called "Fuji-shock," which overnight doubled the number of Peruvians living in poverty. Early in the adjustment process, the Pan American Health Organization recommended an investment of close to $ 3 billion to compensate for the dramatic deterioration in living conditions. The government instead promised to provide 0 million for a safety net in the first year of reforms (1990), but only spent million. In the second year, it promised 7 million, but only spent 2 million. These amounts were woefully inadequate to deal with the massive impoverishment and suffering caused by the reforms and represented a clear failure to provide for the most vulnerable sectors of society.
The second violation relates to the lack of procedural safeguards in the design and implementation of Peru's structural adjustment and debt rescheduling. The Committee has stated that "particular effort should be made to ensure that protection [of economic, social, and cultural rights] is, to the maximum extent possible, built-in to programs and policies designed to promote adjustment" (General Comment 2). According to the Limburg Principles, popular participation is required at all stages of the realization of economic, social, and cultural rights, "including the formulation, application, and review of national policies." (Principle 11) And the UN Declaration on the Right to Development in its first article states that "every human person and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural, and political development."
Structural adjustment and debt reduction are perhaps the most critical decisions facing developing countries in terms of the economic and social welfare of their populations. On average, developing countries devote more than twice as much to debt servicing as they do to health and education. Moreover, the structural adjustment accompanying debt repayment often undermines the ability of communities to participate in the decisions that affect their lives, as more and more control is placed into the distant and undemocratic hands of international financial institutions, multinational corporations, and global market forces. In Peru, for example, one of the IMF conditions prohibited the government from spending more than 1/12th of an estimated billion in earnings from the sale of certain state companies, on social programs, with the rest reserved for debt servicing.
Facing economic and social decisions of this magnitude, governments should be required to meet the following minimal standards as derived from the Covenant's obligation to ensure public participation and accountability:
- publicly acknowledge their obligations relating to economic, social, and cultural rights in the context of debt rescheduling and structural adjustment programs, so as to provide a framework for negotiations and accountability;
- undertake social and environmental impact studies prior to the enactment of any significant economic reforms (as mentioned in the Committee's General Comment 2);
- provide access to information about any significant reform package or rescheduling;
- ensure reasonable transparency in negotiations and decision-making;
- ensure reasonable participation in negotiations, which should include relevant NGOs, labor groups, and community representatives. Debt rescheduling may require a higher level of confidentiality, but even in those cases, at a minimum, ministries in charge of social programs and long-term planning should be included.
The Peruvian government has failed decisively and deliberately on all five of these criteria. Structural adjustment measures and debt rescheduling have fallen victim to President Fujimori's extremely autocratic style. The government has made no public mention of economic, social, and cultural rights as they relate to the reforms or servicing; has apparently done no social impact studies; has provided little or no access to information, often springing reforms on an unwitting public and Congress; and has greatly limited transparency and consultation in the negotiations, in which only the Ministry of Finance and the Central Bank have had any role. Notably, when the Congress tried to slow the pace of reforms, President Fujimori simply overthrew it, rather than engage in serious negotiations.
These exclusionary measures have no reasonable justification and constitute clear violations of the government's obligations under the Covenant.
I hope the Committee will raise these substantive and procedural issues with the government and will suggest measures to ensure greater transparency and participation in future decision-making. The Committee might also recommend steps to monitor the impacts of adjustment and to provide public accountability for any excesses. Additionally, the government ought to be questioned about the secrecy that surrounds the military budget and about how spending on the military compares to social programs.
Finally, I hope that the example set by Peru and the interest already expressed by Committee members will soon lead to a general comment on structural adjustment programs and foreign debt. Towards that end, the Committee might consider focusing on the procedural criteria that should be met by governments considering economic reforms and rescheduling. Transparency and participation are two of the most fundamental, and often overlooked, pieces of the Covenant, and are essential to any long-term programs aimed at ensuring economic, social, and cultural rights.