The sad reason the Odebrecht scandal is so big in Peru

PPK is likely out as President of Peru very soon, due to fallout from the Odebrecht scandal. That’s quite a stunning turn of events in that most observers probably had PPK pegged as the least corrupt president of Peru in a very very long time – which may still prove to be accurate regardless.

The sad, scary reason why the Odebrecht scandal is probably bigger in Peru than anywhere else, except maybe Brazil, the home of Odebrecht?

Because Peru was happy to have Odebrecht.

Odebrecht built useless roads to nowhere in pristine jungle, gas pipelines through mountains where many people still have no running water or electricity, and Lord knows what other mega-dog projects because Peru wanted them to. The Odebrecht style mega projects serve to obfuscate the fact there is no investment in local communities, no local expertise in areas like engineering or organizational behavior, nor promotion of a strong local business community that might eventually generate such talent and expertise as is needed in a modern society. The level of bureaucracy and incompetence is so bad in Peru that things simply don’t get done. Basic infrastructure, education, security, science, you name it – it doesn’t get done. So Peru was happy to have Odebrecht come in and do something, anything, corrupt or not.

While other large multi-national construction companies decided to sit out Peru for fear of corruption and local expertise is not available, Odebrecht was the only thing left and Peru was happy to have them. Were it not for Odebrecht’s conviction in the US, Odebrecht would still be in Peru and Peru would still be happy to have them here.

Update 12/16: Judging by local media PPK is now more likely to stay on as President of Peru for the foreseeable future than even 24 hours ago. Anything can still happen but although PPK appears to have lost personal support in his inner circle, the Lima establishment knows full well if PPK leaves it essentially means ushering in the next era of Fujimorismo, which is not a choice of the establishment. There are more and more calls for due process and some commentators are even calling the current political crisis an Odebrecht/Fujimori coup d’etat. So as much as the establishment and even his own inner circle has soured on PPK, they are even less excited about the alternatives.

FWIW my rant before the last elections that a Keiko Fujimori presidency is not good for Peru at this time.

One thought on “The sad reason the Odebrecht scandal is so big in Peru

  1. I think one of the biggest difficulties that Peru has when it it comes to any government projects it the fact that the politicians have too much power in the decision process. Once someone gets into office, they are all about providing jobs for their family, friends, and supporters. A blind bidding process for any government jobs would help to not only greatly reduce this practice, but would also lower the cost of many of the projects.

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