The socialist government of President Pedro Castillo in Peru, as promised during the election campaign, has committed itself to fighting inequalities and bringing about the much needed social changes in the Latin American country. Recently, the head of state took a step forward in that direction. On December 14, President Castillo presented an energy bill to Congress, which seeks to modify the Electric Social Compensation Fund (FOSE) in order to provide the most vulnerable families with a discount of up to 15% on their monthly electricity bills.
In a series of tweets, President Castillo informed that the measure would benefit over 21 million consumers. He added that it would not entail any cost to the nation’s public treasury. He requested the legislators to approve this initiative as quickly as possible, stressing that “the economic situation that many families are going through requires urgent and fair actions.”
The Ministry of Energy and Mines (MINEM) reported that the bill proposes that subsidies on electricity consumption be extended to users who consume up to 140 kWh per month. Currently, only those who consume up to 100 kWh per month are entitled to subsidies. There are currently 4.8 million consumers benefiting from the FOSE.
According to MINEM, the monthly subsidy requirement of the FOSE would reach 39.2 million soles (over 9.7 million USD), which would be financed with 20.3 million soles (over 5 million USD) from residential users of the National Electric Interconnected System (SEIN) with consumption greater than 140 kWh per month and 18.9 million soles (around 4.7 million USD) from commercial users and industries. Currently, the FOSE collects approximately 30 million soles.
Earlier this year, on October 3, President Castillo presented an agrarian reform in a bid to help the poorest farmers in the country. He clarified that the reform “does not seek to expropriate land or affect property rights of anyone,” but “to end the exploitation and inequality” over farmers. He emphasized that the reform will allow the State to reach farmers with means of communication and contribute to the development of agriculture through the incorporation of technology, the provision of technical advice, and the construction of productive infrastructure. It’s Peru’s second major reform of the agricultural sector. The first took place five decades ago, in 1969, during the left-wing government of President Juan Velasco Alvarado (1968-1975).
Meanwhile, the ruling Free Peru party has initiated the process to collect citizens’ signatures to hold a referendum to demand the drafting of a new constitution and a constituent assembly to write it. The progressive government promised to change the current free-market friendly constitution, written and imposed during Alberto Fujimori’s dictatorship (1999-2000), which many argue enshrines the neoliberal order and deepens inequality in the country.