In his annual state-of-the-nation address, commemorating Peruvian independence, President Ollanta Humala announced a slight boost in public spending in order to increase economic growth. The Humala administration believes that the economic stimulation package will provide an additional US$2.3 billion into the economy. The Peruvian government predicts the economic recovery plan will enhance economic growth by 1.5 to three percentage points in two or three years.
“These recently approved measure, represent an addition injection of $2.3 billion which accounts for more than 1% of total Gross Domestic Product (GDP).” Humala stated.
Some parts of the stimulus decree, have received harsh criticism from international environmental organizations. In a letter issued by the United Nations Peruvian office to the Chancellor, warned that the economic measures may undermine environmental regulation efforts.
Under the law transnational companies will only be subject to pay 35% of any fines imposed on them for environmental and labor violations.
Despite having campaigned on environmental issues, Humala has approved several controversial energy extraction projects. However, the government has authorized over a dozen projects without prior consultation of the communities in which the projects are located.
Since becoming elected, Humala has made two separate cabinet changes due to conflict surrounding a major gold mine project .
Peru will host the upcoming 20th session of the Conference of the Parties (COP 20) to the United Nations Framework Convention on Climate Change, scheduled to take place in Lima, Peru, in December 2014.