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Risks of merging regulators in Peru warned

Alertan sobre riesgos de fusionar reguladores en Perú

Peru. In relation to the statements of Gustavo Adrianzén, President of the Council of Ministers, in which he reiterates the proposal to create a new Multisectoral Regulator by merging the current regulatory bodies, OSITRAN, SUNASS, OSIPTEL and OSINERGMIN, the four aforementioned entities made the following clarifications:

The proposal to merge the regulatory bodies is born from a contradictory request from the Executive Branch, which initially proposes a delegation of powers to create coordination mechanisms between the regulatory bodies and has finally ended up proposing the union of them, without the corresponding study having been presented and disseminated to support this proposal.
The four regulatory bodies carry out work with a high level of specialization in very dissimilar economic sectors such as: transport infrastructure, sanitation services, telecommunications, energy and mining; in favor of the population using these services.
An eventual merger, without further analysis, into a single large regulatory body can cause serious damage to the national economy caused by the lack of specialization and a negative signal for investors, even more so at a time when the country needs, more than ever, legal and economic predictability, both aspects of utmost importance observed by economic agents before making an investment in the country.
The merger would imply the risk that regulatory decisions lose their technical specialization, because they are more prone to high political influence. This could lead to scenarios such as the establishment of arbitrary rates, which not only affects the well-being of consumers, but also the incentives to continue operating or investing in closing gaps with quality services.
Indeed, the origin of our model is more than 30 years old, but regulators have evolved since our creation. Thus, in the permanent search for continuous improvement, we have been working to become world-class regulatory bodies, for which we have undergone evaluations by the Organization for Economic Cooperation and Development (OECD), thus contributing to Peru's efforts to achieve its accession to this international organization.
The OECD, in several documents and presentations, as well as in its own evaluation of each of the regulators, has highlighted the important role that these entities have in the economic development of our country, highlighting the benefits of their technical specialty. So it is not true that the OECD has issued any recommendation for Peru that implies unification.
The Constitutional Court of Peru has also ruled on several occasions on the important work carried out by regulatory bodies, highlighting their role in providing the necessary regulatory framework to promote new investments, the entry of new operators and higher levels of well-being for users of the public services under their supervision.
Over the years, it is not the first time that the Executive Branch proposes the unification of regulatory bodies, but always after a careful analysis it was determined that such a decision was not adequate for the purposes pursued by the State.
Precisely, the autonomy of regulatory bodies and their specialized technical nature is a guarantee to avoid political interference or interest groups, since their policies are oriented to the search for a balance in the market and the common good.
We believe that a measure with such important economic effects for our country should be the result of a technical debate and public analysis that supports it, in this sense it is striking that the prior opinion of the regulatory bodies that have more than 30 years of specialization in the issues of their competence has not been required.

Finally, the four regulatory bodies pointed out that "we believe that there will always be room for the implementation of improvements and institutional strengthening in State agencies, but it is important that these entities maintain autonomy, independence and specialty, in order to guarantee that their actions and decisions are not subject to pressure from different actors with particular interests and political interference."

Richard Santa, RAVT
Author: Richard Santa, RAVT
Editor
Periodista de la Universidad de Antioquia (2009), con experiencia en temas sobre tecnología y economía. Editor de las revistas TVyVideo+Radio y AVI Latinoamérica. Coordinador académico de IntegraTec y LiveTec.

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