Uproar over President Garcia signing off on pay hikes for Cabinet ministers

With the world economic crisis lapping at Peru’s doorstep, Peru President Alan Garcia caused an uproar by signing Emergency Decree N° 001-2009 late Sunday night, authorizing the Finance Ministry to increase ministers’ salaries by 46 percent to earn as much as members of Congress.

“It was (Garcia’s) initiative,” said Environment Minister Antonio Brack, “because truly being a minister is being dedicated to your job 24 hours per day. It’s impossible to have any other additional income, which gives us a great disadvantage compared to other public service employees.”

According to daily El Comercio, a minister’s monthly paycheck will increase from 15,600 to 22,800 soles, or approximately $28,800 more per year, upping their annual salaries to $91,200.

When President Alan Garcia was elected in 2006, he immediately slashed wages by approximately 40 percent in Congress, and reduced wages of all public service employees, on the grounds that they were earning first world wages in a developing world nation. Emergency Decree Nº 019-2006 slashed Garcia’s own monthly salary from 42,921 soles ($14,300) to 16,000 soles ($5,300) and ministers’ and legislators’ pay from 26,800 soles ($8,933) to 15,600 soles ($5,200).

In October, in a move that was initially criticized, Congress voted 61-17 to incorporate the allocation for expenses into their monthly paycheck. Though the allocation did not become part of a lawmaker’s salary per se, as it is not included in pension and health insurance benefit contributions, it brought their net salary to about 23,217 soles, or approximately $7,740 — well above a minister’s salary.

The wage increase will ensure that competent ministers don’t leave the cabinet, said Brack.

“We ministers didn’t ask for the wage increase,” he added, “but there have been comments about ministers who are very tight for money… who were offered attractive jobs where they could earn double or triple (what they were earning as ministers).”

Back in the 1990s, after then President Alberto Fujimori substantially increased public employees’ wages, he was able to bring back to Peru young Peruvian lawyers and business graduates who had preferred high level jobs abroad instead of low-paying jobs in Peru’s public sector. When Garcia drastically slashed wages, it sparked an exodus of professionals from the government payroll, once again in favor of the private sector.

Opposition Congressman Isaac Mekler, a member of the Peruvian Nationalist Party, called Garcia’s move “an insult to Peru’s poor.”

“It is ironic that while a worker joins protest marches, strikes and work stoppages, with people dying even,  for a salary increase of a few soles, the ministers, by a simple stroke of a pen, get a raise of more than 7,000 soles,” former Congressman Heriberto Benítez told daily La Primera.

Brack contended that the salary hike will not affect his sector’s budget, nor the government’s general budget for 2009.

“We’re going to save by consuming less water, energy and paper,” said Brack in comments to state news agency Andina. “But this doesn’t mean that we’re going to cut budgets for social programs, the anti-crisis plan or any other program.”

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