Financial Crime World

Corruption Plagues Peru’s Financial Sector, Deepening Crisis in Public Health

As the world grapples with the devastating consequences of the COVID-19 pandemic, Latin America has been one of the regions most severely impacted. In Peru, where the healthcare system was already struggling due to inadequate infrastructure and equipment, corruption played a significant role in exacerbating the crisis.

The Consequences of Corruption

Despite efforts by the government to approve fast-track purchases and other measures, families were left desperate for ICU beds, medicine, and oxygen. Experts pointed to structural and institutional causes as key factors explaining why the region was so strongly impacted.

The Impact on Public Health

  • Globally, billions of dollars in public health expenditures are lost each year due to corruption, with serious consequences for access, quality, efficiency, and effectiveness of health services.
  • In Peru, dozens of hospital construction projects are currently paralyzed due to corruption investigations.
  • The collapse of Peru’s healthcare system is particularly concerning, given that dozens of hospital construction projects are currently paralyzed due to corruption investigations.

Examples of Corruption in Hospital Construction Projects

  • The Antonio Lorena Hospital in Cusco began construction in April 2013 and was expected to be completed in October 2014. However, as of 2020, it was only 64% finished due to corruption involving Brazilian construction companies linked to Lava Jato, which resulted in a $3.6 million bribe.
  • The Pedro Sánchez Meza Hospital in Junin, valued at over $18.6 million and promised by the previous regional governor in 2019, remains only 5% complete as of 2021, with companies linked to corruption cases winning bids for its construction.

Solutions to Combat Corruption

  • Strengthen Peru’s beneficial ownership registry to facilitate transparency.
  • Use technology as a tool to monitor social services and financial information.
  • Incorporate mechanisms for monitoring, control, and detection of misuse of public resources and promote inter-institutional collaboration.
  • Explore alternative measures to address stalled projects tainted by corruption, rather than simply voiding contracts.

Conclusion

Corruption is devastating for the development of public health, claiming thousands of lives that could have been saved had it not been for abandoned and unfinished hospitals. Peru must invest in prevention, fiscalization, and transparency technologies while addressing stalled projects to be better prepared for future crises.