Today, this picture has dramatically changed. The power of unions has eroded and labor leaders are
virtually absent from national politics. This is due in part to economic and labor market changes and in
part to politics. Unions were hit hard by the recession and crisis of the 1980s as well as by economic
stabilization efforts and state reform in the 1990s. Membership dropped from a high of over 17% of the
labor force in 1981 1982 to approximately 7% today, as an estimated 40 to 50% of the work force is
presently in the informal sector.
Yet although unions have always grouped a minority of the Peruvian workforce, in previous eras they
commanded public respect and were able to convene other sectors of civil society around shared
platforms defending human rights, democracy, and social justice as well as specific sectoral interests.
Over the course of the 1980s, however, the extreme politicization and division of union leadership
debilitated the broader representative capacity of organized labor, while the international crisis of
communism contributed to the loss of power and resources for the CGTP, whose leadership had close
ties to the Moscow led Communist Party. For the most part, public opinion regarding union leaders met
the same fate as that of party leaders at the end of the decade: they were seen as politically opportunist
and/or self interested.
The erosion of union power received a major blow with the dismantling of a wide array of labor rights
and benefits that was part of the broader economic reform agenda of the Fujimori government. The
Ministry of Labor no longer plays a significant role in resolving disputes between private employers and
workers, nor does it encourage union development. Although basic rights to unionization, a minimum
wage, safe working conditions, and health and pension benefits all still guaranteed in the Constitution, as
well as protection against job discrimination on the basis of sex, race, ethnicity age or other factors, these
rights are routinely violated in the private sector and not upheld by the Labor Ministry, the Judiciary, or
Indecopi. Most human rights organizations have also not given priority to defending labor rights, which
remain controversial in a context of high unemployment.
While unions have lost most of their power in recent years, the power and presence of business
have increased significantly. The opening of markets and privatization of public
enterprise brought increased vigor to certain sectors of private business as well as reviving the flow of
international investment. The Fujimori government has been strongly pro business, and business leaders
have played a prominent role in the Cabinet, in key economic policymaking posts, and among the pro
government forces in Congress.
The Confederation of Peruvian Business Institutions (CONFIEP), the umbrella organization of all major
or sectoral associations, maintained a relatively low profile throughout the 1980s. After 1987, it
became the voice of the private sector and a vigorous defender of private property rights in general.
With support from USAID, the World Bank, and other donors, CONFIEP has professionalized its
operations and significantly expanded its role in society. Other powerful gremios include the National
Society of Mining and Petroleum, the Association of Exporters (ADEX), and the National Industrialist's
Along with increased private fortunes and political clout among business leaders came increased public
expectations that the corporate sector would be more socially responsible, investing greater time and
resources in the resolution of the country s many social problems. CONFIEP, and new business
leadership organizations such as Peru 2021, have taken up the banner of social responsibility and have
supported a number of philanthropic and community development activities, as well as promoting
microenterprise development. However, the majority of this activity has been funded by international
donors and lenders, rather than through direct contributions from national business. Corporate
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