FACULTY OF BUSINESS SCIENCES

PROFESSIONAL SCHOOL OF ACCOUNTING

REPORT TITLE:

The Public Investment System in Peru and Argentina

AUTHOR:

Yman Añazco, Pedro Luis

ADVISER:

Mgtr. Viviana Lizbeth Rivera Rumiche

COURSE:

Public and Private Management Systems

PIURA – PERU

2023

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 INDEX
INTRODUCCION ............................................................................................... 3

DEVELOPMENT ................................................................................................ 4

CONCLUSIONS ................................................................................................. 5

REFERENCES ................................................................................................... 6

ANNEXES .......................................................................................................... 7

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INTRODUCCION

The public investment system is a fundamental tool for the development and
growth of countries. It refers to the decisions and actions taken by governments
to allocate financial resources to projects and programs that benefit society at
large. The main objective of public investment is to promote the economic and
social development of a country, through the construction and improvement of
infrastructures, the promotion of education, health, scientific research, among
others.

In this system, governments are responsible for identifying and prioritizing the
needs of society and allocating the economic resources necessary to meet them.
To do this, it is necessary to carry out a strategic planning process, which makes
it possible to determine which investments are most necessary and how they
should be made.

The public investment system involves a set of stages ranging from the
identification of projects to their implementation and evaluation. In the
identification stage, the needs are analysed and the most relevant projects are
established. At the formulation stage, feasibility is determined and a detailed plan
is developed. In the implementation stage, the physical and financial execution
of the project is carried out. And finally, in the evaluation stage, the impact and
the results obtained are analyzed.

This system is of vital importance for a country's economic growth, as it promotes

investment in key sectors such as infrastructure, education and research, which
in turn generate employment, improve the quality of life of the population and
boost productivity.

However, it should be noted that for the public investment system to be effective,
it is essential to have transparent, efficient management and adequate control
mechanisms. In this way, it is ensured that resources are allocated effectively
and the expected results are obtained.

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Thepublic investment system is a key tool for the development and growth of
countries. Its correct implementation improves the quality of life of the population,
promotes sustainable development and strengthens a country's economy.

DEVELOPMENT

The public investment system in Peru and Argentina is fundamental for the
economic and social development of both countries. An extensive analysis of how
this system works in each of them will be carried out below:

In Peru:

In Peru, the public investment system is governed by the State Procurement Law
and the Public Sector Budget Law. The National Public Investment System
(SNIP) in Peru is responsible for regulating and supervising the public investment
process in the country. It was created with the aim of ensuring efficiency,
transparency and quality in the execution of public investment projects.

According to the Ministry of Economy and Finance (2023), it mentions that Public
Investment closed 2022 with a record execution figure of S/46,592 million, 72%
of the total budget. The execution of public investment from January to December
2022 reached S/ 46,592 million, a new record figure that exceeds by 20% the
same period of 2021 (last historical mark of S/ 38,785 million). Likewise, the
public investment executed represents 72% of the Modified Institutional Budget
(PIM), the highest percentage in the last 5 years. This is all the more
commendable if we consider that the public investment budget for 2022 was the
highest of all years. Regarding the evolution of the execution of public investment
during 2022, there is a sustained quarterly growth from the second quarter to the
end of the year, reaching in December the highest monthly execution peak of S/
8,769 million, which represents a growth of 25% compared to the same month of
2021. At a disaggregated level, the National Government ends the year with an
execution of 91% of the PIM, confirming that the executing units at this level
executed almost the total of their allocated budget; In turn, regional governments
close 2022 executing 63% and local governments 67% of their total budget
programmed for public investment.

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In Argentina:

In Argentina, the national public investment system is governed by the Law on

Financial Administration and Control Systems of the National Public Sector. This
system aims to promote efficient and transparent management of resources
allocated to public investment.

According to the newspaper América Economía (2022), it mentions that Public

Investment in Argentina increased 275% in 2021 and reached its highest level in
five years, It amounted to US$ 10,500 million, with a nominal increase of 275%
and 148.5% in real terms, while reaching its highest level in the last five years,
with a 2.4% share of the Gross Domestic Product, according to a report prepared
by the Congressional Budget Office. The growth of public investment, as well as
its geographical distribution throughout the country, was highlighted by the
president of the Argentine Chamber of Construction (Camarco), Gustavo Weiss,
who pointed out the "clear and frank intention of the Government" to prioritize it.

CONCLUSIONS

The SNIP seeks to ensure that public investment projects are efficient,
sustainable and contribute to the economic and social development of the
country. In addition, it promotes transparency, citizen participation and
accountability in the public investment process.

In conclusion, the public investment system is essential in Peru and Argentina to

promote development, generate employment, improve the quality of life of the
population, increase competitiveness and reduce inequalities. Therefore, it is
essential that the governments of both countries promote public policies that
encourage investment and ensure the correct allocation of public resources.

In both Peru and Argentina, public investment is carried out through a rigorous
process that seeks to ensure efficiency and effectiveness in the use of public
resources. This includes conducting feasibility studies, environmental and social
impact assessments, as well as supervising and monitoring the implementation
of projects.

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REFERENCES

América Economía, (2022). Public investment in Argentina increased 275% in

2021 and reached its highest level in five years.
https://www.americaeconomia.com/economia-mercados/finanzas/inversion-
publica-en-argentina-aumento-275-en-2021-y-alcanzo-su-nivel-mas

Ministry of Economy and Finance, (2023). Public investment closed 2022 with a
record execution figure of S/ 46,592 million, 72% of the total budget.
https://www.gob.pe/institucion/mef/noticias/684635-la-inversion-publica-cerro-
el-2022-con-una-cifra-record-en-ejecucion-de-s-46-592-millones-el-72-del-
presupuesto-total?s=09

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ANNEXES

Source: Public and Private Investment in Peru

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