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USAID Information:
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Peru
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Education |
527-006 |
2,624 |
2,475 |
4,000 |
| Peru-Ecuador Border Region Development |
527-008 |
1,988 |
1,488 |
2,000 |
| Democractic Strengthening |
527-009 |
9,385 |
9,235 |
9,732 |
| Economic Growth |
527-010 |
5,170 |
2,935 |
6,358 |
| Health |
527-011 |
17,582 |
13,756 |
11,950 |
| Environment and Natural Resources |
527-012 |
4,060 |
4,549 |
3,264 |
| Alternative Development |
527-013 |
49,705 |
53,866 |
43,000 |
| PL 480 Title II |
|
23,868 |
121921 |
13,245 |
| Total (in thousands of dollars) |
114,382 |
101,225 |
93,549 |
|
The Development Challenge: Throughout the 1990s, Peru made significant progress combating terrorism, reducing the production of coca, stabilizing its economy, and increasing access to social services. Since 2001, under President Toledo, the Government of Peru (GOP) has pursued an ambitious program to re-establish democracy, following a decade of increasingly authoritarian rule and rampant corruption under the former Fujimori government, and is promoting a market-based economy that will benefit all citizens. While Peru has maintained unprecedented economic performance averaging over 4% growth for the past three years, the reality is that even higher growth rates for many years will be necessary to reduce poverty, which impacts over half of the population or 14 million Peruvians.
The limited state presence in large portions of the country's interior challenges the Government's ability to ensure broad-based development for all Peruvians. Per capita gross domestic product (GDP) of approximately $2,150 for 2003 is the same in real terms as it was in 1967, a result of years of flawed economic policies. Income remains unevenly distributed, with over 50 percent of the population living below the poverty line, almost half of whom live in extreme poverty. The country's total debt servicing requirement is estimated at 29.5% of exports in 2005. Unemployment and underemployment rates remain very high (approximately 10% and 50%, respectively). Social services, especially in isolated, conflict-prone regions in Peru's highlands and jungles, are inadequate. For example, in USAID's geographic focus areas, 36% of children under five years old are malnourished, 31% of women are illiterate, 39% of the population do not have access to electricity, and 69% do not have access to acceptable sanitation services. Peru's tropical forests are the fourth largest in the world, but they are increasingly threatened by shifting migration patterns, unsustainable exploitation of the forest, and the destructive impact of illicit coca production and processing. The lack of state presence allows drug trafficking, illegal logging, terrorism and other criminal practices to flourish, creating a corrupt, violent and conflictive environment that discourages investment, limits economic opportunities, and prevents sustainable economic growth and development.
While Peru's 2003 economy outperformed most of Latin America (Peru experienced 3.8% GDP growth in 2003 with 4.5% projected in 2004), the government remains politically weak and social discontent prevails. To move forward, Peru must accelerate structural economic reforms, take full advantage of the recent extension and expansion of tariff-free entry of Peruvian products to the U.S. market under the Andean Trade Promotion and Drug Eradication Act (APTDEA), complete negotiations of a free trade agreement with the United States, and conclude trade agreements in the Latin America and Caribbean (LAC) region and with Asia to stimulate economic growth and reduce poverty levels. Likewise, Peru's mandates are many. It must move forward with its efforts to bolster democratic institutions and increase citizen confidence. It must successfully complete its decentralization process to facilitate more representative and effective governance throughout the country. The justice system must continued to be reformed to ensure predictable and equitable application of criminal and commercial law. The government must increase its investment in critical infrastructure and services as well as comprehensively restructure its institutions to reduce corruption, control government expenses, and provide appropriate and effective services.
In the Toledo Government, the U.S. Government has a partner that is committed to advancing the mutual national interests of building the infrastructure of democracy, promoting sustainable development, and defeating narco-terrorism. U.S. assistance can play a decisive role in addressing the obstacles of corruption and conflict where there is a lack of state presence and of economic competitiveness.
The USAID Program: USAID works as an integral part of the U.S. Country Team in Peru and collaborates with Peruvian partners, other donors, nongovernmental organizations, and the private sector to help Peru achieve a secure, democratic, and prosperous future for its citizens. USAID's overarching goal in Peru is to facilitate both Peru's international and internal integration, thereby contributing to the mutual U.S. and Peruvian goals of good governance, security, and prosperity. Expanded commerce will further integrate Peru into the world economy and enhance cross-border relations, helping to improve living standards and reduce the potential for conflict. Within Peru, effective regional and local governments, along with improved economic infrastructure and social service delivery, will increase national integration, reducing the potential for conflict associated with the marginalization of certain geographic areas and social groups.
USAID will use FY 2005 and FY 2006 funding to provide: national-level assistance related to policy reform and institutional strengthening; and health, education, environment, infrastructure, business development, and governance activities in geographic areas that have been prone to conflict, and thus present obstacles to investment, economic growth and employment generation. These areas include the Peru-Ecuador border region, where USAID efforts will help ensure a lasting peace between the two countries; and the seven regions that include Peru's major coca-growing valleys, where USAID and other U.S. agencies work to combat the flow of illicit narcotics to the United States and other markets. USAID works to ensure that these areas are no longer a breeding ground for crime, terrorism, and social unrest.
Other Program Elements: A range of USAID centrally funded activities are implemented in Peru. In the democracy area, centrally-funded programs strengthen regional mechanisms to promote human rights and improve Peru's tracking of political party financing. In the health sector, USAID's Washington-based activities support programs that address maternal and child care, nutrition, and HIV. During the past year, the Capable Partners Program (CAP) has supported the institutional strengthening of the National Environment Society, an umbrella organization representing environmental networks and non-governmental organizations in Peru. Central funds also support credit and small business development programs, as well as activities to alleviate the effects of poverty on women and children.
Under the South America Regional Program, USAID also manages four programs that involve Peru: the Andean Region Trade Capacity Building program, which enhances capacity of Peru, Ecuador, Colombia and possibly Bolivia to negotiate a Free Trade Agreement (FTA) and strengthens national capacity to implement the rules of trade emerging from FTA negotiations; the Centers of Excellence for Teachers Training (CETT) in the Andean region, to improve the quality of reading instruction in disadvantaged communities; the Amazon Malaria Initiative (AMI) to address the threat of malaria in Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela; and the South America Infectious Diseases Initiative to strengthen the capacity of Peru, Bolivia, Ecuador and Paraguay in infectious disease surveillance and antimicrobial resistance. Results of and plans for these South American programs are reported separately.
USAID's program in Peru includes activities that contribute to eight U.S. Presidential Initiatives: Anti-Illegal Logging, Global Climate Change, Digital Freedom, Water for the Poor, Clean Energy, Center for Excellence in Teacher Training, Last Mile Initiative, and HIV/AIDS.
Other Donors: Official international technical cooperation to Peru for 2004 was over $506 million, including both bilateral and multilateral assistance. The United States is the largest bilateral donor and contributes almost 40% of all bilateral assistance. Other bilateral donors include: Germany (in democracy, environment, education and health, economic growth and water and sanitation); Canada (in economic growth, education, health, environment, natural resources management, water and sanitation, and democracy); Switzerland (in economic growth, natural resources and democracy); the United Kingdom (in democracy, economic growth and health); and Spain (in democracy, education and health). The largest multilateral donor, the Inter-American Development Bank, provides almost 86% of all multilateral assistance. Other multilateral donors include the United Nations, the World Bank, the Andean Development Corporation, and the European Community. Absent an effective mechanism within the Government of Peru or donor community to broadly coordinate efforts, donors have relied on sectoral-level working groups to share information, conduct analysis, and collaborate on program design/implementation. Focus areas of these working groups include gender, basic education, governance/decentralization/justice, counternarcotics, health, environment, and nutrition.
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