- Increase access to and quality of social services for the poor
Significant advances have been made in this pillar, particularly in areas associated with safety networks, education and basic health, as well as justice administration services. Coverage of safety network programs, such as the conditional cash transfer program Juntos, increased from 700 to 900 districts and now includes the poorest districts in the country. While Peru experienced a slight increase in total malnutrition rates in rural areas, results in the regions where the World Bank is working with the government (Amazonas, Cajamarca and Huánuco) improved during 2012-2013 (29% to 27%).
In education, the World Bank supported the implementation of an evaluation system based on students’ learning, teaching internships and school leadership in basic education (kindergarten through Grade 11). The IFC supported the construction of a new 140-bed hospital in Lima, which can serve over 580,000 patients annually. Additionally, the Bank supported the creation and development of a new enterprise to operate across market segments in technical training, university education and basic education (K-11).
Access of the poor to justice administration services has also improved through the establishment of legal aid centers in densely populated peri-urban districts, which in turn drove the increase in the number of consultations, from 100,000 in 2011 to 149,000 in 2014.
- Connecting the poor to services and markets
Government efforts to connect the poor to services and markets are contributing to increasing income and improving basic service quality in target areas. However, challenges remain for achieving greater impact. The coverage and quality of water and sanitation services has improved in both urban and rural areas, as evidenced by the increase in daily hours of water service, from 16 in 2011 to 19.2 in 2013 in Lima, as well as by the decrease in the incidence of blocked sewer lines.
Transport programs have significantly improved access to markets and services. The Decentralized Rural Transport Program rehabilitated 3,277 kilometers of rural roads, which has reduced travel time to schools. This in turn has led to a 19.2% increase in school enrolment rates among children aged 12 to 18. The private sector has also played a key role in expanding transport infrastructure in recent years.
The IFC has actively supported the development of infrastructure to facilitate access to markets, including: the modernization and expansion of the Port of Callao, which has increased its annual capacity to 1.2 million 20-foot-equivalent units; the construction and operation of two power lines in the highlands of central Peru and in the northeastern Amazon region, with an expected capacity of 220 kV and 138 kV, respectively; the expansion of the international airport in Lima; and in Arequipa Region, the rehabilitation of a major road and the development of a 168 MW run-of-the-river hydroelectric power plant, which will generate an average of 838 GWh annually.
The government incorporated a rural electrification model implemented in a Bank-financed project for the continued development of the sector. This model uses distribution firms to develop, build and co-finance rural electrification sub-projects. The IFC investment through the Cheves hydroelectric power plant has also contributed to increasing the country’s power supply.
Finally, thanks to a US$300 million loan approved in September 2015, the Line 2 Project of the Lima Metro will drastically reduce travel times in Lima by providing a new transport system that will alleviate city traffic and pollution.
- Sustainable growth and productivity
The WBG’s program contributed to increasing productivity in rural areas of the country. The Bank has been working to increase assets and improve economic conditions of rural families. The first phase of the Development of the Rural Highlands Project supported approximately 35,000 families (nearly 10% of rural families) to increase the net value of their domestic production by 42% in selected areas of Apurímac, Ayacucho, Huancavelica, Junín, Huánuco and Pasco. With respect to financial aspects of rural development, the IFC has been supporting four microfinance institutions to expand their client base in rural areas and has also helped to promote better practices in irrigation and the agricultural export industry.
The WBG program also has contributed to improving access to and quality of financial services for small and medium-sized enterprises. The IFC financed numerous projects to support insurance services and the expansion of the microfinance portfolio in the private sector to increase bank penetration, including in rural areas, as well as access to financial services to underserved microenterprises in Peru. The combined microfinance operations of the IFC benefited more than 700,000 microentrepreneurs in rural areas. In the past two years, the World Bank has been working intensively to develop different financial inclusion projects requested by the Central Bank and the Banking Regulatory Agency.
The WBG program has worked with the Ministry of Education and the private sector to strengthen higher education services. The IFC has been collaborating with the private sector to improve the quality of university education and vocational training services in Peru, with new investments in infrastructure for these sectors. This includes the building of two new university campuses in Lima, which are expected to serve more than 50,000 students.
Initiatives such as the Project to Strengthen the Sustainable Management of the Guano Islands, Isles and Capes National Reserve System as well as the Dedicated Mechanism for Indigenous People and Saweto Local Communities, which have received grants from the Global Environmental Facility (GEF) and the Strategic Climate Fund, support agricultural innovation, biodiversity and the sustainable management of ecosystems, which are a valuable environmental heritage and a source of income for thousands of families living along the Peruvian coast and in the Amazon region.
- Inclusive governance and performance of the public administration
Support from the WBG has focused on strengthening fiscal management and public investments at the national and local levels. Initial results have been encouraging. The IFC’s advisory plan has helped improve the capacity of 30 municipalities to invest mining royalties. As a result, 80% of the municipalities improved their investment management rating by 20% and the remainder by 15%, as compared with their initial rating. The WBG has also been working with the Ministry of the Economy and Finance to define a strategy for analyzing the sub-national investment cycle and making recommendations to reduce obstacles and transnational costs, with a view to improving the efficiency of public investments.
The Catastrophic Risk Deferred Drawdown Option (DDO) has also helped Peru reduce fiscal vulnerabilities in light of the frequent natural disasters affecting the country. Moreover, the WBG is conducting an evaluation for the government in an effort to reduce the vulnerability of public schools throughout the country in the case of earthquakes and to develop a school infrastructure plan that guarantees adequate construction, operational and maintenance procedures. At the sub-national level, the recently approved Cusco Development Project is designing an early warning system to respond to natural disasters in Cusco Region.
Studies and evaluations
The World Bank carried out a series of studies, assessments and systematizations, including: the framework of relations with indigenous peoples for the regional transport support project; a feasibility study of the environmental management plan; and a report on the social impact of the water and sanitation optimization project on Lima properties. Publications include: “Promoción de la escala y la densidad de las redes de agentes en Peru” (Promotion of scaling up and density of the network of agents in Peru); and “12 cosas que quizá no sabe sobre el Banco Mundial en el Perú” (12 things you may not know about the World Bank in Peru).
In early 2015, the World Bank led the discussion on different aspects of economic development in Peru. To this end, it brought together several international experts who participated in events organized by the Bank. These included the presentation of the 2015 World Development Report: Mind, Society and Behavior; the international conference “Towards International OECD Standards: Experiences for Peru”; the event “Southern Countries: New Owners of the Global Economy?”; the Conference “Financial Inclusion: International Experience and the Peruvian Strategy”; the international conference “Promoting Growth through Effective Policies”; and the 2015 International Forum on Sustainable Finance.
Last Updated: Sep 29, 2015