When World Bank President Jim Yong Kim sets foot in Peru for his first stop in a 3-country visit, he will find a country in the big leagues of emerging economies, with sound levels of growth and its economic house in order.
Peru has made big strides in the fight against poverty in the past five years, thanks to positive economic indicators and sound fiscal policies. But the country still faces many challenges.
With growth estimated at around 6%, it is currently one of the most dynamic economies in Latin America, ranking eighth out of the 10 fastest growing economies in the world.
This bonanza, driven by a boom in primary materials has led to reductions in poverty from 50% half-way during the last decade to 26% in 2012. This translates to 7 million Peruvians who are no longer poor. But inequality persists. The poverty gap between the country’s rural and urban areas remains wide: 17% compared to 53%, particularly in the regions of Ayacucho, Cajamarca and Apurimac.
This is the Peru that President Kim will find during his Latin American visit from June 29-July 7, which will also take him to Chile and Bolivia.
“Striving for shared growth isn’t just the right thing to do from a social and political perspective; it’s an economic imperative,” Kim said.
While economic growth is essential for the country’s development, it is not enough to eradicate poverty and inequality. According to experts, Peru needs to increase and improve infrastructure and social services, particularly in areas where the most vulnerable live. Water and sanitation, education, transportation, electricity and health services are all critical for achieving the continued well-being of citizens.
“Leaders must improve their ability to deliver services to the poor. Without improved capacity for quality delivery, even the best policies will mean little to their intended beneficiaries,” Kim noted.
He added that the Bank will provide support in this area, by helping Latin American governments take a more scientific, evidence-based approach to the delivery of development services.