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| >> Regional Overview >> Peru Overview | |||||||||||||||||||||
IntroductionPeru's political and economic development in the new century presents a unique set of opportunities and challenges to further U.S. interests in a major country of the Latin America region. USAID/Peru's strategic plan is fully supportive of U.S. strategic goals of increasing adherence to democratic practices and human rights, reducing illicit drug production, promoting regional stability, and increasing global economic growth. USAID program support also aims to increase opportunities for the poor; improve the health of Peruvians at high risk; strengthen environmental management; expand opportunities for girls' quality basic education; and further implementation of the Peru-Ecuador Peace Accords by improving the quality of life of Peruvians along the border. USAID's top priority of strengthening Peru's democratic processes and institutions is central to its success in social development and economic growth. Development ChallengeThe global financial crisis combined with a turbulent political situation has put to test a decade of social and economic accomplishments. In the last two years, the gross domestic product (GDP) grew at a mere 1.5% on average annually as compared to 7% average annual growth in the early 1990s. The past year has witnessed a drying up of international credit, a tightening of local lending standards, an increasing of public external debt, a slowing down of debt reduction, and a growing population of poor people. Politically, the 2000 elections were very controversial, and were followed by President Fujimori's call for new elections and his subsequent resignation. However, with the stated commitment of the transition Government of Peru (GOP) to deepen and expand democratic processes and, with new elections now underway, Peru has an opportunity to strengthen its democratic government and broaden its open market economy. To support these efforts, USAID provided assistance to GOP institutions to conduct the 2001 elections and to further strengthen democratic processes and institutions. USAID assistance helped to increase pre-election civic participation, increase the number of valid votes cast in elections, educate citizens regarding their rights and responsibilities, and create conditions that facilitated the reporting of deficiencies in the elections. International observers of the first round elections, held on April 8, declared the election to be free, fair and transparent. Moreover, the observers declared Peru's electoral process to be one of the best they had witnessed. The international donors are optimistic that the upcoming second round of balloting will also be successful. USAID continues to support the election process at this critical juncture in Peru's history. Peru's excellent cooperation with the United States in achieving shared counternarcotics goals has resulted in Peru receiving full narcotics certifications for the last five years. Since 1995, coca cultivation has decreased by a remarkable 70% due to the successful U.S./Peru law enforcement effort and USAID's alternative development program, resulting in the reduction of the potential flow of harmful drugs to the United States and other consumer nations by 315 metric tons. U.S. support of market reforms, export promotion, and economic growth has helped to make Peru's free market economy one of the most important in Latin America. The United States remains Peru's largest trading partner and foreign investor. In 2000, USAID helped to create over 5,300 new jobs, provide credit to nearly 70,000 micro-entrepreneurs, and generate $14 million in sales. USAID's food assistance program addressed the food security needs of over one million poor people, focusing on malnourished children and their families. Over the last decade, the overall health of Peruvians has improved significantly, however services still do not meet quality standards to respond to those most at risk. USAID assistance has helped to improve the management and quality of health care in regions with the greatest need, resulting in a 25% drop in maternal mortality in the last two years. To respond to environmental threats, USAID efforts are improving environmental policies and promoting private sector participation. As a result, industrial plants have reduced pollution levels; environmental and natural resource laws have been enacted; protected areas have made management improvements; and the percentage of Peruvians with a concern for environmental matters has increased from 15% in 1998 to 30% in 2000. Girls continue to face daunting challenges in completing primary school. Geographic, socio-cultural, economic, and academic factors make it harder for girls to enroll and stay in school. USAID is addressing this problem by establishing local networks to promote girls' quality education and develop cost-effective interventions to increase girls' education. In 1998, Peru and Ecuador signed a Peace Agreement, ending a long-standing border conflict. The area is severely underdeveloped, but a Bi-National Plan seeks to improve socio-economic conditions. With a pledge of $20 million to Peru over five years, the USG, through USAID, supports activities to make improvements in latrines, classrooms, potable water systems and rural roads, already benefiting over 2,000 poor families living along the border. In spite of recent setbacks, Peru has shown its resilience and capacity to withstand both external shocks and internal crises. However, lasting improvements in the areas in which USAID is currently involved will require continued assistance over the medium term. Other DonorsThe net development assistance to Peru during 1999, as per latest official figures, was $452 million. The U.S. was the second largest bilateral donor, contributing $124 million (30% of the total), behind Japan's $189 million (46% of the total), followed by Spain, the Netherlands and Germany. Japanese assistance was focused on economic infrastructure loans. World Bank and the Inter-American Development Bank provided assistance in economic and social infrastructure, financial system strengthening and humanitarian assistance. FY 2002 ProgramThe FY 2002 program will continue to focus on the needs of Peru's disadvantaged population - the poor, women, children, indigenous groups and ethnic minorities. To promote a more democratic Peru, USAID will support activities aimed at strenghtening democratic processes and institutions, including increased independence and efficiency of the judiciary, protection of human rights, freedom of expression, access to the media, and reform of the electoral system. In alternative development, USAID will continue to reduce the illegal production of coca and promote a sustainable alternative licit economy for participating communities. To broaden economic growth, USAID will support the growth of ten economic corridors, and maintain its assistance to the poorest, food insecure people of the jungle and highlands. In health, USAID will support activities in family planning, reproductive health, child survival, infectious diseases and HIV/AIDS prevention, ensuring that mechanisms are in place to provide quality health care in the future. In the environment, USAID will implement innovative, replicable activities in biodiversity and pollution prevention, and strengthen local institutions. In girls' education, USAID will support the full implementation of community- and school-based activities in the rural areas with the greatest needs. Finally, USAID will continue to support activities that improve the quality of life of populations living along the Peru-Ecuador border Activity Sheets
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