Peru

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Development Challenge The USAID Program Other Program Elements Other Donors Program Data Sheets Summary Tables USAID Search: Peru Previous Years' Activities 2002, 2001, 2000, 1999, 1998, 1997 Last updated: 35     THE DEVELOPMENT CHALLENGE: In order to strengthen Peru's fragile democracy, sustainable social and economic development must lead to improvements in the quality of life for all Peruvians, especially the rural poor. Free trade and more decentralized private and social investment are needed to drive broad-based economic growth as a foundation for democracy. However, Peru's economic growth slowed from 6.7% in 1997 to 3.1% in 2000, and stalled at zero growth in 2001. Income distribution remains extremely uneven. Poverty is skewed along geographic and ethnic lines, and the country continues to have a significant debt burden of more than $19 billion, equivalent to more than 36% of Gross Domestic Product (GDP). Unless the immediate needs of its citizens are met, Peru's nascent democratic advances-as well as the economic reforms of the last decade-are at risk of reversal. Having recently emerged from years of authoritarian rule, Peru must strengthen its key democratic institutions and promote a market-based economy. Throughout the 1990s, Peru made exceptional progress in combating terrorism, reducing the production of coca, and stabilizing the economy. However, the government of President Alberto Fujimori collapsed under the weight of corruption, authoritarian rule, an economic downturn, and increasing public discontent, culminating in a universally acknowledged unfair election and the President's resignation in disgrace in November 2000. An eight-month transitional government oversaw an open and fair electoral process in 2001 and took measures to pave the political road for the newly elected government that took office in July 2001. Since the beginning of its mandate, President Alejandro Toledo's administration has made a commitment to reinvigorate the country's democracy and promote a market-based economy that will provide benefits to all Peruvians. Yet the internal political and economic situation remains precarious, especially in light of the current instabilities in the global economy. This context presents a unique set of opportunities and challenges to furthering U.S. interests in a key country of the Andean Region. The overriding U.S. national interest in Peru is to promote genuine democracy. Maintaining Peruvian cooperation in combating narcotics trafficking leads a second tier of interests that also includes open markets and expansion of exports; poverty alleviation; improved health; and sound environmental policies and practices. USAID works as an integral member of the Embassy country team to promote these U.S. interests in Peru. THE USAID PROGRAM: FY 2002 Estimate: $153.178 million FY 2003 Request: $146.903 million The overarching goal of USAID's program in Peru is the promotion of sustainable opportunities for improved quality of life through strengthened democratic processes and institutions. This democracy-oriented goal is woven throughout all program objectives, primarily by increasing citizen participation and strengthening the capacity of both private- and public-sector institutions to be transparent in their decision-making and accountable for their actions. In FY 2002, USAID begins a new five-year strategy period with seven development objectives, which will build on past successes and efforts to strengthen democratic institutions and practices; reduce poverty in select areas; improve health care for populations at high risk; promote sustainable natural resources management; support the U.S. Government's (USG) efforts to reduce illicit drug production through alternative development in coca-growing regions; improve the quality of basic education, especially for girls; and address quality-of-life issues to promote political and social stability on the border with Ecuador. These programs represent the next phase in USAID's assistance to Peru, continuing to focus on the same sectors in which USAID has worked in recent years, but in the context of Peru's return to a more democratic political environment and worsening economic circumstances in the country and region. FY 2002 funds will principally finance activities described in last year's Congressional Budget Justification. However, the following Program Data Sheets include adjustments that reflect lessons learned through the previous strategy period (FY 1997-FY 2001), the current political and economic circumstances in Peru, and shifting USG priorities and approaches in the Andean region. ONGOING PROGRAMS FOR WHICH NO NEW FY 2002 OR FY 2003 FUNDING IS REQUESTED:The USAID program in Peru includes the following objectives for which USAID is not requesting new funds, but is continuing to expend funds already appropriated. Number: Title: Last Notified: Planned Completion: 527-001 Broader Citizen Participation in Democratic Processes FY02 CBJ, pg. 498 FY 2002 527-002 Increased Incomes of the Poor FY02 CBJ, pg. 504 FY 2002 527-003 Improved Health, Including Family Planning, of High-Risk Populations FY02 CBJ, pg. 509 FY 2002 527-004 Improved Environmental Management in Target Sectors FY02 CBJ, pg. 512 FY 2002 527-005 Reduced Illicit Coca Production In Target Areas of Peru FY02 CBJ, pg. 520 FY 2002 OTHER PROGRAM ELEMENTS: A variety of USAID centrally-funded activities are being implemented in Peru. Since February 2001, the Office of Transition Initiatives (OTI) has managed a number of important transition activities, which directly complement and are closely coordinated with USAID's's democracy program. OTI's two-year, $10 million program covers decentralization, legislative strengthening, anti-corruption, human rights, and civil-military relations, and will be gradually phased out as new USAID initiatives begin. Also in the democracy area, centrally managed programs support assistance to victims of torture. In the health sector, Washington-based activities support work with street children and orphans, as well as activities in family planning service provision and applied research on drug resistance. Centrally funded small grants from the Women in Development Program support activities in natural resources management and income generation for poor women. Washington-based agriculture activities in Peru focus on applied research and extension. Central funds also support educational reform and the improvement of girls' education. The U.S.-Israeli Development Research Program funds several university research activities. USAID's Office of Foreign Disaster Assistance has a regional representative based in Peru, who is responsible for training in disaster prevention, mitigation, and preparedness. OTHER DONORS: Official international technical cooperation to Peru for 2000 was $281 million. This amount includes bilateral and multilateral assistance and excludes loans. The United States was the largest bilateral donor with 70% of total international technical cooperation to Peru, followed by Japan (18%), whose programs focus on economic growth, health and social development and infrastructure; and Switzerland (4%), whose programs focus on economic growth, agriculture and pollution control. Other donors include Germany, Canada, Spain, the Netherlands, and Sweden. Major multi-lateral donors include the United Nations, the Inter-American Development Bank, the World Bank, the Andean Development Corporation, and the European Union. Donor coordination is well organized through sectoral donor coordination groups focused on gender, education, counternarcotics, health, the environment, and poverty reduction. Program Data Sheets 527-006  Expanded opportunities for girls' quality basic education in target areas 527-008  Improved Quality of Life of Peruvians Along the Peru-Ecuador Border Target Areas 527-009  Democratic Processes and Institutions Strengthened in Critical Areas 527-010  Increased Economic Opportunities for the Poor in Selected Economic Corridors 527-011  Improved Health for Peruvians at High Risk 527-012  Strengthened Environmental Management to Address Priority Problems 527-013  Reduced Illicit Coca Production in Targeted Areas of Peru Country Background Information Resources     CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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