Download Peru`s Poverty Reduction Strategy

Poverty Reduction
Strategy in IBRD
Countries: The Case of
Peru
William Reuben and Annika Silva-Leander
LCSSO
World Bank
Context
Political and economic crisis as the country entered the post-Fujimori
period in 2001 and embarked on a democratic transition:

Highly centralized State weakened by low levels of legitimacy and
credibility.

Weakened civil society after years of authoritarian regime.

Legacy of endemic corruption, including clientelistic use of social
programs.

Weak coordination among social programs and duplication of
efforts.

Poor targeting of social programs.

Insufficient accountability mechanisms and monitoring and
evaluation of social programs.

Lack of a poverty reduction strategy with clear objectives.

Little space for citizen participation in policy-making processes.
Milestones Leading Up to The
Poverty Reduction Strategy
To help consolidate democracy, the post Fujimori
Governments put in place processes and spaces
of multi-sectoral dialogue and participation:


2001: Establishment of the National
Roundtable for the Fight Against Poverty, a
multi-sectoral, government-civil soiety forum to
facilitate dialogue and participation in public
policies on poverty reduction.
2002: Creation of the National Agreement
Forum, to develop a long-term national
development plan based on consensus-building
among sectors and stakeholders.
Poverty Roundtables (Mesas)
Established by Law in 2002 as an institutionalized space of
dialogue between the State and civil society on issues of
poverty reduction at the national, regional and local levels.
Main objectives:

Facilitate multi-sectoral dialogue in the formulation of social
policies.

Help institutionalize citizen participation in the formulation
and monitoring of social policies.

Serve as a consultative organ in the formulation of national,
regional and local development plans.


Serve as a coordinating space between the State and civil
society to help achieve greater efficiency of poverty
reduction programs.
Help increase transparency of poverty reduction programs.
Structure of Poverty Roundtables
National, regional and local presence with a total
of 1.372 Mesas created between 2001 and 2006.
Currently:

National Executive Committee (5 Government & 5
Civil Society representatives)

26 Regional Mesas

122 Provincial Mesas

372 District-Level Mesas
National Agreement Forum
A national dialogue forum composed of
Government representatives, political
parties with representatives in
Congress (13), the National Poverty
Roundtable and civil society
organizations (10).
Mandate: to develop - through crosssectoral dialogue and consensusbuilding - a long-term (20 years)
vision for the development of Peru.
Precursors to the Poverty
Reduction Strategy



2001: Social Letter (elaborated by Poverty
Roundtables) delineating the broad
orientations of a poverty reduction strategy.
2001: Letter of Social Policy elaborated by
the Toledo Government (social policy
objectives of the Government for 20012006).
2002: Signature of the National
Agreement, a national development plan of
which 7 of the 31 national policies are related
to poverty reduction.
Main Content of National Agreement:
31 national policies and 268 sub-policies on (examples)

-

-
-
Democracy and State of
Law:
Strengthening of political
party system
Institutionalization of
dialogue and participation
mechanisms
Strategic planning
Decentralization
National security
Equity & Social Justice
Poverty reduction
Equality of
opportunities
Universal access to
education
Universal access to
health services
Employment
Food security

-

-
Competitiveness
Social market economy
Sustainable development
Science and technology
Rural development
An Efficient,
Transparent and
Decentralized State
Role of Armed Forces
Access to information and
freedom of expression
Human rights
Drug erradication
Peru’s National Poverty Reduction Plan
Based on the orientations of the Equity and Social Justice
pillar of the National Agreement, mixed Government-civil
society commissions - with active participation of Mesas elaborated the strategy, which was approved in August 2004.
Main focus:
 Development of human capabilities, with a focus on children
below 2 years.

Promotion of economic and productive opportunities and
capacities.

The establishment of a social protection safety net for
vulnerable groups.

Budget protection of 6 priority social programs.

Emphasis on civil society participation in design,
implementation and monitoring of poverty reduction
programs.
Some Defining Characteristics (and Challenges) of
Peru’s Poverty Reduction Strategy

A more closed, technical process than in many PRSP countries.

Short-term focus (2004-2006 period).

Not the main organizing framework (National Agreement was).

As opposed to National Agreement, no clear institutional framework was
defined (which meant less resources and capacities to ensure its
implementation and monitoring).

Lost visibility among a multitude of plans and strategies.

Difficulty of articulating plan with other social and economic policies.

Difficulty of translating plan into budget allocations given restricted fiscal
space.

Difficulty of cutting across sectoral divides of the Peruvian bureaucracy.

No permanent monitoring mechanism was established.

Poverty Roundtables were not given an official mandate to monitor the
Plan.
Achievements in Implementing Peru’s Poverty
Reduction Efforts





Coordination of most social assistance programs under one
Ministry (MIMDES).
Small reduction of poverty levels (2% between 2002 to 2004),
although greater for extremely poverty, especially in rural areas.
Average income of the poorest rose 33% between 2001 and 2004.
Since 2005, implementation of a conditional cash transfer
program (JUNTOS) for the first time in Peru.
Development of a National Plan of Attention to Children and Youth
(Priority Actions) which has resulted in concrete budgetary
allocations (at both national and local levels) as well as the
protection of budgets for such programs and in the development
of regional-level policies tending to this group .
Institutional Setup in Implementing Peru’s Poverty
Reduction Strategy: Increased Citizen Participation in
Policy Formulation Processes



Establishment of spaces at the national level to
facilitate civil society engagement in social policy
formulation (multi-sectoral board of conditional cashtransfer program Juntos, in addition to existing Health and
Education Councils and Poverty Roundtables).
Establishment of local-level spaces (Regional and Local
Health Councils and Education Councils, Regional and Local
Coordination Councils, Local Management Committees of
food programs, Local Conditional Cash Transfer Committees,
and Local Roundtables).
Institutionalization of Participatory Budgeting in all
municipalities.
Institutional Setup in Implementing Peru’s Poverty
Reduction Strategy: Accountability Mechanisms





Establishment of citizen vigilance committees to monitor municipal
expenditures (in progress).
Establishment of a variety of accountability mechanisms to monitor
social programs.
Process of establishing a social control system of the conditional
cash transfer program.
Establishment of the Dialogue on Childhood (with active
participation of Poverty Roundtables) to ensure implementation
and monitoring of the National Childhood Plan.
Improved targeting (now greater coverage of rural areas where
poverty is concentrated).
Institutional Setup in Implementing Peru’s Poverty Reduction
Strategy: Transparency and Information on Social
Programs



Transparency Portal on public expenditures “Friendly
Consultation” with information on social programs, including
allocated and executed budgets by program and locality. Has
resulted in independent civil society monitoring initiatives.
Decision to decentralize the portal to local governments)
Transparency Commissions established in Coordinating
Ministry for Social Assistance Programs (MIMDES) and
FONCODES (Social Fund) which have led to a significant
reduction of complaints about political use of social
programs.
Supervision and Transparency Committees for the
conditional cash transfer program which are coordinated
with Poverty Roundtables.
Remaining Challenges for Peru’s Poverty Reduction Efforts

Only a small reduction of poverty levels (headcount poverty rate reduced by only 2% between
2002-2004) and persistently high levels of poverty (52% of the population).

Coverage of basic social programs has expanded, but quality remains poor. Lack of clear quality
standards limits the ability to monitor quality in service delivery

30% reduction of spending for social assistance programs between 2000-2004 (from 1 to
0.7% of GDP compared to an average of 1.5% for the region).

Participatory budgets only cover capital budgets, which represent between 6-12% of subnational budgets.

Integration and coordination of social assistance programs is still work in progress as is
their decentralization.

The lack of identification documents remains a serious obstacle to accessing social
programs.

Insufficient poverty reduction impact of social assistance programs (consumption
deficit corresponds to 6.3% of GDP, while the current programs only cover 1% of those needs).

Only 1% reduction of chronic malnutrition in the 0-5 years population tranche in the last
decade (from 25-24%).

Targeting mechanisms have improved but are still not optimal, particularly for nutritional
programs.

Despite advances in strategies and programs directed to children, political will to
implementation remains slow.


Vigilance committees to monitor public expenditures at the municipal level are not yet
fully functional and effective in their role.
Provide a more long-term approach to poverty reduction programs with an emphasis
on asset creation (for situations of chronic poverty)