Poverty Reduction Strategy in IBRD Countries: The Case of Peru

1
Poverty Reduction Strategy in IBRD Countries The
Case of Peru

• William Reuben and Annika Silva-Leander
• LCSSO
• World Bank

2
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.
  

3
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.

4
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.
  

5
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

6
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 cross-sectoral
  dialogue and consensus-building - a long-term (20
  years) vision for the development of Peru.

7
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 2001-2006).
  
• 2002 Signature of the National Agreement, a
  national development plan of which 7 of the 31
  national policies are related to poverty
  reduction.

8
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

9
Perus 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.

10
Some Defining Characteristics (and Challenges) of
Perus 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.
  

11
Achievements in Implementing Perus 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 .

12
Institutional Setup in Implementing Perus
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 cash-transfer 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.
  

13
Institutional Setup in Implementing Perus
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).
  

14
Institutional Setup in Implementing Perus
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.
  

15
Remaining Challenges for Perus 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 sub-national
  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.