Peru Regional Development Policy:
Peru has made significant strides in strengthening its regional development policies over the last decade, achieving notable progress in strategic planning, governance, and capacity building. The country has experienced robust economic growth, averaging 4.1% annually between 2000 and 2023, supported by sound macroeconomic institutions. However, recent global challenges and internal factors have slowed down the pace of growth and stalled progress towards OECD income levels.
Key Findings:
- Persistent Regional Disparities: Significant economic, demographic, and social disparities persist between regions, with coastal areas generally performing better than rural and highland regions.
- Data and Indicators: While Peru's statistical system provides a wide range of regional and local indicators, gaps remain in areas like education, innovation, and labor market statistics, particularly at the provincial level.
- Strategic Planning: The national strategic plan and regional development plans have improved, but challenges remain in aligning national and regional objectives and ensuring effective coordination between different levels of government.
- Urban Development: Rapid urbanization has led to challenges such as housing shortages, informal land use, and inadequate transportation systems. The National Housing and Urbanism Policy aims to address these issues, but implementation requires better coordination and long-term planning.
- Rural Development: Rural areas remain largely focused on agriculture and poverty reduction, limiting opportunities for diversification and innovation. A more integrated urban-rural approach is needed to leverage the potential of rural regions.
- Multilevel Governance: Peru has strengthened its multilevel governance framework, with the creation of the Ministry of Territorial Governance and the National Intergovernmental Coordination Council. However, challenges remain in ensuring effective coordination and resource allocation between different levels of government.
Recommendations:
- Improve data collection and use: Enhance the generation, dissemination, and application of regional and local data, particularly in areas with gaps in the OECD data standards.
- Strengthen strategic planning: Develop a national framework for regional policy that provides a long-term, integrated, and balanced approach, ensuring alignment with national and regional priorities.
- Enhance urban governance: Implement the National Housing and Urbanism Policy effectively, focusing on affordable housing, sustainable land use, and accessible transportation systems.
- Promote rural development: Move beyond a narrow focus on agriculture and poverty reduction, promoting innovation, digitalization, and diversification in rural economies.
- Reform fiscal decentralization: Improve fiscal autonomy for subnational governments to enhance their capacity for resource generation and allocation, while ensuring fiscal stability and accountability.
Overall, Peru has made significant progress in regional development, but further efforts are needed to address persistent disparities, strengthen governance, and improve the effectiveness of investments to achieve more inclusive and sustainable growth.
