Poverty in Peru declined steadily from 2001 to 2016, dropping from 55 percent to 21 percent. In 2017, the poverty rate rose slightly to 21 .7 percent. The relative success Peru has had in reducing poverty, however, is a result of economic growth along with increased and improved social programs and technological innovations. The Inter-American Foundation, which currently has 20 active projects in the nation, has made significant contributions to the reduction of poverty in Peru, having invested more than $5 million in the nation and directly benefiting more than 35,000 people.
The Situation in Peru
In Peru, poverty is defined as having a monthly income of fewer than 338 soles (equal to $105). Poverty continues to be an issue in both urban and rural areas, with 44 percent of the impoverished population living in rural areas while the remaining 56 percent are located closer to urban centers. Those who are extremely poor tend to live in rural areas or on the very outskirts of the cities. Natural disasters, inadequate education and training and poor healthcare all contribute to poverty in Peru, making it a multi-dimensional problem.
The recent increase in the poverty rate can be at least partially attributed to political turmoil in the nation. Pedro Pablo Kuczynski was elected to office in 2016, and his policy decisions reflected a misunderstanding of Peru’s poverty and how best to reduce it. He resigned in March 2018, however, and his successor, Martín Vizcarra, has “declared the rise in poverty ‘unacceptable.’” It remains to be seen how new leadership will affect Peru’s poverty rates in coming years.
The Inter-American Foundation in Peru
While outside organizations cannot necessarily solve problems within Peru’s government, they can have an impact on improving the lives of Peruvians across the nation through targeted and effective investments and programming. The Inter-American Foundation, for example, has committed to investing in Peru by providing specific grants that are invested strategically to make the largest possible impact.
The Inter-American Foundation (IAF) was created by Congress in 1969 to act as an independent agency of the U.S. Government. The IAF focuses its efforts on reducing poverty in Latin America and the Caribbean, providing grants and creating partnerships with local organizations and governments. Rather than designing projects, the IAF invests in initiatives created by grassroots groups and communities, supporting local innovation.
The programs supported by the IAF in Peru employ a range of methods for various intended outcomes, although all are connected to efforts to reduce poverty in Peru. Program areas include leadership, education, job skills, enterprise development, agriculture, food security, legal assistance and inclusion. Most of these programs are funded by the IAF for periods of three to six years, with the amount of grant funding and the number of years the program will run determined at the outset. The IAF also estimates how many direct and indirect beneficiaries each grant will have.
Programs Supported by IAF in Peru
One of the initiatives most recently supported by the IAF, the Asociación Peruana de Productores de Cacao (APPCACAO), will receive $177,500 from the IAF and run from 2018 to 2020. This program is designed to help cacao producers, who often lack the income needed to support their families. According to the IAF, APPCACAO will help “raise their income and quality of life by improving their production of fine flavor cacao and strengthening their management and governance practices to ensure greater participation of women and youth.” This will directly benefit 1,260 individuals and another 3,900 will receive indirect benefits as this program seeks to improve agriculture, food security, leadership, education, job skills and enterprise development.
The Asociación Grupo de Trabajo Redes (AGTR) is a program that also addresses the economic empowerment of women by focusing on female domestic workers. The IAF recognizes that these women are likely to have poor working conditions and low incomes. It, therefore, works to educate female domestic workers about their legal rights and helps to improve their negotiation skills, helping them find higher-paying jobs with humane working conditions. With an IAF investment of $240,000, this program will be active from 2017 to 2020, directly benefiting 2,600 individuals and indirectly benefiting 44,650.
A third program working to reduce poverty in Peru is the Asociación Kallpa para la Promoción de la Salud Integral y el Desarrollo (Kallpa), which focuses on reducing youth unemployment, including the unemployment of disabled youth. Youth is defined as anyone between the ages of 15 and 29, and the program provides the support needed for young people to “find meaningful employment or start a small business.” The IAF has invested $554,390 in this program, which is expected to benefit 1,550 direct and 5,200 indirect individuals.
These programs provide a brief look at the work that the IAF has supported, highlighting its efforts to improve conditions for women and young people, decrease food insecurity, improve working conditions and reduce unemployment, all of which are vital to decreasing poverty in Peru. Notably, however, 11 out of the 20 active projects currently supported by the IAF were scheduled to end in 2018, and it remains to be seen whether the IAF will continue to invest in as many projects in the future.
– Sara Olk