Foreword
Since 2003, Peru has emerged as an open, rapidly growing economy. Over the review period of 2003–09, successive governments adopted policy platforms aimed at maintaining macroeconomic stability, furthering the private sector supply response, broadening participation in growth, improving social service delivery, and strengthening public institutions. There was a strong supply response over the review period, with private investment increasing sharply, the economy diversifying into new areas, and gross domestic product (GDP) growing at nearly 7 percent a year. Poverty declined substantially, although unevenly, across Peru’s three distinct geographical regions. The World Bank Group (WBG) supported each of the three pillars of the government’s poverty reduction strategy, namely: (i) broad-based economic growth that engaged a higher share of the population; (ii) enhanced human development through improved social service delivery; and (iii) strengthened public sector institutions. The WBG provided US$3.9 billion in new International Bank for Reconstruction and Development (IBRD) lending and International Finance Corporation (IFC) financing, along with a range of analytic and advisory services. There was a close convergence of views on the development agenda between the WBG and the government over the review period, which facilitated relevant WBG engagement. WBG activities supported economic growth by helping: (i) improve fiscal management; (ii) develop rural and urban infrastructure; and (iii) support private investment in emerging sectors. Challenges remain, however, in making growth more inclusive, with differential poverty reduction seen across the country’s three distinct regions. In the social
sectors, IBRD helped realize good progress in implementing difficult second-generation reforms, although achievements in some areas fell short of established goals. The WBG made an effective contribution to strengthening public financial management, although its support for broader improvements in public sector management yielded modest results. Consistent government commitment and effective management of the reform agenda were key factors underpinning positive WBG contributions over the review period. Positive outcomes of WBG support also reflected, among other things, the WBG’s long-standing policy dialogue, maintenance of its reputation as a high-quality service provider, strong intellectual contributions, and consistent dialogue with civil society. IEG recommends that the WBG: (i) tailor its strategy to support long-term integration of Peru’s three distinct regions; (ii) seek opportunities to support large-scale infrastructure development; (iii) develop a more strategic approach to helping improve public sector management; (iv) seek further innovations in IBRD’s instruments against a backdrop of declining demand for its financial resources; (v) seek to help develop a strategic planning function in Peru; (vi) build a close strategic partnership with development partners that provides concessional finance in the social sectors to optimize synergies with IBRD policy lending and analytic and advisory activities; (vii) develop a strategic focus for IFC around employment-generating industries in emerging sectors; (viii) maintain IFC’s additionality by supporting lower-tier and more regionally dispersed private companies; and (ix) leverage the strong country presence of IBRD and IFC to enhance MIGA’s marketing and risk assessment functions.
Vinod Thomas Director-General, Evaluation
Foreword
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