Andean Development Fund: poverty in Peru could be reduced by as much as 31 percent by 2011

Poverty in Peru could be reduced by as much as 31 percent by 2011 if the Andean country maintains an annual economic growth rate of 6 percent and develops an efficient and integrated social policy, reported the Andean Development Fund, or CAF, on Monday.

The CAF’s expected poverty decrease is in sync with the Peruvian government’s aim to reduce the number of people living in poverty and extreme poverty from 39 to 30 percent by 2011. However, the CAF reports, isolated efforts, mismatching policies and inefficient government programs put Peru at risk of missing the mark.

Though President Alan García promised that his “Crecer”, or “Growth” program – a coordinating body for all social investment projects – would greatly improve the effectiveness of the more than 20 existing programs by refining target populations and, among other things, reducing administrative costs, nearly 11 million Peruvians continue to live in poverty, and 3.7 million in extreme poverty. And, more than 600,000 people still have no access to water, electricity or sewage infrastructure.

Despite Peru’s unprecedented economic growth prior to the global financial crisis, poverty has fallen only slightly. And because the country’s earnings from mining, exports, and foreign investment have boosted wealth much faster than they have reduced poverty, the majority of the population — hit hard by rising global commodity prices for staples such as rice and oil — has seen little or no benefit from the newly-regained macro-economic stability.

More than 39 percent of the total population and two-thirds of the rural indigenous population live below the poverty line. And, according to Peru’s National Statistics and Information Institute, or INEI, in Peru’s poorest department of Huancavelica, the poverty rate climbed from 84 percent to 85 percent.

Many highland farmers remain trapped in subsistence farming on small scattered plots, and these unwaged people are often more or less cut off from the market economy, contended Richard Webb, a social researcher and former director of Peru’s Central Bank.

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