Peru: Anti-Poverty Plan Shrouded In Mystery

(IPS) – Peruvian President Alan García says that one of the pillars of his strategy to radically reduce poverty in his country is a new plan which, although it is fully operational, remains a mystery to the majority of Peruvians.

The plan has a name, "Crecer" (Grow), but otherwise remains intangible to experts and to the 44.5 percent of Peru’s 27.2 million people who live below the poverty line, according to the latest report by the National Institute of Statistics and Information Technology (INEI).

García and his ministers tend to talk about Crecer as if it were a programme, but in reality it is the coordinating body for all social investment projects.

The government affirms that Crecer will use a new approach to improve the effectiveness of the 26 existing social programmes in the fight against poverty, by refining the target populations, reducing administrative costs, and instituting results-oriented management.

On paper, its main goal is to reduce chronic child malnutrition by five percentage points. This type of malnutrition is caused by long-term undernourishment, and is diagnosed by comparing height with age.

According to the INEI, 24.2 percent of children under five suffer from chronic malnutrition, while the World Health Organisation (WHO) estimate for Peru is 31 percent.

However, García said on Jul. 28, the first anniversary of his administration, that the goal was to bring chronic malnutrition down by more than eight percent.

"Reducing child malnutrition is our banner project, because it is a determining factor of poverty, and because we have a long-term plan to ensure that there will be a new generation of Peruvians who are able to enter the economic circuit," Iván Hidalgo, technical secretary of the Interministerial Commission for Social Affairs and head of Crecer, told IPS.

The plan kicked off in July with the intention of reaching 330 extremely poor districts in its initial phase, out of the 811 that are projected to receive special attention by the end of García’s presidential term, in 2011.

By that time, one million children under five and 150,000 pregnant women are expected to benefit from the social projects.

Like the rest of the United Nations member countries, Peru committed itself to halving the proportions of extremely poor and hungry people by 2015, from 1990 levels.

These are the first two Millennium Development Goals (MDGs), adopted by the international community in 2000.

But since 1990, poverty has fallen by only six percent in Peru.

The areas selected for the first phase of the Crecer plan are located in the seven poorest regions of the country: Amazonas, in the northeast, Huánuco, in the centre, and Apurímac, Ayacucho, Cusco, Huancavelica and Puno in the south.

In these regions, 66 percent of children under five suffer from chronic malnutrition, 79 percent of households have no piped water, 94 percent lack sewerage, and 94 percent of families use wood as their cooking fuel.

Crecer will meet the basic needs of these people with the social programmes that already exist, in education, health, sanitation and infrastructure, "by focusing and coordinating social investment to achieve the aim of reducing child malnutrition," Hidalgo said.

But experts find that hard to swallow.

"Increased coordination is not a bad idea and is necessary, but there is no clear information on how this plan will decrease child malnutrition, which is a serious concern between six months and three years of age. That’s where the real problem lies," economist Pedro Francke, a researcher with the Economic and Social Research Consortium (CIES), told IPS.

"Every plan, if it’s going to work, needs to be based on an operational strategy, that is, it needs to explain how the goods and services are going to be provided, otherwise it’s just words on paper. So far, no one knows how Crecer is going to work," Enrique Vásquez, of the University of the Pacific’s Research Centre (CIUP), told IPS.

Hidalgo stated that the aid does have a working plan, based on step-by-step support for families.

Through the Integrated Health Insurance plan or the "Juntos" (Together) programme, which pays out 100 soles (31 dollars) a month to every mother, we will help families with children under five who are living in extreme poverty, the official said.

Mothers will be taught to provide their children, including those yet unborn, with the nutrients they need, in order to reduce the vulnerability of newborn babies, Hidalgo went on.

When the children go to school, they will be provided with school breakfasts, to be organised by municipalities and regional governments.

"And in the last phase, we will try to have families from the Juntos programmes join productive development projects, so that they can have an opportunity in the formal economy," said the head of Crecer.

In the productive development stage, according to Hidalgo, the intention is to benefit 150,000 families out of the total of 500,000 in the Crecer plan, by providing technical assistance so that targeted families join "microeconomic corridor" initiatives, to export, for instance, agricultural produce.

At the moment there are more than 1,500 projects in 11 social "microcorridors", producing 17 items for export, the government says. These programmes are financed by the government and by international organisations like the Inter-American Development Bank (IDB).

But Vásquez said a monitoring system should be put into effect to ensure that the programmes’ resources reach the people who need them the most.

Hidalgo replied that money would not be spent on a complex programme of monitoring to measure the effectiveness of the Crecer plan. Instead, goals would be set and measured, such as increasing the proportion of births that take place in hospitals, and weight gain in children, or reducing the school dropout rate.

The official also told IPS that a list of beneficiaries of all the social programmes would be ready by the end of this month, to avoid duplication of efforts or absence of coverage in certain areas.

But in order to achieve this, accurate and up-to-date figures on poverty levels are needed, Vásquez said. Errors in the statistics are the reason why 3.5 million poor Peruvians do not fall within the purview of any social programme, and "this means that resources are misspent," he argued.

The Aug. 15 earthquake has dramatically enlarged the number of people left destitute. Meanwhile, President García’s calculations of the poverty reduction goals are under suspicion, because they use 2005 figures as a baseline, and do not take into account the projected demographic growth rate of 1.3 percent a year until 2011.

According to the new statistics provided by the INEI in late July, 48.7 percent of the country’s 26.8 million people were living in poverty in 2005, and in 2006, 44.5 percent of the population, which had grown to 27.2 million, were poor.

García has said that he will reduce poverty to 40 percent by the end of his mandate. That would represent a 10 percent reduction in the proportion of poor people.

Hidalgo says that from November 2006 up to the first few months of this year, the Crecer planners analysed existing social programmes and created a poverty map to redirect aid to the neediest rural areas.

They concluded that over the last 10 years, more than five billion soles (1.6 billion dollars) have been spent on feeding programmes, yet chronic child malnutrition has only been reduced by one percent, Hidalgo said.

Furthermore, there was no way to measure families’ unmet needs, and 40 percent of the project funds were used for administrative expenses.

Money saved by consolidating 86 programmes into just 26 has been transferred to the Equality Fund, amounting to one billion soles (315 million dollars), which is being used to finance the Crecer plan.

The government and mining companies in Peru have agreed that the latter will make a voluntary contribution of 500 million soles (158 million dollars) a year. This will not go into the Equality Fund, as was first thought, but will be directly invested by the companies and local authorities to build health centres or schools, according to priorities set by Crecer, Hidalgo said.

Sociologist Sinesio López, a professor at the Catholic University of Peru, said he believes that this is not enough.

If improvement of the programmes is not accompanied by employment policies and tax reform, so that those who can afford more pay more, and tax evasion is not reduced, attempts to combat poverty will be merely an illusion, López said.