State Capacity Building for Economic Growth, Poverty Reduction and Social Equity: The Case of Perú

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1 State Capacity Building for Economic Growth, Poverty Reduction and Social Equity: The Case of Perú United Nations Department of Economic and Social Affairs Division for Public Administration and Development Management (www.unpan.org) Mr. Guido Bertucci Director of DPADM August 9 th, 2006 Lima, Perú 1

2 Government Reforms for Poverty Reduction Presentation Outline I. Perú s Profile a. Economic Profile: Current Status and Challenges b. Poverty Profile: Current Status and Challenges c. Development Management Profile: Current Institutional Arrangements and Challenges d. E-Governance Profile: Current Status and Challenges e. Corruption and Public Accountability Profile: Current Status and Challenges f. MDG Oriented Profile: Government s Vision for the Country for II. Perú s Strengths III. Harvesting the Future: Vision for Moving Forward for Poverty Reduction and Social Equity IV. Suggested State Capacity Building Framework for Pro-poor Development V. State Capacity Building Initiatives: DESA s Suggestions VI. Implementation Strategies for State Capacity Building Initiatives 2

3 Average annual growth Real GDP Economic Profile: Current Status and Challenges Current Status Real imports of goods and services Real exports of goods and services Source: EIU, Challenges 2.1% average annual growth rate of GDP per capita compared to 2.5 % for the middle income group 49 % Debt/GDP ratio compared to an estimate 44% for the region, and 36% for non-oecd countries 2005 official unemployment rate is 7.6%. Further, female employment activity (nonagriculture work) stands at 59% compared to 80% for males Source: Economic diamond, World Bank Group, Note: If data are missing, the diamond will be incomplete. Percent change in GDP per capita for and from HDI, Debt/GDP ratio for 2003 from EIU database. Employment activity from EIU, 2006; by gender for 2001 from HDI,

4 Poverty Profile: Current Status Human Development Index (HDI) 2005 Findings HDI Rank 2005 HDI Value 2003 Life expectancy at birth (yrs) 2003 Adult literacy (% above 15 yrs) 2003 Combined gross enrollment ratio for primary, secondary, & tertiary school 2002/03 (%) Infant mortality rate (per 1,000 live births) Perú Latin America & Caribbean Middle Income Source: HDI Report,

5 Poverty Profile: Current Status and Challenges Current Status Challenges National Area of residence National Urban Costa Poverty (headcount) Gini Coefficient Poverty levels are significantly higher in rural than urban areas Regional differences in poverty rates are attributed to variations in household access to public services and limited infrastructure (i.e. roads, etc.) Metropolitan Lima Rural Costa Sierra Larger percentage of the poor are indigenous with 68.3% below the poverty line compared to 42.0% for non-indigenous Selva Higher inequality rates in urban areas, particularly in Lima with a Gini coefficient of.40 Population Distribution 26% of population resides in urban areas, while 74% resides in rural areas. Lower fiscal expenditures for public services particularly for public health programs relative to other Latin American countries Source: ENAHO, 2005; HDI,

6 Voice & Accountability (civil liberties, political & human rights, citizen participation) 27 Political Stability Governance Profile: Current Status and Challenges Current Status World Bank Good Governance Percentile Ranking for Government Effectiveness (public service delivery) 57 Regulatory Quality (policies supporting private sector development) 32 Rule of Law (confidence in & abide by rules) 45 Control of Corruption Challenges Quality of public service delivery remains one of Perú s key challenges demonstrated by its lower ranking in government effectiveness Rankings in political stability imply perceptions of highly unstable government Strengthening of the rule of law continues to be one of the critical governance areas that must be addressed High score on regulatory quality and low on rule of law, corruption, political stability. Peru is high on policies but low in implementation Source: World Bank Governance Indicator database, Note: Higher values imply better governance ratings. 6

7 Development Management Profile: Current Institutional Arrangements and Challenges of Peru Current Status National Agreement Challenges Ministry of of Women and and Social Social Development Municicipality of of Baranco Citizen Citizen Proposal Group Group Ministry of of Interior Suitable mechanisms for citizen participation in public institutions Roundtable for for the the Fights Fights Against Poverty Stakeholders Consortium of of Socio- Socio- Econ Econ Research (CIES) (CIES) Institutional structures and cohesion Confederation of of Private Private Enterprises (CONFIEP) Assoc. Assoc. of of Social Social & Development Research Firms Firms (ANC) (ANC) Central to low level coordination Labor Labor Unions Unions Confederation (CGTP) Autonomous Center Center of of Laborers (CATP) 7

8 E-Governance Profile: Current Status and Challenges Current Status E-government readiness rankings: South & Central America Challenges Country Chile Brazil Argentina Colombia Venezuela Perú Bolivia Ecuador Paraguay Regional Average Index Perú scored higher than the South and Central American regional average but it can still improve its use of ICT and e- tools to support development and service delivery Source: 2005 E-government readiness Survey, UNDESA 8

9 Corruption and Public Accountability Profile: Current Status and Challenges Current Status 2005 CORRUPTION PERCEPTIONS INDEX (CPI) COUNTRY COUNTRY CPI SCORE RANK 51 Costa Rica El Salvador Colombia Brazil Perú Argentina Venezuela 2.3 Challenges Perú s CPI score is 3.5 out of 10, revealing that corruption is a continuing challenge Perú s accountability mechanisms including audit, monitoring, and evaluation require further capacity building Citizen engagement in accountability also requires attention Note: Higher CPI score implies better rankings; a score of 0 signifies highly corrupt while 10 refers to a highly clean government Source: Corruption Perceptions Index (CPI) Report,

10 Perú s MDG Oriented Profile: Government s Vision for the Country for Long Term Objectives Human development: combat extreme poverty An economy that promotes social justice: control inequality & create jobs Infrastructure for national development: increase regional infrastructure & competitiveness Continental integration: promote South American integration Short Term Immediate Actions Gender equality: provide equal rights for women & mothers Youth participation: create jobs for the youth and create a Youth Council Human development: improve infant mortality, life expectancy, education, poverty, access to portable water/electricity and provide minimum level of nourishment Infrastructure: increase rural/urban roads Citizen security: increase police force Housing: issue land titles Access to capital by the rural poor: increase funding of micro credit programs and budget of Agriculture bank Source: President Garcia s Government Plan for available at: 10

11 Perú s Strengths Macroeconomic Policies Demonstrated an increase in growth rate in GDP per capita from mid-90s to early 2005, though a much greater growth rate is required Promotion of job creating growth strategies is essential to ensure that economic growth contributes to poverty reduction Governance/ Institutional Framework for Policy Making and Implementation National Agreement s 31 programmatic points (government & civil society partnership) provides the basic framework for pro-poor development Commitment of President Garcia s administration to implement policies for the timely realization of the MDGs, specifically to alleviate poverty and address social justice and inequality Decentralization framework and decentralization laws at the municipal and regional levels exist Established institutions that promote citizen participation, transparency, accountability and ethics in civil service Achieved high rankings in regulatory quality which pertains to the ability of the Government to formulate and implement sound policies and regulations enabling private sector development (57 percentile rank relative to 50 for Latin American Region) Legislative provisions promoting citizen participation in public activities, transparency, access to public information and ethics in civil service exist Established preliminary infrastructure for use of ICT to support development 11

12 Harvesting the Future: Vision for Moving Forward for Poverty Reduction and Social Equity Human development Citizen participation in public institutions Horizontal and vertical coordination Enhancing public service delivery Monitoring and evaluation E-governance Enhancing quality of the civil service MDG MDG Oriented Oriented Policies Policies Pro-Poor Pro-Poor Policy Policy Processes Processes Joined-up Joined-up Government Government Decentralized Decentralized Delivery Delivery Systems Systems Citizen based Citizen based Public Public Accountability Accountability System System ICT ICT Oriented Oriented Government Government Civil Civil Service Service Reform Reform 12

13 Suggested State Capacity Building Framework for Pro-Poor Development ACHIEVING THE MDGs: Growth with with Equity Government s Vision for the Country for Social Social Equity Equity Consolidated Consolidated Democracy Democracy National National Agreement Agreement Economic Economic and and Social Social Development Development MDG MDG Oriented Oriented Policies Policies Civil Civil Service Service Reform Reform Pro-Poor Pro-Poor Poor Policy Policy Processes Processes Joined-up Joined-up Government Government Decentralized Decentralized Delivery Delivery Systems Systems Citizen-based Citizen-based Public Public Accountability Accountability System System ICT ICT Oriented Oriented Government Government 13

14 State Capacity Building Initiatives: DESA s Suggestions 1. MDG Oriented Policies Eradicate extreme poverty& hunger: - Improve access and quality of public services - Increase effective safety net programs (education and health) for the urban and rural poor Adopt targeted policies, programmes, projects and budgets for the development of indigenous peoples Reduce infant mortality and improve maternal health: Increase the demand for health services by lowering opportunity costs for the poor Promote gender equality and empower women Achieve universal primary education: Promote increased demand for education including quality of education Prioritize the development of public infrastructure, especially in rural areas 14

15 State Capacity Building Initiatives.contd. 2. Pro-Poor Policy Processes Citizen engagement and social mobilization for social development policies: Citizens Social Charter, at national as well as local government levels Citizen engagement in budget formulation, monitoring and implementation at all levels both national and local levels Citizen engagement for the full and effective participation of indigenous people, with particular emphasis on women and youth National government/local government consultative process for national policy making Formalized system in which national and local governments work together to create innovative programs that emphasize community engagement for achieving MDG targets 15

16 State Capacity Building Initiatives contd. 3. Joined-up Government Assess the capacities and respective roles and functions of central level institutions that advance pro-poor policies, especially how they contribute to: Joined-up set of cohesive policies Harmonization of roles/functions and regulatory framework Establishment of institutional linkages, vertical and horizontal for efficient and effective delivery of services Quality service delivery at the grass-root levels, both at the central and decentralized levels 16

17 State Capacity Building Initiatives.contd. 4. Decentralized Delivery System Mobile one-stop public service delivery Devolve administrative and financial authorities to the local governments Provide technical assistance to enhance capacities of local and regional governments and encourage collaboration with various sectors such as civil society and the academia 17

18 State Capacity Building Initiatives.contd. 5. Citizen-based Public Accountability System Accountability, audit and central mechanisms for Results Based Monitoring and Evaluation (RBME) Develop indicators to regularly measure government efficiency Enhance the credibility of anti-corruption and allied watch-dog institutions (foreign or home-based organizations) Independent commission against corruption Incorporation of citizens into the public accountability system 18

19 State Capacity Building.contd. 6. ICT Oriented Government: Service delivery through E-government Enhance national website to display relevant information on public services and facilities for on-line service delivery Increase use of ICT to enhance coordination within and across government levels Improve access of ICT in rural areas through application of appropriate technologies Automation of back-end and front-end government systems 19

20 State Capacity Building.contd. 7. Civil Service Reforms: Promotion of Professionalism, Integrity and Ethics in the Civil Service Strengthen the Law on the Code of Ethics in Civil Service (enacted in 2002) Streamline of public administration procedures (e.g. with the use of ICT) Eliminate clientelism and patronage activities by civil servants Revive the National School of Public Administration Enforce the adopted principles of the Ibero-American Charter for Public Service Introduce publicly transparent system of bidding government contracts Emphasize client satisfaction through quality training programs for civil servants 20

21 IMPLEMENTATION STRATEGIES FOR STATE CAPACITY BUILDING: A STRATEGIC FRAMEWORK Assess short-term term and long term government reforms Short listing of quick-win reform activities Listing of medium to long term reform activities Determine whether reforms should be applied to a specific sector or across different sectors Establish monitoring agency at the national level to track implementation and measure impacts of government reforms 21

22 DESA S CAPACITY Comparative Policy Research & Analysis Information Sharing & Training Programmes Technical Cooperation DPADM South-South Cooperation 22

23 DESA s Capacity and Areas of Assistance for Perú Comparative Policy Research and Analysis DESA can help Perú by undertaking a capacity assessment study of its current institutions and suggest options of change and adjustments so that these get better aligned within the framework of Perú s development vision including MDGs. Information Sharing and Training Programmes DESA has developed several on-line and on-site training programmes on decentralization, e-governance, participatory governance, results-based monitoring and evaluation etc. for public service capacity building. These could be useful for Perú s public servants/training of trainers/capacity development of national training institutions etc. Technical Cooperation DESA maintains world class in-house interregional advisors and other experts who can offer necessary capacity building advices for institutional strengthening activities. South-South Cooperation DESA has a wide network and database of best practices and possesses, the capacity to assist through South/South cooperation in a variety of areas including study tour, training and consultancy services. 23

24 End of Presentation: Q & A 24

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