OECD Development Pathways

OECD Development Centre

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The OECD Development Pathways series helps developing and emerging economies to identify innovative policy solutions to their specific development challenges. Higher levels of well-being and more equitable and sustainable growth cannot be achieved by merely reproducing the experience of industrialised countries. For each of the countries studied, the series proposes options for action in specific policy areas and at the broader strategic level. It identifies the binding constraints to development across all sectors and proposes whole-of-government solutions.

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Multi-dimensional Review of Peru

Multi-dimensional Review of Peru

Volume 2. In-depth Analysis and Recommendations You do not have access to this content

OECD Development Centre

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14 Oct 2016
9789264264670 (PDF) ; 9789264265363 (EPUB) ;9789264264663(print)

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Peru has experienced significant improvements in economic growth, well-being and poverty reduction since the introduction of macroeconomic reforms, economic openness and more effective social programmes in the 1990s. However, the country still faces structural challenges to escape the middle-income trap and consolidate its emerging middle class. This report provides policy actions to tackle the main bottlenecks to boost inclusive development and well-being in Peru. In particular this report presents an in-depth analysis and policy recommendations to boost economic diversification and productivity, improve connectivity and reduce informality. Policy actions in these areas demand better institutions and improvements in areas and markets, including research and development and innovation, fiscal policy, education and skills, logistics and transport infrastructure as well as labour and product markets.

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  • Foreword

    Economic growth matters, but it is just one facet of development. Policy makers should focus their attention on ensuring that their country’s development path is sustainable and that the lives of their citizens improve. This requires reconciling economic, social and environmental objectives.

  • Acronyms and abbreviations
  • Executive summary

    This is the second volume of the Multi-dimensional Country Review (MDCR) of Peru. It builds on the results of the first volume, which identified the main constraints to achieving well-being and sustainable and inclusive development, and provides recommendations in three key areas to address those constraints: promoting economic diversification and productivity, improving transport connectivity, and tackling informal employment. A forthcoming volume will propose a way of prioritising policy interventions and a framework for measuring policy implementation.

  • Overview: Charting Peru's way to a high-income economy with better well-being for all citizens

    Many factors play into Peru becoming a high-income country with an expanded and a consolidated middle-class. The changing external landscape – particularly the economic evolution of one of Peru’s largest export markets, China – has significant consequences for Peru’s traditional economy and for more inclusive development going forward. This chapter also summarises the value of the multi-dimensional review (MDCR) approach and methodology, leading to an overview of the three topics reviewed in this report, their results and the policy implications for more inclusive development in the country: productivity and economic diversification, transport connectivity, and informality. The chapter concludes with three future-state scenarios developed to consider the recommendations in light of major global trends that may affect development prospects for Peru.

  • Towards higher economic diversification and productivity in Peru

    This chapter analyses and provides recommendations to boost economic diversification and productivity in Peru. An analysis of Peru’s recent performance in productivity and economic diversification indicates a marked need to boost both in order to achieve a more inclusive development. Several opportunities emerge based on potential new products to export and recent experiences in both successful economic diversification and the promotion of start-ups and entrepreneurship. The chapter identifies policy focuses needed to seize these opportunities, including further innovation; small and medium-sized enterprise (SME) sustainability and reduced barriers to entrepreneurship; and increased regional integration. Better management of commodity-based revenues at the sub-national level and improvements in the taxation system are also relevant to Peru’s development goals. The chapter concludes with recommendations for the institutional framework to improve the design and implementation of Peru’s strategic development agenda.

  • Improving transport connectivity in Peru

    Several indicators on transport costs, logistics performance and transport infrastructure show Peru lagging behind OECD members and some benchmark countries in transport connectivity. Improving transport policies nationally and in urban centres, in alignment with the national development strategy, can have a significant impact on inclusive development and quality of life in the country. This chapter provides background in transport connectivity and performance indicators in Peru. It then focusses on the need for a national transport plan to define transport policy priorities and the particular importance of developing a National Policy for Urban and Metropolitan Mobility. This chapter also studies connectivity needs in urban centres, focusing on the Lima-Callao metropolitan area, and highlights the benefits of governance by a world-standard metropolitan transport authority, as well as the necessary actions to harness benefits from being a port city. Finally, the chapter concludes with the main recommendations to improve connectivity in Peru and test them against the scenarios set out in .

  • Towards more formal jobs and economic activities in Peru

    To promote itself to a high-income country, Peru must address the pervasive, persistent issue of informal economic activity and employment in the country. This chapter analyses informality in Peru and provides policy recommendations to mitigate the negative impacts of informality and promote more formal jobs and economic activities. Informality generally involves lower job quality and labour conditions, leaving many workers in vulnerable situations. Costs of formalisation, linked to both wages and non-wage labour costs, only partly explain informality in Peru. Low productivity levels, strongly associated with low skills levels, mean workers are not sufficiently productive to overcome the current costs of formalisation. Coupled with an economic structure concentrated in low value-added sectors, where informality is the norm, there is little opportunity or incentive for formal job creation. Peru must revise, design and implement strategic short- and longer-term policy actions to redress the underlying structural causes and consequences of informality.

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