A Closer Look at Peru's poverty policy



Jelke Boesten, Department of International Development, King’s College London

Peru is widely lauded for its rapid poverty reduction from 58.7% of the population in 2004, to 21.8% in 2015. Recently, the country was in the news for its successful tackling of child stunting. As many emerging economies in Latin America, the country has experienced high growth rates in the last couple of decades: from 5.5% in 2002 to 9.5% in 2008 and down to 3.5% in 2016. Peru has also diversified its markets and its exports and is not solely dependent on the Chinese or US markets for minerals, so the future looks bright.

In the meantime, Peru has pursued a policy of inclusive growth, the idea that economic growth must go hand in hand with redistribution. During the 2000s and particularly the last ten years, governments have implemented a range of social policies, including a housing support for the lower middle classes, subsidies for water and gas supply in new urban neighbourhoods, benefits for the elderly and the young, health insurance for employees, including domestic workers, and a cash transfer programme for the poorest. It is the latter programme, Juntos, that is generally credited with the rapid poverty reduction of the last 10 years.

Juntos is a Conditional Cash Transfer programme that targets mothers and children in poor rural households. It gives households extra cash to spend on improved nutrition –hence the reduction in stunting- under the condition that mothers take their children regularly to health services, and that all children attend school until they are 18. Pregnant women also have to attend antenatal care regularly. The statistics that monitor the programme are impressive: income poverty reduction is accompanied by near 100% school attendance and healthcare take up among beneficiaries. Women are clearly complying with the conditions and this is leading to improvements in household nutrition.

The idea of inclusive growth aims to draw marginalised people into the booming economy and make poverty reduction sustainable. The conditions tied to the cash transfers are meant to break the cycle of intergenerational poverty. While such an approach, and the measured success of the Peruvian case, are indeed laudable, we also need to be cautious: qualitative research shows that the way in which such programmes are implemented tends to reproduce inequalities between poor women and the mestizo civil servants because of the power invested by those who distribute money, and those who need to walk long distances, stand in line and wait hours in the sun and the rain, present paperwork, and generally show compliance. Counterproductively, inequalities based on ethnicity, socio-economic position, and gender are reproduced by the implementation of the programme itself.

Of course, targeting mothers because they are trusted to spend it on the children, rather than waste it on leisure (as men apparently do), might be effective in terms of income poverty reduction, but it does little for gender equality. Women are targeted as mothers and mothers only, and are required to behave a certain way to comply with the tick boxes of statistical verification of programme compliance. In addition, the process of distributing the cash often includes small acts of humiliation and disrespect. Local programme managers also tend to impose shadow conditions that demand even more time commitment from mothers. In addition, while the statistics show that women and children do attend both schools and health centres, the same qualitative research shows that these services are very poorly staffed and supplied, raising questions about the reality of breaking the cycle of intergenerational poverty.

Sustainable poverty reduction must move beyond framing poverty in terms of income and aim for a reduction in social inequalities and improved opportunities for all regardless of gender, ethnicity, or location. Peru has drawn millions of people out of poverty in the last ten years. It provides a fine example to other emerging economies of how a well-designed cash transfer programme can help poor families to move beyond a focus on immediate survival. However, reducing income poverty alone cannot address the long term social problems that Peru continues to face.