Creation of Regional Development Agencies (RDAs) in Peru

Over the past decade, Peru has been one of the region’s fastest-growing economies, with an average growth rate 5.9 % in a context of low inflation (averaging 2.9 %). But currently, GDP growth is slowing down, which has stimulated the Peruvian Government to implement various policy reforms.

An OECD Territorial review (2016) explains that: “Regional policies are particularly important for Peru, which has the fifth-largest land mass when compared with OECD countries. Peru has a diverse economic geography with unrealised potential in its cities and rural areas. Coastal regions tend to have better socio-economic conditions than uplands and rainforest regions in the interior of the country. These different areas are not well connected and have vastly different levels of service provision and infrastructure. In terms of population, Lima is the fifth-largest urban area in Latin America and dominates the economy and population of the country. Given its size relative to other cities, there is scope for additional agglomeration benefits by addressing problems associated with informal settlements and pressures on the transport network. Better adapting national policies to the circumstances and needs of these different regions is a key challenge for Peru.

The regional dimension will need to be taken into account as Peru continues to develop its economy. Peru decided to undertake this review to ensure this territorial dimension is reflected in future policies to lift the productivity and competitiveness of the country. This includes ensuring that subnational governments have the capacity and tools to deliver on this agenda.”

In 2017, the Peruvian National government decided to support Regional and Local governments to promote economic potential and social capital in their territories. An instrument of choice is Regional Development Agencies (RDA), which are well established in OECD countries. The RDAs shall be established first in three pilot regions (Apurímac, Piura and San Martín), and after that created in all regions.

The European Union and the German Development Cooperation (GIZ) are supporting this process and co-sponsored an international seminar on September 20 and 21 in Lima on the experience transfer in territorial development.

In the opening session, the President of the Council of Ministers, César Villanueva, affirmed that "a country like Peru, which has traditionally and historically been a centralist, has to move towards a process of decentralisation. We have been working for sixteen years on this effort, we have made important progress, no doubt about it, but fundamentally we are not there yet, because we still imagine development from a more sectoral perspective.” He added: “What we need is to incorporate a territorial vision”.

Dr. Ulrich Harmes-Liedtke of Mesopartner was one of the invited experts and spoke about the German experience with RDAs. He warned against searching for an ideal RDA-model, because this does not exist. Rather, the institutionalisation of territorial development must always be adapted to local circumstances and needs. Therefore, in Germany, there is a great variety of development agencies, which are often hosted jointly by public, private and societal groups. Other experts referred to RDAs in different European and Latin American countries and confirmed the idea that there is no one- -fits-all solution.

The importance of the event was highlighted by the participation and interventions of Perú’s President, Martín Vizcarra, who was governor of a region himself and understands the need to enhance territorial capabilities in order to promote development. The president said that in the three levels of government there is sometimes no prioritisation to start working on what is most necessary and, therefore, he suggested including the private sector in this process.

Mesopartner is committed and will continue to support the policy and institutional transfer process. Currently, Frank Wältring and Ulrich Harmes-Liedtke are working on a study for the Peruvian Government on behalf of GIZ about two RDAs in Germany. The experience of the prosperous Münsterland and the structural change in the energy region Lausitz will be presented at the end of this year. At the beginning of next year there are plans for a study tour to Germany with Peruvian officials from National and Regional Governments and representatives of the private sector.