& IaS-:), 0 Co DEVELOPMENT STRATEGIES forthe 21st century: the case of Peru Coordinator: Francisco Sagasti agenda: PERU D Monitor Development Strategies for the 21st century: the case of Peru © AGENDA: PERU Av. Manuel Olguin 533, Of. 403-404, Lima 33 - Peru - Apartado Postal 18-1194, Lima 18 - Peru Telefono: (51-1)437-3792 Fax: (51-1) 435-0410 E-mail: [email protected] Pagina web: www.agendaperu.org.pe This edition was made possible through a grant from the International Development Research Centre, IDRC (Canada). First published in Spanish by Editorial Apoyo, November 2000. This edition by Peru Monitor S.A., May 2001 Diego Ferre 387, Miraflores, Lima-Peru Tel: 445-0525 Fax: 446-0111 Email: [email protected] ISBN: 972-760-05-7 Legal deposit: 1501222001-1655 Printed by: PERFECT WORK Tel: 242-8165 Telefax: 241-1121 Index Preface 17 Coordinator's note 19 PART ONE: INTRODUCTION AND CONTEXT Chapter 1: The starting point Life in Peru: crisis and promise 25 Evolution of the idea and practice of development 27 Futures of the past and shared aspirations 29 Visions of the future Peru and notions of the common good 32 Development strategy and democratic governance 35 Crisis, strategy and promise at the start of a new century 36 Chapter 2: Peru in the new international arena Introduction 43 The fractured global order 43 Globalization, ideology, the State and foreign policy 47 Toward active management of international insertion 51 Economic insertion and productive transformation 52 The international dimension of social policies 54 The international dimension of environmental management 59 International implications of territorial organization 60 Some consequences for foreign policy 61 PART TWO: A FRAMEWORK FOR STRATEGIC DECISIONS Chapter 3: Productive transformation and competitiveness Introduction 69 Macroeconomic policy 71 Stabilization and reforms in the 1990s 71 - The stabilization program 71 - Structural reforms 73 - Financial reinsertion 74 Macroeconomic policy and development strategy 74 - Fiscal policy and public finances 76 - Monetary and exchange rate policy 77 - Financial system and domestic savings 78 - Trade policy 80 - Institutions and regulation 81 Sectoral policies 81 5 Index Farming and stockbreeding: the challenge of productivity 82 - Regional differences 82 - Increasing productivity 83 - Funding agricultural activities 85 - Food security and farming production 86 - Irrigation projects and price policies 86 Mining: toward world leadership 87 - Promotion of mining activities 88 - Support for medium and small mining 89 Fishing: the challenge of sustainable development 90 - Sustainable use of fishing resources 90 - Investment in the fishing sector 91 - Promotion of human consumption of fishing products 91 Tourism: Peru as one of the world's main destinations 92 - International and domestic tourism 92 - Diversification of tourist destinations 93 - Tourism infrastructure and institutional' framework 94 Energy generation: linking demand and reserves 94 - Hydrocarbons: reserves, exploration, production and imports 95 - Privatizations and the promotion of investment in hydrocarbons 96 - Electricity: changes in the structure of the sector 97 Industry: the challenge of reconversion and competitiveness 98 - Evolution of Peruvian industry 98 - Toward an efficient and competitive industry 99 Civil construction: multiplier effect, employment and linkages 102 - Anticyclical policies, business development and public investment 102 - Housing construction 103 - Employment generation and links 104 Chapter 4: Integration, equity and social justice Introduction 109 Coordination between the state, the private sector and civil society 112 Demographic transition and social policies 113 Provision of basic social services 114 Education 115 - Teacher training 118 - Better teaching methods and curricula 119 - Education, science and technology 119 - Decentralization and differentiation in state education 119 - Reform of the education system structure 120 - Early childhood care 120 - Higher education and training for development 121 Health, nutrition and sanitation 122 6 - Food security, nutrition and health 124 - Toward a national health policy 124 - Broadening coverage and the state's role in health services 125 - Toward a pluralistic, equitable and efficient health system 126 - Sanitation and potable water 127 Housing 127 - Strengthening the legal framework and property rights 128 - Financing and mortgage loans 129 - Subsidies and infrastructure development services 129 Poverty reduction 130 Targeting efforts and elimination of endemic poverty 130 Lessons in poverty reduction 132 Strengthening the institutional framework 133 Promotion of local and regional development 134 Employment generation and broadening access to goods and services 134 * Employment generation in the formal productive sectors 137 Improving employment quality in the parallel economy and self-employed sectors 138 Innovations in employment generation and access to goods and services 139 Chapter 5: Management of the environment, natural resources, science and technology Introduction 145 Environment and development: approaches, sustainability and policies 146 Approaches to environmental management 146 The concept of sustainable development 148 Explicit, implicit and resultant environmental policies 149 Natural resources: potential, use and conservation 150 The value of biodiversity and environmental services 152 Forestry resources 156 Fishing resources 158 Land as a natural resource 161 Water as a natural resource 162 Mineral resources 164 Energy resources 166 Reducing environmental pollution 168 Solid waste 169 Air pollution 170 Water pollution 171 Design and implementation of environmental policies 172 Institutional development 173 Regulation and control of market incentives 174 7 Index Information systems, research and technical assistance Citizen participation Scientific research and technological innovation The information society and its techno-economic paradigms Development of science and technology in Peru An emergency plan Technological innovation systems Technological pluralism and traditional knowledge Chapter 6: Territorial organization Introduction Territorial ordering Environmental diversity and territorial classification Conflicts in the use of space Watersheds and territorial ordering Consolidation and articulation of economic spaces in the regions Urban and rural development planning processes Cities as engines of development Development of rural areas Geographical information systems Construction and maintenance of physical infrastructure Land transportation Port infrastructure Airports and commercial aviation Energy transmission and distribution Telecommunications development PART THREE: INSTITUTIONAL REFORMS, IDENTITY AND CULTURE Chapter 7: Institutional reforms and democratic governance Introduction Utopias and governance - Beyond the four utopias - The imperative of democratic governance Reform of the State The role of the State: in search of consensus - The general function and size of the State 8 - Reforms of the State in Peru 224 - Major problems of the State at the start of the 21st century 225 Reform of the Executive Branch 230 - New organic structure of the Executive Branch 230 - Reordering the ministries and related agencies 230 - A new relationship between the president, the prime minister, the ministers 231 and the secretaries of state - Levels of responsibility in public management 232 - Human resources for public management 233 - Public managers 233 - Advisors in senior public management 233 - Experts on public management issues 234 - Personnel reduction and job reconversion 234 - Allocation of resources and management of public expenditure 234 - Budget management, evaluation and expenditure control 234 - Regulatory systems in the Executive Branch 235 - Regulation of natural monopolies 236 - Regulating the use of natural resources 236 - Regulation of financial institutions 236 - Regulating competition and protection for intellectual property 236 Reform of the Judicial Branch 237 - Autonomy and self-government 238 - Providing judicial services 238 - Codes of procedure 238 - Justices of the peace, community justice, arbitration and conciliation 238 - Selection, appointment and promotion of magistrates 239 - Toward an authentic judicial reform 239 Reform of the Legislative Branch 239 - Restoring the bicameral Congress 240 - Chamber of senators 240 - Chamber of deputies 241 - Strengthening the parliamentary jurisdiction 241 Reforming the electoral system 241 - Presidential election 242 - Parties and political movements 242 - Foundation and disappearance of parties and movements 242 - Standards for internal functioning 243 - Financing the parties 243 - Electoral campaigns 243 - Electoral organisms and processes 244 Deconcentration, decentralization and regionalization 244 - Priorities for decentralization 245 9 Index - Options for regionalization 245 - Decentralizing the Legislative and Judicial Branches 247 Reform of the private sector 247 The private companies 248 - The large company 249 - The medium-sized company 249 - Small and micro companies 250 Reform of civil society organizations 252 Civil society 252 - A plural civil society 253 - Relationships between civil society and the State 255 - Youth and student organizations 256 - Civil society, power and State: reforming political parties and movements 259 Reform of the security institutions 260 The security institutions 260 - Civilians, military and national defense 261 - Militaryjustice