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EU-CELAC Innovact Platform: Innovation to Promote Territorial July 2019 EU-CELAC Innovact Platform: Innovation to promote Territorial Cohesion Mapping Report Border Area - Peru -Bolivia EU-CELAC Innovact Platform: Innovation to promote Territorial Cohesion Mapping Report Border Area - Peru-Bolivia July 2019 For any information regarding this document please contact: Alice Ruczinski (Perú) , Consultora asociada / Punto focal Perú-Bolivia [email protected] (+51) 971 160 524 Gonzalo Castellanos (Bolivia) , Consultor asociado / Punto focal Perú-Bolivia [email protected] (+591) 761 89975 Juan Carlos Salazar, Deputy Project Manager in LATAM, Technopolis Group [email protected] (+57) 320 2115880 ii Table of Contents Table of Contents ............................................................................................................................................. 3 Tables and Figures ........................................................................................................................................... 3 1 Summary in English ................................................................................................................................. 5 2 Resumen en español ................................................................................................................................. 6 3 The Context of the Border Area ................................................................................................................ 7 3.1 Perú-Bolivia border Integration Zone ................................................................................................................ 7 Figure 1: Perú-Bolivia Border Integration Zone ................................................................................................ 7 3.2 Bi-national Plans and other integration actions of the border area emphasising innovation ................................ 8 4 National Level Priorities on each side of the Border .................................................................................. 9 4.1 The two major areas of the Border Integration Zone Peru-Bolivia (ZIF-PB)........................................................ 9 4.2 Bolivia - Value chain support in the border area ............................................................................................... 10 4.3 Peru - Value chain support in the border area ................................................................................................... 11 5 Value Chain Mapping in the Border Area ............................................................................................... 13 5.1 Value Chain A: Amazonian mountain fruits ..................................................................................................... 13 5.2 Value Chain B: Fish-farming ........................................................................................................................... 17 5.3 Value Chain C: Tourism .................................................................................................................................. 19 6 Selection of Priority Value Chains ........................................................................................................... 22 7 Recommendations for Next Tasks .......................................................................................................... 23 7.1 Necessity of a narrow focus in the prioritized value chain ................................................................................. 23 7.2 Key stakeholder and possible champions ......................................................................................................... 23 7.3 Suggested location of the first bi-national working meeting .............................................................................. 24 7.4 Project management and logistics.................................................................................................................... 24 Contact Details of Interviewees .................................................................................................. 25 Bibliography .............................................................................................................................. 28 Main stakeholders mapping....................................................................................................... 29 Previous projects supported by the EU in Peru, Bolivia and the border region ........................... 32 Tables and Figures Figure 1: Perú-Bolivia Border Integration Zone …...................................................………………………… ............7 Table 1: Prioritization criteria in Border Region Peru-Bolivia………………………………………………………..22 3 Glossary ALT: Lake Titicaca Authority CAF : Development Bank Of Latin America CAN : Community of Andean Nations CITE: Centre for Productive Innovation and Technology Transfer EU : European Union GDP: Gross Development Product GOREMAD : Madre de Dios Regional Government GVA: Gross Value Added ICT: Information and Communications Technologies INPANDES: Participatory Regional Integration Project in the Andean Community IIAP : Peruvian Amazonic Research Institute LATAM : Latin America MYPES : Medium and Small Enterprises PDRC : Concerted Regional Development Plan of Madre de Dios 2014 – 2021 PEMDD : Madre de Dios Especial Project PISP : Productive and Industrial Strategy of Pando UAP : Amazonic University of Pando UNAMAD : National Amazonian University of Madre de Dios ZIF-PB : Zona de Integración Fronteriza Peru-Bolivia/ Peru-Bolivia Border Integration Zone ZOFRACOBIJA : commercial and industrial tax-free zone of the city of Cobija 4 1 Summary in English The prioritised area of the Peru-Bolivia Border Integration Zone (ZIF PB) extends over 371,182 km2 and is comprised of 2 distinct geographical zones: Andean (Puno, Tacna and La Paz) and Amazonian (Madre de Dios and Pando). The Andean sector represents 59.3% of the territory and gathers 96.2% of its population. Accordingly, the Amazonian sector presents a very low population density, of around 1.5 inhabitants/ km2. The main challenges this border area faces are: extreme poverty (mainly in rural areas); access to basic services (education and health, drinking water and sanitation); insecurity and violence; poor infrastructure and connectivity; environmental conditions under threat (deforestation and conservation of protected areas); value chains with insufficient added-value generation and low productivity. It is also a very extensive border zone where illegal activities (generating substantial direct and indirect incomes for local populations) have grown up continuously in the last decades: illegal foresting, illegal mining, coca production and drug traffic. The integration efforts between Bolivia and Peru took significant momentum since 2015, with the creation of Binational Ministerial Cabinets and the organisation of annual presidential meetings. Cross-border integration efforts have initially focused on the Andean sector, because of the major challenges in this area and population density. More recently, the Presidents of both countries expressed their commitment to strengthen cooperation in the Amazon sector. Through this political will and with the support of CAF (LATAM Development Bank), an "Integration Plan for the Development of the Amazonian Sector of the ZIF-PB" - including a proposal of regional strategy of smart specialisation - was elaborated and adopted in 2018. It is now in its implementation phase. Following this guideline, the ministries of foreign affairs of both countries have prioritised the Amazonia sector of the ZIF-PB for INNOVACT II implementation. The primary three cross-border value chains identified in this area are Amazonian mountain fruits, tourism and fish-farming. For each one, an analysis was carried out, based on desk work and semi-structured interviews to relevant local stakeholders, aimed at the identification of: key characteristics and economic indicators; mapping of key players; main challenges and barriers to development and; opportunities for cross-border collaboration. Work followed by a value chain scoring and prioritisation assessment against relevant indicators. The Amazonian mountain fruits value chain — with a focus on Brasil nut (Castaña), asaí, copoazu and cocoa, — along with the tourism value chain obtained the highest scores in the prioritisation. Evidencing relevant critical mass, favourable local conditions, the potential to generate economic diversification and reinforce the cross-border cohesion in this sector of the ZIF-PB. The Amazonian mountain fruits value chain already represents one of the main sources of income in the border region. Mainly for the activities linked with the collection and processing of Castaña, product in which Bolivia and Peru are the world's leading exporters (Eur 226 million in 2018, combined exports). Regarding Asaí, copuazu and cocoa, production is limited and mainly commercialised in the local and national markets. However, the private and public interest is growing for these products driven by increasing demand on the world market and the extension of its applications, in other countries, on the healthy eating, cosmetics, and pharmacy segments. There are various opportunities for cross-border collaboration in the different link of this value chain for the transformation of sustainably-harvested amazon fruits into products with higher added value. On the other hand, tourism is one of the activities with greater potential in
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