Street scene in Lima

Peru Cooperation for democracy, climate action and resource conservation

Since the turn of the millennium, Peru has evolved from being a virtually failed state to become a model for democratic stabilisation and, at the same time, achieved impressive economic growth.

Great progress has been made in lifting people out of poverty. In 2006, almost half the population was living below the national poverty line. Today only around one in five people count as poor.

However, there are stark social and regional differences. Whilst, in 2014, the poverty ratio in urban areas was 15 per cent, in rural regions it was as high as 46 per cent. Large numbers of people are often still excluded from the positive developments that have taken place. Moreover, the state’s weak presence and capacity in remote regions is a key challenge for the country’s sustainable development.

Natural resources as a basis for economic success

Economic growth is largely based on exploiting the country’s natural and mineral resources. Conflicts between different population groups and even with the state over the use of resources are a regular occurrence.

Peru has the fourth biggest area of tropical forests on earth and is one of the world’s most biodiverse countries. However, its rapid economic development is also contributing to the destruction of these natural assets. Logging, slash-and-burn cultivation and illegal mining in particular are threatening to destroy parts of the Amazon rainforest.

Development cooperation

Germany and Peru have a long, shared history of development cooperation. Peru has traditionally been a focus of German development cooperation in Latin America. German-Peruvian cooperation is fully aligned with the development goals of the 2030 Agenda for Sustainable Development. The focus is on managing natural resources and protecting global public goods in times of climate change, environmental and climate protection in cities, and strengthening democracy, civil society and the rule of law.

Lima Cathedral

Recent history: turbulent times Internal link

The 1980s were overshadowed by the terrorist activities of the Maoist guerrilla movement known as Shining Path. Then came an authoritarian government, led by President Alberto Fujimori. In 2001, Peru returned to the path of democracy. Since then, the country has seen five democratic changes in government.

View of Lima

Success in reducing poverty but social inequality remains high Internal link

In Peru, wealth and income are very unevenly distributed. A large number of Peruvians still depend on subsistence farming or on poorly paid jobs in the informal sector for a living.

An older woman peeling a mango by the side of a street

The benefits are not felt by everyone Internal link

Between 2002 and 2013, Peru’s economy grew by an average of 6.1 per cent. In recent years, economic growth has slowed down, particularly because of falling commodity prices, e.g. for copper, and the economic impact of the “El Niño Costero” climate phenomenon, which caused heavy flooding in 2017.

Glaciers in Huascarán National Park, Peru

Progress on environmental protection, risks caused by climate change Internal link

The Peruvian government has been stepping up efforts to align economic development with the country’s social and ecological needs. As a result of its geography, Peru is especially affected by the effects of climate change.

German development cooperation with Peru

Peru and Germany share a long history of successful cooperation. In the 2015/2016 commitment period, Germany pledged 244 million euros in new funds to the Peruvian government. Of this sum, 215 million euros was allocated to Financial cooperation and 29 million euros to Technical Cooperation. In view of Peru’s economic strength, the commitments were primarily in the form of low-interest loans.

Development cooperation between Germany and Peru is aligned with the 2030 Agenda and focuses on the following three priority areas:

  • environmental policy and protection and sustainable use of natural resources
  • sustainable urban development in times of climate change
  • democracy, civil society and public administration.

In addition, Germany is also providing development assistance by supporting various regional and sectoral projects and programmes in a large number of areas, including mining and illicit financial flows. Moreover, Germany is promoting various collaborative initiatives with private executing agencies, political foundations and businesses. In triangular cooperation initiatives, Peru is able to pass on its experience from German-Peruvian cooperation to other developing countries.

Within the German government, activities are closely coordinated with the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, which is also extensively involved in Peru within the framework of the International Climate Initiative.

Amazon rainforest in Peru

Protecting tropical forests through sustainable forestry Internal link

Peru has the second largest area of tropical rainforest in South America. These forests not only provide a livelihood for many people but are also of pivotal importance for the global climate.

Street view in Sullana, Peru

Making infrastructure fit for the future Internal link

Today, around 79 per cent of Peruvians live in cities, and almost a third of the population lives in the greater Lima region (about ten million inhabitants).

Justice Palace in Lima, seat of the highest court in Peru

Building administrative structures that are responsive to people's needs Internal link

The modernisation of administrative structures in Peru has not kept pace with the country’s rapid economic development. Germany is assisting the government of Peru in its efforts to fundamentally modernise the state and to develop the capacity of its institutions.