Italian development aid in brief

1. Framework and motivations for the presence of the Italian Cooperation

This introductory section of the document provides indications on why Perú is a priority country for the Italy programming. It provides a brief overview of the socio-economic and political information on the presence of the Italian cooperation in the country and on the purposes that underlines such presence. It may provide directions on the existing bilateral framework: Country Programs, Agreements and MoUs signed (or ongoing) with the country.

The Italian Cooperation in Peru was formally launched in 1981, with the signing of the ¨Accordo di cooperazione tecnica¨ between the Italian and the Peruvian Governments, and later expanded by the Economic, Industrial, Scientific, Technological, Technical and Cultural Cooperation Agreement of 1991. Nevertheless, and despite the presence of Italian NGOs dates back to the 60s and 70s, the cornerstone around which the Italian commitment in the Country did – and still does – gravitate is represented by the Debt Conversion Agreement, signed in 2001 and 2007 (and recently renewed until 2017), which allowed, up until now, and through the creation of the Italo Peruvian Counter-value Fund (FIP), the conversion of the non-commercial debt into more than 200 development projects for approximately $200 million.

Another critical step is constituted by commitments made by Italy in support of the peace process in the wake of the Brasilia Accords of 1998, which sanctioned the end of a series of low intensity conflicts with Ecuador that began in 1941, and which intensified in 1995 due to the outbreak of the War of Cenepa. In addition, in August 2007, Italy had immediately responded to the Peruvian Government´s call for help as a result of the disaster caused by the earthquake in Pisco, which struck the region south of Lima, causing, according to official figures, 595 deaths and almost half a million displacements; the involvement of the Italian cooperation consisted in the funding of an emergency and recovery initiative in the Province of Chincha, then extended until 2010.

In this context, Italy has accompanied the growth of the country during the last 15 years, consciously adapting the tools of intervention to the specific contingencies, and turning over the course of time from an economic cooperation, based upon measures of direct management, into eminently technique cooperation, based on the concepts of capacity building and enhancement of local ownership. Thanks to the progress made, Peru is nowadays considered an upper-middle income country, and from 2012 it is no longer a priority country of the Italian Cooperation. However, because of the profound imbalances that still remain in the country, and ahead of a reasonable macro-economic framework, the Italian Cooperation maintains its commitment to the country. Indeed, recently the Italo Peruvian Fund has published a call to convert an additional 30 million Nuevos Soles, about U.S. $ 13 million, into development projects. The Italian bilateral commitment in one of the strategic sectors for the regional Local Technical Unit (UTL) of La Paz, the health sector, continues through the implementation of the Second Phase of the Programme of Health Care Co-operation in favor of the Binational Development Plan Ecuador-Peru and the Third phase of the Programme of Technical Assistance to the Ministry of Health of Peru. Finally, we are currently negotiating two soft loans with extremely favorable terms with the Peruvian Government, for a total of 15 million euros.

2. Other major international donors, coordination and possibility of division of labor, joint evaluation exercises (harmonization) 

The evolution of the country in recent years, with the achievement of the status of upper-middle-income country, has resulted in the repositioning of several international donors. For this reason, Governmental Cooperation partners such as Britain and Sweden have left the country, as well as large non-governmental cooperation agencies such as Oxfam. Similarly, several partners are choosing the country as a regional base for the coordination of their efforts in the Andean area. However, in virtue of the persistence of tragic situations in the forest and the Andean department, where the percentages of poverty and social exclusion are reaching up to 70% of the population, there still remains a massive presence of both bilateral and multilateral donors.

The Spanish Agency of Cooperation, AECID, confirms itself, despite the cuts, as the main bilateral donor. It is worth mentioning, in addition, the historical presence of USAID, the Belgian Cooperation, and the German GIZ. At the multilateral level, the EU, the Development Bank of Latin America (CAF) and the Inter-American Development Bank (IADB) are the main donors. The channels of cooperation most used by the EU are general budget support (GBS) and sector budget support (SBS).

The coordination and harmonization of the different non-refundable initiatives of development cooperation are entrusted to the Agency of International Cooperation (APCI) of the local Ministry of Foreign Affairs. Instead, as far as reimbursable cooperation is concerned (soft loans and counter-value funds), this pertains to the Ministry of Finance. There are tables of thematic coordination. Italy coordinates along with the PHO and the Belgian Cooperation the Health sector table, and regularly participates in the Forum on Human Rights.

Italy actively participates in the exercises of joint evaluation of initiatives, coordinated  by APCI within the framework of the Aid Effectiveness Agenda and the subsequent updatings.

3. Further expressions of the Italian Cooperation System in the country (NGOs, universities, local authorities, private sector) and possible methods for their involvement

Italian NGOs, as noted, were the first Italian actors to operate in the country, before the formalization of the Framework Agreement of 1998. Currently 18 NGOs are present and gathered in the COIPE (Coordination of Italian NGOs in Peru). Today two NGO projects are still running: the initiative "Integration as Training: strengthening the IDEAL Center in favor of vulnerable groups," implemented by the NGO DOKITA on the outskirts of Lima, and "Renewable Bio-managed Energy¨, implemented by the NGO Apurimac, in the department that carries the same name. Also, forms of synergies between the DGCS and the Italian non-governmental channel have been articulated through the trust fund that Italy has opened at the Development Bank of Latin America - CAF. Two initiatives from two NGOs are currently funded through this financial instrument: NGOs CESTAS and ICU, respectively, in the areas of community health and rural development.

All of the above, without forgetting the FIP, which is still considered as one of the points of reference for the Italian NGOs operating in the country.

Alongside the non-governmental channel exists the channel of University Cooperation, specifically the University Center for International Cooperation of the University of Parma, which, with a direct contribution of the DGCS, is currently implementing the ¨Sacha Inchi¨ initiative, aimed at enhancing local production by strengthening the policies of food security. This initiative counts with the participation, as implementing partner, of the NGO Terre des Hommes Italy.

Furthermore, the following bilateral initiatives currently under implementation are worth a special mention: 

• Programme ¨Social and Health Care Cooperation in support of the Bi-national Development Plan Peru – Ecuador¨, Phase II, which, through the realization of training, infrastructure and institution building activities helps consolidating the first bi-national health system in the region;
• The directly managed Bilateral Programme of Technical Assistance to the Ministry of Health of Peru, Aid 9344, in the process of entering its third phase. The initiative has managed over the course of the years to become the institutional platform needed to channel the expertise of the Italian university system, with the realization of missions of faculty and staff members of the University of Parma, Milan's Bocconi and the University of Rome.

During the next three years, and in view of the beginning of the mechanism of soft loaning, it will finally be important to fortify the Italian system through the use of the linked components, dedicated in these cases to actions of technical assistance and training.

4. General objectives of the Italian cooperation in the country, their sharing with the counterparts and their consistency with the international guidelines for development effectiveness

The general objective of the activities of the Italian Cooperation for the period 2013 - 2015 will be to support the Sectoral Development Plans developed at central and local level by the Peruvian authorities, within the framework of the Paris Declaration, the Accra Accords and as reiterated in Busan.

The Italian Bilateral Cooperation currently participates by supporting two priority areas:

• Public Health - Frontier Health, by pursuing the following specific objectives: ensure the smooth functioning of the bi-national integrated health system, strengthened and expanded, with the health personnel properly trained, in order to better their approach in terms of quality and interculturalism; provide technical assistance to the Peruvian Ministry of Health, as part of the implementation of the "Reforma Nacional del Aseguramiento Universal en Salud";
• Microcredit, fostering policies of inclusion and financial literacy.

The Italian objectives and methods of intervention are shared with the local counterparts, both in the formulation and the implementation phases.

The Italo Peruvian Fund contemplates a form of co-management through the presence of an Italian co-director and his Peruvian counterpart. The participation of the civil society is guaranteed both by the constant activity of connection of the Italian NGOs and by the FIP itself, which, through the structure of the Technical Committee, requires the presence of representatives of the civil society and of the Peruvian indigenous communities.

5. Priority areas of intervention and expected results

Following the consultations carried out by the UTL and the Italian Embassy in Peru with national counterparts and international stakeholders, the following areas of intervention have been identified:

• Healthcare and Public Health
• Microcredit and Microfinance
• Institution Building and Institutional Strengthening

For the period 2013-2015, the following initiatives are planned, divided by area of ​​intervention:

Health and Support to Health Care Reform Processes (€ 13,673,164.03): 

• Programme "Social and Health Care Cooperation in Support of the Bi-national Development Plan Peru - Ecuador Phase II." The amount, not yet transferred, related to the activities to be carried out in Peru –  both for the component of budget support and for the fund on the spot – is € 943,716.33.
• "Program of Technical Assistance to the Ministry of Health of Peru - Aid 9344." The activities already underway are intended to be concluded, for a total amount of € 296,250. This amount is the result of the balance of the experts fund for the first two phases, of the fondo in loco recently approved for Phase III, and of a IV phase scheduled for 2015.
• Soft Loan for a Programme of "Extension of the Integral Services of Prevention and Attention of teen pregnancy in the regions of Ucayali, Loreto and Amazonas", for an amount of € 7.5 million.

Microcredit and Microfinance (Euro 7,600,000): 

• "Programme of financial and productive inclusion through the instrument of microcredit in the departments of Apurimac, Ayacucho and Huancavelica," in favor of the Financial Bank for Development (COFIDE), funded by a Soft Loan of €7.5 million, and a donation component of €100,000 for the establishment of an expert fund. The duration of the project is three years.

Institution Building (Euro 300,000) 

• The Italian technical assistance to the Programme of Debt Conversion is expected to continue during the three-year period. It is believed that the Italian expenditure commitment will rest on a total amount of 300,000 Euro for the 3 year period, as a result of the balance of phase I and II and the accreditation of Phase III and IV, divided between the experts fund and the in loco fund.

Italy will continue to promote and support the structuring of the Italian System, facilitating the intervention of non-governmental and decentralized cooperation and their synergy with initiatives of the governmental cooperation, both Italian and international, in the health sector, but also in the area of social inclusion, environmental protection and sustainable development.