USAID builds alliances to expand the impact of its PRA model to boost competitiveness and fight poverty in Peru

PRA rapidly exceeds the life of project’s GDA leverage target in first year of second phase operations

PRA Champion Roque Benavides at PRA second stage launch event: “USAID opened the access door to opportunities for Sierra people. This is not only about funding but empowering people to manage and use their own potential. And that is what the PRA Project does. So I am very happy that finally, after insisting so much in the need of a second phase for PRA, we are witnessing this new start. This is the type of activities we require and we have to support: proven programs to promote entrepreneurship and micro and small enterprise growth so much needed in our country”.

After its first phase, which lasted just under 10 years, and having achieved significant results, such as more than US$300 million new sales and 82,000 new jobs created, the Poverty Reduction and Alleviation Project (PRA) started its second phase in September 2009 with the bar set very high in terms of sales, jobs and investment targets for a five-year period. But the key main challenge for this new stage was ensuring sustainability of PRA’s Economic Service Centers over the long run. Building Global Development Alliances (GDAs) with resource partners was a new fundamental task to be heavily undertaken by the Project. The Project was required a leverage of at least US$4 million in GDAs or private-public partnerships over the life of the project.

During the first year of operations in this second phase, the Project worked very hard to commit and leverage financial resources from 9 private organizations: mining companies Buenaventura, Antamina, Minsur, Raura, Los Quenuales, Barrick, and Poderosa; the Clinton Foundation; and Odebrecht Perú construction company. By the end of FY 2010, USAID had signed 7 memoranda of understanding with these partners for a total of US$4.26 million leveraged funds. Additional committed funds amounting to US$878.5 thousand will be available through two more MOU with USAID to be signed by the end of calendar year 2010. Funds leveraged from private resource partners are 142% those provided by USAID.

A key success factor for such a rapid fulfillment of the GDA target has been the project’s ability to demonstrate its successful collaboration with mining companies Buenaventura and Antamina during PRA’s first phase and their permanence over time. A second key success factor has been the assertive advocacy of the benefits of the USAID-PRA model by PRA champions, such as Roque Benavides, Buenaventura’s General Manager, a renowned business leader committed to local economic development and the fight against poverty. Since the first alliance of USAID and Buenaventura was signed in 2002, his continuous support to the project has been critical in disseminating the impact of a demand-driven economic development project in diminishing the levels of poverty in rural areas of Peru.
A third key success factor is PRA’s value proposition to prospective partners which shows the possible outcomes and synergies that can be attained by working together in boosting production by small and micro producers in poor areas and articulate them with markets as a means to help them overcome poverty. The 4 strengths of this value proposition are: 1. a valuable expertise build over a nine-year first phase period; 2. an operating model based on solid principles: demand-driven approach, private sector-led, decentralized implementation throughout regional corridors, and result oriented; 3. accountability; and 4. USAID’s long standing and strong capabilities and support.