The Poverty Reduction and Alleviation Project (PRA) is an initiative of the U.S. Agency for International Development (USAID) in Peru (USAID-PERU). It aims at contributing to poverty reduction via sustainable job in the peruvian andes and revenue creation in poor areas, with an entrepreneurial and demand-driven approach.

We believe that the most effective and sustainable way to create incomes and jobs is through the development of private businesses with economic potential. The PRA focuses on the identification and elimination of obstacles faced by economic agents to supply their markets efficiently.

 

The PRA’s work is based on four basic principles:

1. Demand is the engine that drives economic development in areas that are poor but have economic potential. It is demand that moves economic agents ¾entrepreneurs, producers, etc.¾ to invest, accumulate, and develop. The principle is to produce what you can sell, instead of the traditional approach of trying to sell what you produce. The starting point is identifying a secure and specific market with real buyers; from then on, it is our job to eliminate obstacles to supplying that market efficiently.
2. The main role in poverty reduction lies with the private sector, which must create job opportunities and promote sustained income growth. The government’s role is to support the private sector with basic infrastructure (roads, energy, irrigation, etc.) and provide a sound and reliable legal environment.
3. Our offices are decentralized and promote businesses in areas with economic potential, from which economic momentum is expected to spill over to poorer areas in the form of demand and job opportunities. In this way, a complementary relationship emerges between large and small towns within a Corridor: the former provide access to larger markets, while the latter supply them with inputs and labor.
4. Emphasis on the quantification of results. A distinctive feature of our work is our concern with meeting our targets and quantifying progress. We assess our relative success or failure on a periodical basis through a system of specific, quantifiable indicators: new sales, new jobs, and new investments induced by the impact of the project on our clients.

PRA Project 1998-2008

The PRA initiated activities under the Cooperative Agreement signed by CONFIEP and USAID on September 30, 1998, which lasted until March 30, 2001. From April 1, 2001, Chemonics International Inc. took over as the PRA’s direct executor. This initial phase of the PRA had two components: PRA Businesses and PRA Infrastructure.

In addition to the work with high-potential businesses, PRA Businesses had the specific mission to promote businesses in “Alternative Development” areas, forest certification, and native communities in the Peruvian jungle.

PRA Infrastructure promoted the use of Private-Public Partnerships (PPPs) to finance public infrastructure works. In particular, concession arrangements were used to mobilize private sector financial and managerial resources.

Phase 1 concluded in 2008 with the expiration of the agreement between USAID and Chemonics. However, the Ancash and Huancavelica ESCs continued to operate thanks to the contribution of Compañía Minera Antamina and the Clinton Foundation, in the case of Ancash; and of Compañía de Minas Buenaventura, in the case of Huancavelica.

PRA Project 2009-2014

On September 28, 2009, USAID launched Phase 2 of the PRA Project, once again implemented directly by Chemonics International Inc. In this phase, the PRA continues its mission of supporting the development and growth of private businesses.

In contrast with Phase 1 of the PRA, intervention zones are not predetermined. Based on the successful experience of the partnership with Compañía de Minas Buenaventura and Compañía Minera Antamina (which co-financed the Huancavelica and Ancash ESCs, respectively), USAID now seeks to replicate this scheme throughout the Peruvian Sierra and Selva. In addition to the companies already mentioned, MINSUR (ESC Puno), Odebrecht (ESC Cusco-Madre de Dios), Raura, Quenuales, and Cía. de Minas Buenaventura (ESC Lima Sierra Norte) have also become our partners.

This new phase of the PRA does not include either the infrastructure or the alternative development components. Forest certification may become a business component in certain Corridors like Cusco-Madre de Dios.