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Securing Private Investment to Help Peru's Poor

The USAID Poverty Reduction and Alleviation project helped secure more than a million dollars from a private company to fund business development programs in Huancavelica, one of Peru’s poorest departments.

​From 1999 through 2008, the project operated economic service centers in 10 economic corridors throughout Peru — geographic areas linked by the movement of goods, services, and people. The success of the centers, which raised income and private investment in economic corridors, caught the eye of one of Latin America’s largest gold and silver mining companies, Compañia Minera Buenaventura. Wanting to give back to the communities where it works, Buenaventura funded an additional economic service center in Huancavelica, the hub of its operations, under a cooperation agreement with USAID.



Buenaventura will have provided more than $1 million over four years to finance the Huancavelica center. Under the project’s technical direction, the center operates due to the efforts of a private university and two Peruvian private voluntary organizations. Like the other centers, it provides information on markets, facilitates trade through contacts between buyers and local producers, and identifies companies willing to invest in local enterprises.

Since it began working in the 10 economic corridors, the project helped increase the net sales of producers by more than $17 million, create 2.3 million days of employment, and boost total investment by more than $2.4 million.
 
USAID showcased the initiative as an example of successful partnership under its Global Development Alliance. Introduced in 2001, the alliance seeks to maximize the impact of development assistance by pooling the ideas and resources of the public and private sectors. The project also received accolades from an independent panel of judges in a nationwide competition for “creativity in development.” The prize recognized the project’s innovative approach to poverty reduction.
 
The project boosted income and private investment by helping clients respond to specific market-driven demands. More importantly, it generated sustainable jobs, which is the permanent solution to poverty.
 
The approach tapped into commercial networks linking rural areas with secondary cities, and secondary cities with the demands of global markets. Through technical assistance, market information, and business development services, the project helped local businesses expand and employ more people in the areas that need it most.

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