OECD calls on Peru to boost productivity
Peru has made significant economic and social progress, but further reforms are needed to achieve more inclusive and sustainable growth, a new OECD report says.
While economic and social reforms over the past two decades have enabled Peru to improve growth and well-being, raise incomes and reduce poverty, the OECD’s Multi-Dimensional Country Review of Peru also warns that further action is needed to reduce inequality, boost productivity, drive down informality and put the country on a more sustainable development path.
The review recognises the country’s success in raising per-capita income and expanding the middle class, which now encompasses about one-third of the population. But, it also lays out a series of policy recommendations for future reform priorities.
These include taking new steps to promote greater economic diversification, improve education, skills and health, address infrastructure and logistics gaps, tackle ineffective labour market regulation and strengthen social protection programmes.
Broadening the tax base, increasing the effectiveness of taxation and strengthening institutional frameworks and confidence in the state will be critical to meeting these goals, according to the review.
OECD secretary-general Angel Gurría presented the document to Peruvian president Ollanta Humala during a meeting in Peru’s capital Lima last week.
Gurría said: “Peru has been one of the most rapidly evolving Latin American economies over the past years, driven by significant reform and solid economic momentum, but it still faces important challenges if it is to consolidate its emerging middle income class and set along the path to inclusive and sustainable development.
The review, he said, “exemplifies how the OECD is supporting the government as it implements its ambitious reform agenda.”
Gurría’s visit to Lima included participation in the annual meetings of the International Monetary Fund and the World Bank last week, as well as several high-level events including a meeting of G20 finance ministers and Central Bank governors.
During his first day in Lima he met with president Humala and various members of his government, as well as representatives of the business sector and civil society.