High rates of economic growth for a period of more than 10 years have been key to reducing monetary poverty and extreme poverty in Peru.
During the time the economy grew at an average annual rate of 6% (from 2002 to 2013), well above the average of the Latin American region, poverty reduced from 59% to 24%, and evidence shows that the former contributed to the latter, i.e. that economic growth was pro-poor . Put differently, among poor people there were improvements in household consumption, including caloric consumption (in real, per capita terms), and ultimately in resources available to satisfy health and nutritional needs of household members, mainly because income levels were higher. There is also evidence that living standard conditions improved in other dimensions. For instance, access to basic sanitation improved in the previous decade (e.g., see here), which is important to reduce infectious diseases, a common cause of chronic undernutrition.
But there is another reason why a relatively long period of economic growth at high rates has been important: by enabling the Government the fiscal resources required to increase social expenditure.
In particular, two large-scale anti-poverty programmes relevant to fighting chronic undernutrition started operating in the previous decade:
- conditional cash transfer programme Juntos—which gives $60 USD bi-monthly to poor families provided that their children aged 0 to 5 attend regular health check-ups (including Growth Monitoring Controls), pregnant women attend antenatal sessions, and children aged 5 to 19 attend school regularly
- comprehensive health insurance (Seguro Integral de Salud, SIS) programme —which provides free health services for poor people.
These two programmes have gradually expanded and to date reach a large part of the population in rural areas. It is known that the Juntos CCT had an impact on reducing poverty and on improving attendance to health check-ups among children under 5 years (Perova and Vakis, 2012; Escobal and Benites, 2012). Moreover, evidence shows that the Juntos program reduced severe stunting by between 8 and 13 percentage points and increased height-for-age Z-scores (by 0.13) among children under 5 years (Sanchez and Jaramillo, 2012; Sanchez et al., 2016).