Peru: Strengthening Foundations for Post COVID-19 Recovery DPF

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The development objectives of the Strengthening Foundations for Post COVID-19 Recovery Development Policy Financing in Peru are: (i) strengthening institutions to mitigate the social and economic impact of the COVID-19 pandemic, and (ii) reinforcing structural foundations for an inclusive and climate smart economic recovery. The first pillar concentrates on equitable and innovative economic crisis-response policies that can serve as blueprints and pilots for future policy programs, including outside Peru. By focusing on mitigating the social and economic impact of COVID-19 pandemic, the policy actions supported through Pillar 1 aim to minimize scar tissue from the crisis and strengthen institutions to improve crisis response in the future. Broad-based social transfers provide the poor and vulnerable with essential income support that directly reduces poverty and food insecurity. The second pillar focuses on microeconomic reforms that promote an inclusive and climate smart post-COVID recovery. The policy actions supported address market failures that have been holding back growth before the COVID-19 crisis, but which became particularly evident during the pandemic and have been depriving households and firms from economic opportunities. The actions tackle monopoly power in specific sectors, strengthen competition for digital inclusion and promote universal access to financial services.