Costing MDG Achievement in Peru and Policy Implications: A Play in Three Acts

This note takes stock of three research efforts undertaken recently
regarding the feasibility to achieve MDGs in Peru by 2015, the
budgetary costs involved, and the additional policies potentially
required. A first work showed that with a 5 percent annual economic
growth rate, Peru would need to invest around 0.7 percent of GDP
annually in additional policies to improve the country’s chance to
meet its human development goals. Likewise, poverty reduction
goals would need additional transfer programs costing at least 0.7
percent of GDP per year. A second paper indicated that only a growth
rate of 7 percent would halve national poverty, diminishing needed
additional investment to 0.5 percent of GDP. A third effort included
the potential feedback from educational attainment to economic
growth, raising potential annual growth to 6 percent. Nevertheless,
only when including ambitious targets for secondary and higher
education, the economy would grow by 7 percent and poverty
reduction could get close to its target by 2015.