Washington, D.C., June 24, 2021 – The World Bank Board of Directors today approved a US $ 350 million loan to support the development of social, health and education policies that will contribute to promoting human capital accumulation in Peru.
This is the second operation of Human Capital Development Policy Financing, adding to the US $ 50 million approved in March 2020. The financing will be used to support Peruvian government efforts to mitigate the effects of the pandemic on human capital and to promote reforms in education, health and social protection.
"Faced with the onslaught of health, political or environmental crises, families, children and adolescents in situations of vulnerability require governments to provide an adequate, effective and timely response to mitigate negative impacts and speed recovery," said Marianne Fay, World Bank director for Bolivia, Chile, Ecuador and Peru. "For this reason, the project will support the Peruvian government in promoting the reforms needed to improve early childhood development, basic education and health through higher quality and more equitable services," she said.
Peru's progress in reducing poverty and inequality over the past two decades is currently threatened by the devastating impact of the COVID-19 pandemic, which exposed the fragility of human capital when faced with multiple challenges. The most vulnerable families have lost their sources of income and have experienced increased food insecurity, while their children lack access to the public services offered through schools. The impact has been tremendous. For example, it is estimated that children in the poorest income quintile could lose the equivalent of nearly a year of learning-adjusted year of schooling (LAYS).
The combination of school closings, loss of income sources and emotional stress on families, children and adolescents caused by the pandemic could reduce human capital levels throughout the country and increase poverty among future generations. This situation underscores the need for a coordinated, comprehensive effort to build resilient social services and prevent lasting damage to the development of the country's human capital.
The project will contribute to Peruvian government efforts to strengthen investments in human capital while ensuring critical political and institutional reforms in the social sector. To this end, it will support policies to promote the comprehensive delivery of high-quality services in early childhood development, social protection, basic education and health.
This initiative is part of a broad portfolio of World Bank projects with the Peruvian government in prioritized social and economic sectors to strengthen investment in human capital and increase the population’s resilience to external shocks. The combination of these projects will contribute to improving the resilience of the most vulnerable households to different types of shocks, ensuring that girls and boys attend school and receive a quality education from well-trained teachers, and that they receive quality healthcare services throughout their development.
World Bank Group COVID-19 Response
Since the start of the COVID-19 pandemic, the World Bank Group has committed over $125 billion to fight the health, economic and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The Bank is also providing $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests and treatments.
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