Promoting Sustainable Economic Growth and Structural Transformation in the Amazon Region of Loreto, Peru

wooden houses on a river in PeruLocated in the heart of the Amazon rainforest, the state of Loreto in Perú is a place of contrasts. It is by far the largest state in Perú and also among the least densely populated. It is so remote that it’s capital, Iquitos, is closer to the border with Brazil and Colombia than to the capital cities of its closest neighbors, San Martin and Ucayali. Iquitos is home to over 50% of the state’s population of around a million people, but can only be accessed by river or air, making it one of the largest cities in the world without roadway access.

The region’s geography and the remoteness of its capital pose challenges to economic integration with the rest of the country, as do the social and environmental challenges from managing the extraction of natural resources, preserving the Amazon ecosystem, and protecting the indigenous communities that live in it. Income per capita growth in Loreto has chronically underperformed the national average and its peer states in the Amazon, leading to poor social, health and education outcomes. Balancing Loreto’s economic needs with the need to preserve the environment and indigenous communities is key to the region’s economic development.

This project is aimed at providing inputs and policy recommendations to accelerate the development of the region and generate prosperity in a sustainable way. It comprises three essential inputs for the design of Loreto’s productive development policies:

  • A report on the productive ecosystem of Loreto, the sophistication of the agglomeration of know-how of the place and its potentialities (Economic Complexity Report of Loreto)
  • A report on the main binding constraints that inhibit growth and the materialization of opportunities for productive diversification in Loreto (Loreto’s Growth Diagnostics)
  • A policy recommendations report aimed at overcoming or mitigating the impacts of the most binding constraints and promoting the structural transformation of the Loreto economy in a sustainable way (Policy Recommendations Report)

ATLAS OF ECONOMIC COMPLEXITY

blue globe with Peru highlighted in darker blue Explore Peru's Country Profile

Peru ranks as the 104th most complex country in the Economic Complexity Index (ECI) ranking. Compared to a decade prior, Peru's economy has become less complex, worsening 20 positions in the ECI ranking. Peru's worsening complexity has been driven by a lack of diversification of exports. Moving forward, Peru is positioned to take advantage of a moderate number of opportunities to diversify its production using its existing knowhow.

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PROJECT DATES

November 2019 - June 2020

FUNDED BY

The Gordon and Betty Moore Foundation

TEAM MEMBERS

Ricardo Hausmann

Ricardo Hausmann

Director, Growth Lab
Rafik Hariri Professor of the Practice of International Political Economy, HKS
Miguel Angel Santos

Miguel Angel Santos

Adjunct Lecturer in Public Policy, HKS
Director, Applied Research, Growth Lab
Yang Li

Yang Li

Postdoctoral Fellow, Growth Lab