Peru has experienced high economic growth in the last decade, and the country has notably been one of the fastest growing economies in the Latin America and Caribbean region. However, the Peruvian economy has begun to slow down in recent years. The decrease is mainly a consequence of unfavorable external conditions, political instability, and a reduction of private investment in Peru.
Economic growth has led to an equally significant increase in per capita income and a reduction in the poverty rate by 36% in six years. Although rapid growth rates have taken place throughout the country, the highest rate of growth (6.6%) has happened in the arid coastal areas, where the largest cities are located. For example, the capital city of Lima – the second largest desert city in the world – is where about a third of the country’s population lives and much agricultural and mining activity takes place. Only 1.76% of Peruvian water resources is available in the coastal area, where more than 60% of the country’s population is concentrated. By contrast, the rainforest regions of the Amazon Basin have approximately 98% of the water resources but are home to only 10% of the population.
In the last decade, Peru has made steady progress in increasing water and wastewater coverage, meeting the Millennium Development Goals targets in 2015. During the period 2012-2014 the sector saw an increase in annual public sector investments (from 21 percent to 49 percent) allocated to rural areas. However, despite these considerable investments, the quality, efficiency, and reliability of services in Peru are below what could be expected of an upper-middle-income country. According to the National Water Authority, around US$ 45 billion dollars in new investment are required by 2035 to meet the country´s water needs. It is clear that the government alone cannot raise this sum; innovative solutions and partnerships with the private sector are also needed.
Peru is among the top 30 countries that suffer from chronic water stress and water scarcity. Although it has 159 river basins and an overall per capita availability of 68,321 m³ per person per year, these resources are very unevenly distributed throughout the country because of the uneven spatial distribution of water resources. The Andean Mountains divide the country into three major drainage basins: the Pacific, the Atlantic basins, and Lake Titicaca.
The spatial variability of surface water resources compounded by temporal variability results in frequent floods and droughts. The Peruvian piedmont and coastline are prone to floods and mudslides following short-duration and extreme rainfall events often triggered by El Niño phenomenon. The greatest number of floods are usually registered in the north of Peru. In contrast, the southern part of the country is often affected by droughts.
Out of Peru’s total population of 30 million people, approximately 7.4 million live in rural areas. In these rural areas, about 2.7 million have no access to adequate drinking water, and about 6 million Peruvians do not have improved sanitation facilities. Lima, the capital city, with approximately a third of the country’s population, is located in the Pacific basin, and is characterized by an arid climate with very low rainfall (on average 9 mm annually). This coastal area is semi-arid; rainfall is practically nonexistent, and the area depends for its water supply on some 53 rivers, half of which carry only seasonal flow.
Furthermore, there are untreated mining effluents, insufficient wastewater treatment in urban and industrial areas, unrestrained dumping of municipal and industrial solid waste, and indiscriminate use of agrochemicals that further limit the availability of freshwater supply throughout the country. This has increased the over-exploitation of groundwater resources reserves.
The 2030 Water Resources Group (2030 WRG) is a public, private, civil society multi-donor trust fund hosted by the World Bank Group. We support stakeholders in collective decision making, and in co-designing out-of-the-box solutions that promote strong socio-economic development across all sectors connected to water.