Peru has grown on an accelerated path over the last decade and it is classified as a high/middle-income country. Although the main social indicators show positive progress, Peru still faces a number of substantial social and regional disparities. While the national average poverty rate has decreased to 22.7% in 2014, it still reaches up to 50% in rural areas, especially in the Andean highlands and the Amazon region. A weak presence and institutional capacity of the state to deliver social and economic policies in large parts of the national territory is considered to be a major reason for persistent poverty and inequality. As an upper/middle-income country, Peru should in principle "graduate" from EU bilateral cooperation under the DCI. However in December 2013, the European Commission, the European Council and the European Parliament decided to make an exception and continue cooperation with Peru for a phase-out period 2014-2017.
The aim of the 2014-2017 programming period (€66 million) is to consolidate the achievements of the previous cooperation programme 2007-2013, and to tackle the remaining development challenges in the poorest regions of the country by promoting inclusive development at regional and local level and fostering sustainable trade.
For the 2007-2013 period, €135 million were allocated with the main objectives of strengthening democratic governance and institutional capacities as well as at fostering social inclusion and reducing poverty in the most vulnerable regions. Through its budget support to health and nutrition policies as well as in the area of trade and environment, the EU has contributed to the consolidation of public policies as well as to the achievement of tangible results in service delivery and economic development.
The EU also finances activities in the area of democracy and human rights, education, health, food security, migration and asylum and security-related issues. Peru will remain eligible for thematic and continental cooperation including after the above-mentioned phase-out period.