The Inter-American Development Bank has approved two loans to Peru totaling $50 million with the goals of increasing the scope and quality of services provided by the country’s Employment Centers and facilitating foreign trade.
These programs – one for $30 million and the other for $20 million – seek to integrate into the workforce young people aged 18 to 29 in the regions of Arequipa, Ica, Lambayeque, La Libertad, Piura, San Martín and greater Lima and to launch a new integrated international trade single window (VUCE in Spanish) that simplifies import-export procedures.
A greater focus on training young people
With the loan for youth employment, the plan is to boost links between employment centers and the productive sector so that the number of companies and job vacancies that show up in the national job bank increases. Another objective is to improve the youth-oriented services offered by these centers.
The specific goals are to improve services offering entrepreneurial education, job-search consulting, certification and workplace training for young people in Peru.
The loan also aims to improve operational processes at the centers and enhance the Labor Ministry’s ability to manage them in conjunction with regional governments.
The project will help young, urban Peruvians find the right job placement for them in the workforce. Currently, around 80 percent of young Peruvians work in the underground economy because they lack technical skills or the social and emotional aptitude, or because they lack information on job vacancies.
Less red tape so as to encourage trade
The international trade “single window” (VUCE) instituted from 2010 to 2014 will be improved and upgraded so as to cover all formalities associated with foreign trade transactions and add new functionality.
Since the first phase of the VUCE was implemented in 2010, foreign trade procedures were sped up by 15 percent, allowing for savings of $9 million a year.
With the second phase, the goal is to reduce waiting time associated with paperwork by 25 percent and cuts costs by 5 percent.
The project will also finance the design and implementation of a port community system, thus linking private sector solutions to the VUCE platform, as wellas a platform allowing VUCEs to connect with single windows of other countries in the region, in particular fellow members of the Pacific Alliance (Colombia, Chile and Mexico).
A study by the OECD has found that the reduction of red tape and the automation provided by “single window” systems can save countries between 2.8 percent and 4.2 percent, depending on the country’s level of development.
The $30 million loan has a grace period of 9.5 years, and that of the $20 million loan, 10 years. Both have a repayment period of 10 years and an interest rate pegged to LIBOR.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.