July 2019

EU-CELAC Innovact Platform:

Innovation to promote Territorial Cohesion

Mapping Report Border Area - Peru-Bolivia

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EU-CELAC Innovact Platform: Innovation to promote Territorial Cohesion Mapping Report Border Area - Peru-Bolivia July 2019 For any information regarding this document please contact: Alice Ruczinski (Perú), Consultora asociada / Punto focal Perú-Bolivia alice.ruczinski@technopolis-group.com (+51) 971 160 524 Gonzalo Castellanos (Bolivia), Consultor asociado / Punto focal Perú-Bolivia gonzalo.castellanos@technopolis-group.com (+591) 761 89975 Juan Carlos Salazar, Deputy Project Manager in LATAM, Technopolis Group juan.salazar@technopolis-group.com (+57) 320 2115880

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Table of Contents Table of Contents ............................................................................................................................................. 3

Tables and Figures ........................................................................................................................................... 3

1 Summary in English ................................................................................................................................. 5

2 Resumen en español ................................................................................................................................. 6

3 The Context of the Border Area ................................................................................................................ 7

3.1 Perú-Bolivia border Integration Zone ................................................................................................................ 7

Figure 1: Perú-Bolivia Border Integration Zone ................................................................................................ 7

3.2 Bi-national Plans and other integration actions of the border area emphasising innovation ................................ 8

4 National Level Priorities on each side of the Border .................................................................................. 9

4.1 The two major areas of the Border Integration Zone Peru-Bolivia (ZIF-PB)........................................................ 9

4.2 Bolivia - Value chain support in the border area ............................................................................................... 10

4.3 Peru - Value chain support in the border area ................................................................................................... 11

5 Value Chain Mapping in the Border Area ............................................................................................... 13

5.1 Value Chain A: Amazonian mountain fruits ..................................................................................................... 13

5.2 Value Chain B: Fish-farming ........................................................................................................................... 17

5.3 Value Chain C: Tourism .................................................................................................................................. 19

6 Selection of Priority Value Chains ........................................................................................................... 22

7 Recommendations for Next Tasks .......................................................................................................... 23

7.1 Necessity of a narrow focus in the prioritized value chain ................................................................................. 23

7.2 Key stakeholder and possible champions ......................................................................................................... 23

7.3 Suggested location of the first bi-national working meeting .............................................................................. 24

7.4 Project management and logistics.................................................................................................................... 24

Contact Details of Interviewees .................................................................................................. 25

Bibliography .............................................................................................................................. 28

Main stakeholders mapping....................................................................................................... 29

Previous projects supported by the EU in Peru, Bolivia and the border region ........................... 32

Tables and Figures Figure 1: Perú-Bolivia Border Integration Zone …...................................................………………………… ............7

Table 1: Prioritization criteria in Border Region Peru-Bolivia………………………………………………………..22

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Glossary ALT: Lake Titicaca Authority

CAF : Development Bank Of Latin America

CAN : Community of Andean Nations

CITE: Centre for Productive Innovation and Technology Transfer

EU : European Union

GDP: Gross Development Product

GOREMAD : Madre de Dios Regional Government

GVA: Gross Value Added

ICT: Information and Communications Technologies

INPANDES: Participatory Regional Integration Project in the Andean Community

IIAP : Peruvian Amazonic Research Institute

LATAM : Latin America

MYPES : Medium and Small Enterprises

PDRC : Concerted Regional Development Plan of Madre de Dios 2014 – 2021

PEMDD : Madre de Dios Especial Project

PISP : Productive and Industrial Strategy of Pando

UAP : Amazonic University of Pando

UNAMAD : National Amazonian University of Madre de Dios

ZIF-PB : Zona de Integración Fronteriza Peru-Bolivia/ Peru-Bolivia Border Integration Zone

ZOFRACOBIJA : commercial and industrial tax-free zone of the city of Cobija

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1 Summary in English

The prioritised area of the Peru-Bolivia Border Integration Zone (ZIF PB) extends over 371,182 km2 and is comprised of 2 distinct geographical zones: Andean (Puno, Tacna and La Paz) and Amazonian (Madre de Dios and Pando). The Andean sector represents 59.3% of the territory and gathers 96.2% of its population. Accordingly, the Amazonian sector presents a very low population density, of around 1.5 inhabitants/ km2.

The main challenges this border area faces are: extreme poverty (mainly in rural areas); access to basic services (education and health, drinking water and sanitation); insecurity and violence; poor infrastructure and connectivity; environmental conditions under threat (deforestation and conservation of protected areas); value chains with insufficient added-value generation and low productivity. It is also a very extensive border zone where illegal activities (generating substantial direct and indirect incomes for local populations) have grown up continuously in the last decades: illegal foresting, illegal mining, coca production and drug traffic.

The integration efforts between Bolivia and Peru took significant momentum since 2015, with the creation of Binational Ministerial Cabinets and the organisation of annual presidential meetings. Cross-border integration efforts have initially focused on the Andean sector, because of the major challenges in this area and population density. More recently, the Presidents of both countries expressed their commitment to strengthen cooperation in the Amazon sector. Through this political will and with the support of CAF (LATAM Development Bank), an "Integration Plan for the Development of the Amazonian Sector of the ZIF-PB" - including a proposal of regional strategy of smart specialisation - was elaborated and adopted in 2018. It is now in its implementation phase. Following this guideline, the ministries of foreign affairs of both countries have prioritised the Amazonia sector of the ZIF-PB for INNOVACT II implementation.

The primary three cross-border value chains identified in this area are Amazonian mountain fruits, tourism and fish-farming. For each one, an analysis was carried out, based on desk work and semi-structured interviews to relevant local stakeholders, aimed at the identification of: key characteristics and economic indicators; mapping of key players; main challenges and barriers to development and; opportunities for cross-border collaboration. Work followed by a value chain scoring and prioritisation assessment against relevant indicators.

The Amazonian mountain fruits value chain — with a focus on Brasil nut (Castaña), asaí, copoazu and cocoa, — along with the tourism value chain obtained the highest scores in the prioritisation. Evidencing relevant critical mass, favourable local conditions, the potential to generate economic diversification and reinforce the cross-border cohesion in this sector of the ZIF-PB.

The Amazonian mountain fruits value chain already represents one of the main sources of income in the border region. Mainly for the activities linked with the collection and processing of Castaña, product in which Bolivia and Peru are the world's leading exporters (Eur 226 million in 2018, combined exports). Regarding Asaí, copuazu and cocoa, production is limited and mainly commercialised in the local and national markets. However, the private and public interest is growing for these products driven by increasing demand on the world market and the extension of its applications, in other countries, on the healthy eating, cosmetics, and pharmacy segments. There are various opportunities for cross-border collaboration in the different link of this value chain for the transformation of sustainably-harvested amazon fruits into products with higher added value.

On the other hand, tourism is one of the activities with greater potential in the border region due to its unique biodersity and cultural heritage. The value chain is currently more consolidated in Madre de Dios than in Pando where the infrastructures and services ta yet well developed. Nonetheless, the opening of the new border crossing (in Extrema - San Lorenzo) allows the possibility of designing and offering cross-border circuits that link with others destinations of high demand such as Cuzco, Titicaca lake or Uyuni Flats.

Previous binational work exists on the prioritized value chains, as well as public and private support at national and territorial level. Nevertheless, they require a focussed action plan to allow its development in a way that it can be better articulated, produce further spill overs in the border region and be more integrated into global value chains. This process can be accelerated with cooperation with EU regions and the diffusion of its regional innovation policy experience and good practices.

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2 Resumen en español

El área priorizada de la Zona de Integración Fronteriza Perú-Bolivia (ZIF PB) se extiende sobre 371 182 kilómetros cuadrados y está compuesta por dos zonas geográficas distintas; Andina (Puno, Tacna y La Paz) y Amazónica (Madre de Dios y Pando). El sector andino representa el 59,3% del territorio y reúne al 96,2% de su población. En consecuencia, el sector amazónico presenta una densidad poblacional muy baja, de alrededor de 1,5 habitantes / km2. Los principales desafíos que enfrenta esta área fronteriza son la pobreza extrema (principalmente en áreas rurales); acceso a servicios básicos (educación y salud, agua potable y saneamiento); inseguridad y violencia; deficiente infraestructura y conectividad; condiciones ambientales bajo amenaza (deforestación y conservación de áreas protegida); cadenas de valor con generación de valor agregado insuficiente y baja productividad). También es una zona fronteriza muy extensa donde las actividades ilegales (generando ingresos directos e indirectos sustanciales para las poblaciones locales) han crecido continuamente en las últimas décadas: forestación ilegal, minería ilegal, producción de coca y tráfico de drogas. Los esfuerzos de integración entre Bolivia y Perú tomaron un impulso significativo desde 2015, con la creación de Gabinetes Ministeriales Binacionales y la organización de reuniones presidenciales anuales. Los esfuerzos de integración transfronteriza se han centrado inicialmente en el sector andino, debido a los grandes desafíos en esta área y a la densidad de población. Más recientemente, los presidentes de ambos países expresaron su compromiso de fortalecer la cooperación en el sector amazónico. A través de esta voluntad política y con el apoyo de la CAF (Banco de Desarrollo de América Latina), se elaboró y adoptó en 2018 un "Plan de Integración para el Desarrollo del Sector Amazónico del ZIF-PB", que incluye una propuesta de estrategia regional de especialización inteligente. Actualmente se encuentra en su fase de implementación. Siguiendo esta pauta, los Ministerios de Asuntos Exteriores de ambos países priorizarón el sector amazónico de la ZIF-PB para implementar INNOVACT II. Las tres principales cadenas de valor transfronterizas identificadas en esta área son los frutos amazónicos de monte, el turismo y la piscicultura. Para cada una, se llevó a cabo un análisis basado en trabajo de escritorio y entrevistas semiestructurada a actores locales relevantes, dirigido a la identificación en cada una: características clave e indicadores económicos; mapeo de jugadores clave; principales retos y barreras al desarrollo; y oportunidades para la colaboración transfronteriza. Este trabajo fue seguido por una evaluación de la puntuación y la priorización de la cadena de valor contra indicadores relevantes. La cadena de valor de los frutos amazónicos de monte, con un enfoque en castaña, asaí, copoazu y cacao, obtuvo la puntuación más alta en la priorización, junto con la cadena de valor del turismo. Lo que evidencia que cuentan con masa crítica relevante, condiciones locales favorables, potencial para generar diversificación económica y reforzar la cohesión transfronteriza en este sector del ZIF-PB. La cadena de valor de los frutos amazónicos de monte ya representa una de las principales fuentes de ingresos en la región fronteriza. Principalmente para las actividades relacionadas con la recolección y procesamiento de castaña, producto en el que Bolivia y Perú son los principales exportadores mundiales (226 millones de euros en 2018, exportaciones combinadas). Con respecto al Asaí, copuazu y cacao, la producción es limitada y se comercializa principalmente en los mercados locales y nacionales. Sin embargo, el interés público y privado está creciendo para estos productos impulsados por la creciente demanda en el mercado mundial y la extensión de sus aplicaciones, en otros países, en los segmentos de alimentación saludable, cosméticos y farmacia. Existen oportunidades para la colaboración transfronteriza en los diferentes eslabones de esta cadena de valor para la transformación de las frutas, producidas de manera sostenible, en productos con mayor valor agregado.

Por otro lado, el turismo es una de las actividades con mayor potencial en la región fronteriza debido a sus extraordinarios y diversos patrimonios naturales y culturales. La cadena de valor está actualmente más consolidada en Madre de Dios que en Pando donde la infraestructura y los servicios necesarios no son muy desarollados. No obstante, la apertura del nuevo cruce fronterizo (en Extrema - San Lorenzo) permite diseñar y ofrecer circuitos transfronterizos que enlazan con otros destinos de gran demanda, como el Cuzco, el Lago Titicaca o el Salar de Uyuni.

Existe un trabajo binacional anterior en las cadenas de valor priorizadas, así como apoyo público y privado a nivel nacional y territorial. Sin embargo, se requiere un plan de acción enfocado para permitir su desarrollo de manera que puedan articularse mejor, producir mayores externalidades positivas en la región fronteriza y estar más integrado a cadenas de valor globales. Este proceso puede acelerarse a través de cooperación con regiones de la EU y la difusión de su experiencia y buenas prácticas en políticas regionales de innovación.

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3 The Context of the Border Area

3.1 Perú-Bolivia border Integration Zone

With a total surface of 902 620 km² and a total population of 8,6 millions of inhabitants, the Perú-Bolivia Border Integration Zone (ZIF-PB: Zona de Integración Fronteriza Perú-Bolivia) includes the following regions:

Perú: Arequipa, Cusco, Madre de Dios, Puno, Tacna

Bolivia: La Paz, Oruro, Potosi, Beni, Pando

Figure 1: Perú-Bolivia Border Integration Zone

Due to the considerable extend of this frontier, both countries decided to start to implement the ZIF development in a prioritized area (Puno, Tacna and La Paz in the Andean zone; Madre de Dios and Pando in the Amazonian area). The population of the prioritized area of the ZIF-PB is 4,321,903 inhabitants. The majority, 61.5%, is located in Bolivia (representing 23% of the total Bolivian population) and 38.5% in Peru (5% of the total Peruvian population).

By population density, the Andean and Coastal sector of the prioritized area of the ZIF-PB represents 59.3% of the territories and gathers 96.2% of its population (36.2% in Puno and Tacna, 60.1% in La Paz). The average population density in this area is of 19.2 inhabitants/ km2. The Amazonian sector presents a very low population density with 40.7% of the prioritized ZIF territories and 3.8% of the total population (2.4% in Madre de Dios and 1.4% in Pando). The average population density in this area is of 1.5 inhabitants/ km2.

In Bolivia, the ZIF-PB represents a considerable part of the national GDP (La Paz represents 28% of the national GDP and Pando less than 1%), and in Peru, the ZIF-PB represents 1.3%1 of the national GDP. It should be noted that the GDP in the ZIF has experienced a very positive growth rate in the last ten years.2

Main challenges of this border area are extreme poverty (mainly in rural areas, work and economic inclusion); access to basic services (education and health, drinking water and sanitation); insecurity and

1 Madre de Dios : 0.5% ; Puno : 1.8% ; Tacna : 1.3%. 2 For Peru, between 2007 and 2016, the growth of GDP, on constant prices, has been 54.3% in Puno and 46.2% in Madre de Dios. For Bolivia, between 2000 and 2016, La Paz has experienced a continued increasing GDP growth from -0.07% in 2000 to 5.51% in 2016 whereas in Pando, the growth rate has been declining, largely because of the regional economic structure (traditional productive matrix based on subsistence family farms) that has not evolved like in other Bolivian regions.

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violence; poor roads infrastructure and connectivity (digital illiteracy, use of ICT, electric interconnection); environmental conditions under threat (deforestation, conservation of protected areas, and integral management of natural resources). The main problems of are very high rates of informal employment, a poor generation of adequate formal employment, insufficient added-value generation, productive chains that energize the local economy, and low levels of technology to improve production processes. It is also a very extensive border zone where illegal activities (generating substantial direct and indirect incomes for local populations) have grown continuously up in the last decades including illegal foresting, illegal mining, coca production and drug traffic.

In the framework of the political dialogue between the Community of Andean Nations (CAN)3 and the European Union (EU), various projects have been elaborated and implemented during the last ten years to support this border area: CESCAN I y II and more recently INPANDES with particular attention paid to the development of cross-border value chains as vectors of territorial cohesion. (See Appendix D for details)

3.2 Bi-national Plans and other integration actions of the border area emphasising innovation

ZIFs are regulated by the Decisión 5014, approved in June 2001 by the Andean Council of Foreign Ministers. They are the adjacent border areas of the member countries of the Andean Community, in which plans, programmes and projects are implemented to promote their development in a joint, shared and coordinated way. Since the beginning of the 2000s, Peru and Bolivia engaged in a prospective planning exercise of the ZIF-PB5. Nevertheless, over ten years, the binational programmes and projects were implemented outside an established overall policy framework.

Since 2015, Binational Ministerial Cabinets and regular Presidential meetings have been put in place to follow-up integration efforts on the Peru-Bolivia frontier. These meetings now take place every year to monitor integration efforts in this border area on the following 4 axes:

1. Environment and use of resources (including water resources);

2. Security and defence;

3. Economic development and social policies;

4. Infrastructure for integration and development.

Each meeting of the Binational Ministerial Cabinet and the Presidents results in a joint declaration bringing together all the commitments on cross-border integration. Four Binational Cabinets and Presidential meetings took place since 2015. Major programmes and projects are now implemented and monitored at the binational level6.

These joint declarations represent a step further in the joint efforts of the two nations to enhance the integration process, to plan the development of the territory, to reduce social gaps, to support competitiveness, to define challenges and to solve structural problems on both sides of the border. The prospective territorial process of the ZIF Peru-Bolivia (ZIF-PB) is now well established. Its multilevel governance still needs to be strengthened through the proposed institutional scheme (geographically-focused technical working groups and multi-level cross-border committees). Both countries support science, technology and innovation through different plans and strategies (for more detail, please see Appendix C).

3 Communidad Andina in spanish. CAN is an international organization with various bodies and institutions that make up the Andean Integration System (SAI) whose objective is to achieve integral, balanced and autonomous development through Andean integration, with a projection towards South American and Latin American integration. http://www.comunidadandina.org/ 4 http://www.comunidadandina.org/Seccion.aspx?id=122&tipo=TE. 5 Programa de Estadísticas en coordinación con el Proyecto de Fronteras de la Secretaría General de la Comunidad Andina.

6 For example: joint management of the Titicaca Lake and TDPS Water Sistem through the ALT - Autoridad del Lago Titicaca (since 1996), creation of the border service centre in Desaguadero (2018), promotion of the Bio-oceanic Integration Corridor, a USD 10 billion mega-project that aims to unite the Atlantic and Pacific Oceans through a railway system.

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4 National Level Priorities on each side of the Border

4.1 The two major areas of the Border Integration Zone Peru-Bolivia (ZIF-PB)

4.1.1. General presentation and last binational declarations

The border integration process followed different trends in the two distinct parts of the prioritised areas of the ZIF-PB (Andes and Amazonia), due to the vast disparities between them, in all aspects (geography, climate, population, infrastructure, economy). The integration process, planning, and follow-up, is now conducted within a single political framework but implemented according to two different dynamics and schedules.

The last binational cabinet held in Cobija, Pando Department (Bolivia) in September 2018, resulted in a joint declaration by Presidents Vizcarra and Morales containing 42 commitments in the four axes mentioned above7. The 15th and 16th commitments are directly linked to the integrated development of the ZIF’s regions.

The 15th commitment concerns the Andean sector. It highlights “the cooperation of the European Union and the Community of Andean Nations (CAN) in initiatives aimed at strengthening the potential of the Border Integration Zone, as in the case of projects such as high-altitude coffee, camelid fibre, native potatoes, cultural heritage, water resources”. Moreover, the presidents committed themselves “to the continuity and expansion of the scope of the projects implemented”.

The 16th commitment is about the Amazonian sector. The presidents agreed “to promote cooperation and integrated development of the Amazonian border areas of both countries, strengthening the links between the Department of Pando (Bolivia) and the Department of Madre de Dios (Peru)”. In this regard they “stressed the importance of the implementation of the ‘Integration Plan for the Development of the Amazonian Sector of the Peru-Bolivia Border Integration Zone’ ”8.

4.1.2. Definition of the scope of the border region

In the Andean sector, the border cooperation is quite developed. Institutional schemes at the local level have been successfully implemented. The autonomous international public entity ALT (Autoridad del Lago Titicaca y del Sistema Hidrico TDPS) manages binational programs and projects since 1996. Local cooperation initiatives between border communities (Mancomunidades) have been recently created (2018) to elaborate and monitor cross-border integration strategies at the local level9. Promising value chains have been identified several years ago and already benefit from structured support actions, in the binational and international frameworks, namely through various CAN/ EU cooperation projects (CESCAN I y II; INPANDES) which paid particular attention to the development of these chains as vectors of territorial cohesion10. The coffee, camelid fibre, native potatoes and tourism value chains have reached an encouraging development level that still needs to be consolidated but which is already benefiting the cross-border area.

In the Amazonian sector of the border area, the integration process has known a considerable acceleration since 2010 with the construction of the Interoceanic Highway which connected the border regions of Bolivia, Brazil and Peru. This new infrastructure has had significant impacts on the demographic and economic development of these regions11 and has led to a substantial increase in cross-border cooperation and trade. Nevertheless, this new infrastructure also accelerated the development of unsustainable, polluting and illegal economic activities (extensive agricultural activities leading to accelerated deforestation, illegal mining, precious woods and rare animal species contraband, and drug trafficking).

7 https://andina.pe/agencia/noticia-iv-gabinete-binacional-peru-bolivia-esta-es-declaracion-conjunta-723963.aspx

8 This plan 2018-2022 results from a technical assistance funded by the CAF (Development Bank of Latin America) following the 2d Binational Cabinet held in Sucre in 2016. During this meeting, the Peruvian and Bolivian Presidents officially announced their will to have a common “strategy with mutual benefits so that both countries strengthen their productive processes and promote their economies with a territorial base”. A preliminary study was released in May 2018 (P1. Caracterización del ámbito de estudio - ZIF) and the plan was published in September 2018. 9 See Appendix C for examples. 10 See Appendix D for more information. 11 In Madre de Dios, the total population has been multiplied by 2 in the last 20 years. Source : Compendio Estadístico del Instituto Nacional de Estadística e Informática (INEI, 2015).

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The "Integration Plan for the Development of the Amazonian Sector of the ZIF-PB" issued in September 2018 thanks to a CAF funding aims at structuring the binational efforts to impulse a more sustainable development in this border area. This plan contains :

1) a proposal of smart specialisation strategy;

2) an integration plan (including strategic new infrastructures like the road Extrema/ San Lorenzo and the corresponding border crossing point);

3) an operational plan to implement this strategy and;

4) a proposal of cooperation strategy with other cross-border areas of the CAN, the EU and others.

The value chains with greater potential have thus been identified in the first part of this global plan. They are Amazonian mountain fruits, tourism, pisciculture and coffee.

The Peruvian and Bolivian ministries of foreign affairs are actively involved in the

implementation of this vital development plan and have both prioritized this sector of the ZIF-

PB (focus on Madre de Dios and Pando) for INNOVACT II implementation.

4.2 Bolivia - Value chain support in the border area

Pando represents 1% (149 000) of the Bolivian population and 0.9% of its GDP12. The department is made up of 5 provinces: Nicolás Suárez, Manuripi, Madre de Dios, Federico Román and Abuná. Its capital is Cobija which has about 78,000 inhabitants.

Historically, the main priority of the national government has been to promote migration and private investments in the Department of Pando due to its isolation from the major urban areas of the country and its strategic geo-location with connections to Brazil and Peru.

In 1983, through national law, a commercial and industrial tax-free zone was established in the city of Cobija (ZOFRACOBIJA), for 20 years, to accelerate the social and economic development of Pando. This unique legislation in Bolivia allowed all companies or industries established in Cobija to be exempt from customs duties and commercial taxes. The current administration has enacted the law N. 1048 in 2018 that extends the term of validity of the legislation – ZOFRACOBIJA - for 20 more years.

These fiscal incentives, promoted by the national government, has not had a significant role in promoting industrial development of the region and has concentrated on commercial development. Stiff competition of products of Brazilian and Peruvian origin, the lack of road infrastructure and adequate basic services are some factors hindering the industrialization process in the region (MDPyEP, 2018).

4.2.1 EMPODERAR Program

The EMPODERAR PROGRAM, dependent on the Ministry of Rural Development and Land, is an important operator arm of the national government to promote productive development in this border area. EMPODERAR provides to associations of producers financial and technical support for the implementation of technology-based irrigation systems to produce agroforestry systems (with emphasis on coffee and cocoa). This programme has co-funded more than 180 rural initiatives in the Department of Pando and is playing an active role in its productive diversification.

4.2.2. Productive and Industrial Strategy of Pando

Based on the productive complexes approach defined in the Patriotic Agenda 2025 and the National Plan for Economic and Social Development for Living Well (PDES, 2016-2020), the national government, through the Ministry of Productive Development and Plural Economy, has led the development of the Productive and Industrial Strategy of Pando (PISP), finished in late 2018.

12 www.ine.gob.bo

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The PISP is oriented to strengthen the productive, business and industrial capacities of the region. Strengthen the production of food and primary products in the department and replace imports from Brasil and Peru. The strategy raises actions and institutional roles to develop five prioritized productive complexes or value chains; (1) wood, (2) Amazonian product (Brasil nuts, Acai, Copuazu and Cocoa), (3) grains, (4) meats and dairy and (5) tourism. The PISP also outlines strategic projects to provide the essential conditions to industrialisation such as the paving of the roads to Extrema (Peruvian Border) and Xiamas (North of La Paz), improvements in the water and electricity systems, and the establishment of an Industrial Park. It also contemplates indicators and both medium term (to 2020) and long term (to 2025) goals, with a referential budget of EUR 100.5 Million (MDPyEP, 2018).

4.3 Peru - Value chain support in the border area

Madre de Dios is the third most important region of Peru (6.6% of the surface) but concentrates only 0.5% of the population (141,070 in 2017). Its capital is Puerto Maldonado and it comprises 3 provinces: Tambopata, Manu and Tahuamanu. Since the beginning of the 2000’s, the Gross Added Value (GVA) of Madre de Dios (0.47% of the national one) has increased continuously even if not in the same proportion as Peru as a whole13. In 2017, it was constituted mainly by mining, gas and minerals extraction (39%), other services (15%), commerce (12%) and agriculture, livestock, hunting and forestry (7%)14.

Although Madre de Dios is considered Peru's capital of biodiversity, it is also recognized as one of the regions most devastated by illegal and informal mining, responsible for extensive deforestation – jointly with the development of extensive agricultural activities – and contamination, mainly with mercury. Madre de Dios has lost more than 160,000 hectares of forest in the last 35 years of which 95,750 hectares (60%) due to mining activity in the area known as “La Pampa” and 41,000 (26%) in the last 5 years. This alarming situation gave rise to many initiatives from international, national, regional and local players.

The national government has recently increased its support for combating illegal mining and fomenting new sustainable economic activities. The Export Regional Plan (PERX) Madre De Dios 2018-2025 is orientated toward the development of non-traditional exportations sustainably produced. The recently elected regional and provincial governments (January 2019) show the same desire to transform the region's development model. Encouraging first results can be observed: + 65% growth of non-traditional exportations sustainably produced in the last 12 years; +33% growth of agricultural exports between 2017 and 2018.

4.3.1. National initiatives

The regional stakeholders can benefit from the national programmes dedicated to productive development, technology transfer and innovation and especially from the competitive call for proposals launched by PromPeru, Innovate Peru, Agroideas y el Fonecyt15. Various national institutions are represented in Madre de Dios and support the regional value chains development, namely the Centre of Innovation and Technology Transfer for Productive activities: agro-industry, wood and furniture and aquaculture (CITE Productivo) and the Research Institute of the Peruvian Amazon (IIAP - Instituto de Investigacion de la Amazonia Peruana).

The Peruvian state has significantly increased its presence in the region during the last 2 years, not only with police and military large-scale operations but also creating new regional offices of national institutions, reinforcing existing ones and implementing new funding programmes. This dynamic has recently taken a new impetus with the announcement of a “Multisectoral Strategy to Promote Alternative Economic Activities to Illegal Mining”, based on a first funding programme of 100 millions of soles (27 M€) and for the implementation of which the government plans to gather 140 million more (40.5 M€), this representing an unprecedented effort. The most significative and recent supports for the development of sustainable economic activities are:

Creation of a regional office of SERFOR (National Forest Service) and of a Centre for Productive Innovation and Technology Transfer for Mining and Environment (CITE Minero) in 2018.

13 Peru is one of the fastest-growing economies of South America : https://andina.pe/ingles/noticia-world-bank-peru-economy-to-rise-38-in-2019-738546.aspx 14 Source : Instituto Nacional de Estadistica y Estudios del Peru, PBI de los Departamentos, según actividades económicas https://www.inei.gob.pe/estadisticas/indice-tematico/pbi-de-los-departamentos-segun-actividades-economicas-9110/ 15 See Appendix C for more informations.

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Strengthening of the regional CITE Productivo through a 1.3 M€ (5 millions of soles) investment for the construction of a new centre, comprising a processing plant for agricultural products and launching of a 6.7 M€ (25 millions of soles) funding program for productive projects in 2019.

4.3.2. Regional initiatives The Concerted Regional Development Plan of Madre de Dios 2014 – 2021 (PDRC)16 is the general framework for public action planification at the regional level. It’s structured around regional objectives to implement the regional government’s vision: “a development with equity, in an orderly territory, with a competitive economy, where private investment and innovation are promoted, conserving biodiversity and sustainably taking advantage of natural resources, respecting traditional livelihoods and indigenous peoples”. The PDRC’s 6th objective (economic development) is orientated toward a sustainable development based on rational exploitation of the regional natural resources. The recently elected Regional Governor reactivated in March 2019 a multisectoral Regional Environnement Commission in charge of the Regional Climate Change Strategy17 and the Low-Emission Rural Development Strategy18. The Proyecto Especial Madre de Dios (PEMDD)19 promotes, since the beginning of the 1980s, the productive development of Madre de Dios region competitively and sustainably, with a territorial approach and integrated border management. The PEDMM acts on behalf of the regional government for all actions requiring technical skills in engineering. It works closely with all the regional stakeholders and facilitates the implementation of structuring programmes and projects. Since about ten years, the Regional Government has promoted the creation of Mesas Técnicas, technical working groups on specific agricultural, timber and non-timber products: Brasil nut (castaña), copoazu, cocoa, fish and wood. They aim to articulate better the agents involved in the value chains (individual producers and entrepreneurs, companies, research and innovation centres) and to create strategic spaces to identify needs and gaps in competitiveness, to propose actions to fill these gaps, to promote the final products and to improve the market opportunities.

16 Last update 2017 : http://regionmadrededios.gob.pe/monitor/vista/archivos/GOREMAD_949_PDRC-2017.pdf 17 As part of the national climate change strategy, each Peruvian region has been encouraged - since 2002- to develop its own climate change strategy and implementation plan. This obligation has been reaffirmed in 2018 in the National framework law on climate change. Madre de Dios is one of the last Peuvian regions without a published strategy. http://www.minam.gob.pe/wp-content/uploads/2016/05/Tercera-Comunicaci%C3%B3n.pdf 18 http://www.actualidadambiental.pe/?p=55031 19 See Appendix C for more information.

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5 Value Chain Mapping in the Border Area

5.1 Value Chain A: Amazonian mountain fruits

Among the various Amazonian fruits, we will consider for this report, four of them that can be regarded as the most promising for the Amazonian sector of the ZIF-PB: Brasil nut (Castaña), asaí, copoazu and cocoa.

5.1.1. Description of the value chain

5.1.1.1. Brazil nut (Castaña)

Brazil nuts (scientifically known as Bertholletia excelsa and locally known as castaña in Bolivia and Peru), come from one of the largest native trees of the Amazon (up to 50 meters high), growing mainly in Brazil, Bolivia and Peru. Castaña is primarily a natural product from undisturbed tropical forests even if cultivated species have been developed20. The producers collect the fallen fruit from January to March and use the central rivers systems to bring back the nuts in the processing centres.

Bolivia is the leading exporter of castaña in the world. In 2018, exports accounted USD 187 Million21making it the second non-traditional export product of the country after soybeans. Its main markets are USA (21%), Germany (20%) and the UK (20%)22. This value chain represents one of the most important economic activities of the Pando Department and the Amazonian region of Bolivia. It is estimated that more than 60,000 people are involved in the collection of castaña. Another 10,000 are dedicated to the processing, transportation and commercialisation (MDPyEP, 2018). In total, 29 companies are established in Bolivia to process and commercialize castaña, of which only four are in Pando. Most companies are concentrated in Riveralta (Beni) due to easier access through rivers to transport castaña from the producing areas (CAF, 2018).

Peru is the second producer (23% of the global production) and exporter of castaña in the world (USD 66 Million, 17% of the global market in 201823). In the last five years, Peruvian exports of castaña grew from about 25% each year, with main markets in South Corea (50%) and United States (25%). Almost all the national production comes from the Madre de Dios region where castaña is recognized as the regional ‘flag product’. The value chain involves more than 25,000 persons (17% of the regional population) and represents 70% of these persons’ incomes. Collection, processing, transportation and commercialisation represent about 12,000 direct jobs, about 20 companies and 26 castaña organizations.

There is a great set of favourable conditions for the castaña value chain in Bolivia and Peru24 and strong potential in the development of the processes of transformation and elaboration of products with greater added value of castaña, leveraged in an organic product with a designation of origin. There is a high demand for these nuts in the global market due to their powerful health benefits (rich in antioxidants, high levels of monounsaturated fatty acids, naturally gluten-free, an excellent source of dietary fibre) and cosmetic properties. The exportations have grown up of 11% between 2006 and 2016.

20 See : Castana Amazonica - Manual de cultivo, IIAP, 2007 http://iiap.org.pe/Archivos/Publicaciones/PUBL897.pdf 21 https://fundacion-milenio.org/coy-405-beni-y-pando-las-economias-cenicientas-de-bolivia/ 22 https://atlas.media.mit.edu/en/profile/country/bol/ 23 Sources : Statistical Yearbook 2017-2018 of the International Nut & Dry Fruit Council https://www.nutfruit.org/files/tech/1524481168_INC_Statistical_Yearbook_2017-2018.pdf and Gerencia de Agroexportaciones de la Asociación de Exportadores (ADEX) of Peru http://www.adexperu.org.pe/wp-content/uploads/2019/02/boletin_semanal_peru_exporta_n291.pdf 24 Namely past and on-going projects to improve the value chain. See for example the project EUROCLIMA+ ”Management of non-timber resources in the Amazon forest - Case of Peru and Bolivia" (2017 - 2020) or the ”Study to identify gaps in quality infrastructure services (QI) and proposed intervention to promote their application in the value chain of Brazil nuts in the Department of Madre de Dios”, Peruvian National Quality Institute (INACAL)/ German Metrology Institute (PTB), with the financial support of the German Cooperation and the contribution of the Madre de Dios CITE Productivo (2017-2020).

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5.1.1.2. Asaí and Copuazu

Asaí (scientifically known as Euterpe oleracea, also called Huasaí o Açaí in Brasil) palm trees are one of the most characteristic plants of the Amazon that reaches up to 25 meters in height. The plant bears the fruits between December and August. The pulp of the asaí is highly appreciated for its nutritional, antioxidant and energetic value, the reason why it is marketed as a ¨superfruit¨ in international markets.

In Pando, Bolivia, only some communities (Santa Rosa, Las Abejas, 1 de Mayo and others) are currently collecting around 240,000 tonnes f Acai per year, which is sold to two producers of Asai frozen pulp located in Cobija (MDPyEP, 2018). Commercialisation is limited to the local market and to NATUR SRL, a fruit freeze-drying plant in Santa Cruz. The asaí is in great abundance in Pando.

In Madre de Dios, Peru, it is considered that the region has advantages and favourable conditions for the large-scale production of asaí. A study led by the IIAP between 2005 and 2008 estimated the regional output of asaí around 814 tons a year. However, only a few private initiatives from producers to introduce asaí palm trees in their agroforestry projects and from companies to develop this value chain have been identified25.

On the same line, the copoazú (scientifically known as Theobroma grandiflorum, also copoasu o cupuacu) poses great possibilities for added value. Its pulp is used for the food industry and the oil of this fruit for the cosmetic industry (body creams).

In Pando, Bolivia as in Madre de Dios, Peru the production of copoazú is limited but has constantly increased during last years. Currently, this product is mainly commercialised in the local and national markets. Pando produces 3,2oo tons a year (MDPyEP, 2018) and Madre de Dios more than 800 tons a year (500 hectares cultivated with a yield of 1681 kg/ha/year, GOREMAD, 2018). In Madre de Dios, production regularly exceeds demand, implying price decreases. Some companies have recently started to transform the product (fresh pulp and seeds) locally, both in food and cosmetic products but technology transfer and market studies are needed to develop these emerging activities further.

Asaí and copuazu provide more possibilities to produce added value, since their derivative products have been extended, in other countries like Brazil and Colombia, even to the segments of cosmetics and pharmaceuticals. Both products are in increasing demand on the world market, especially the asaí which is much better known and in demand26, following the very high media coverage and significant development in Brazil. Both also provide opportunities for related diversification in the territory and can constitute a complementary activity for castaña producers due to their more extended collection period.

5.1.1.3. Cocoa

Pando produces around 6.6% of Bolivia's cocoa and accounts for 7% of the country's total area devoted to wild or cultivated cocoa. The Empoderar Program of the National Government co-funds Cacao plantation in the region and provide technical support. They informed there is an excellent demand from locals to work with cocoa, as there is a secured market from chocolate producers in La Paz and Sucre. The Bolivian Amazon Cocoa has won an International Award for the third time in a row at the Salon du Chocolat in France. Native Cocoa is relatively scarce in Pando and currently all the productions is absorbed by Bolivian chocolate producers.

Madre de Dios produces less than 4% of the Peruvian cocoa but the production comes mainly from native cacao trees and is recognised for its high quality. Many initiatives have been launched in recent years 27 to enhance the cacao chain in Madre de Dios as an alternative sustainable activity to informal mining and various success stories from MYPES and NGOs to export fine flavour native cocoa to Europe have been publicised.

25 See for example the Candela Peru company’s initiative: http://www.candelaperu.net/candela/news/conoce-nuestra-nueva-aventura-amazonica/1 26 Global açai berry market is expected to grow at a compound annual growth rate (CGAR) of 12.6% over the forecast period from 2017 to 2025 https://www.credenceresearch.com/report/acai-berry-market 27 Regional technical group - Mesa técnica - created in 2012, dedicated Strategic Plan issued in 2013. 1st Regional Forum for Cocoa and Chocolate in the UNAMD which gathers more than 500 participants in 2017.

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5.1.2 Mapping of key stakeholders in the value chain

Public organisations:

Bolivia

◦ Pando Department Government support with large-scale seedling production

◦ EMPODERAR Program provides financial assistance to associations of producers for the implementation of technology-based irrigation systems to produce agroforestry systems (with an emphasis in Cocoa).

◦ National Institute of Agricultural and Forestry Innovation (INIAF) provides technical assistance to produce agroforestry system.

◦ National Service of Agricultural Health and Food Safety (SENASAG) monitors pests and diseases.

◦ Bolivian Food Company (EBA) produces and commercialises castaña derivative products.

Peru

◦ Centre for Productive Innovation and Technology Transfer (CITE Productivo) generates and transfer knowledge and technology, carries out R&D&I activities, provides support services for innovation and productive activities.

◦ National Institute of Agrarian Innovation (INIA) develops research activities, technology transfer, conservation and exploitation of genetic resources; provides technical assistance and funding for innovative agrarian projects.

◦ National Forest and Wildlife Service (SERFOR) brings technical assistance in collection and transformation practices, business management and trade promotion.

◦ National Agrarian Health Service (SENASA) manages the agrarian health and food safety system.

◦ Madre de Dios Regional Government (GOREMAD)/Regional Directorate of Forestry and Wildlife stimulates activities to better structure and articulate the productive chains.

Private Sector, NGOs and associations:

Bolivia

◦ TAHUAMANU S.A is the leading exporter of castaña in Pando and one of the largest employers of the region.

◦ The Chamber of Commerce and industry of Cobija (CAINCO COBIJA) brings together the main companies that process amazon fruits.

◦ Federation of private business owners of Pando

◦ Associations of producers and cooperatives

Peru

◦ The leading companies (more than 70% of the exportations) are El Bosque EIRL, Agricolas y Forestales S.A.C, La Nuez S.R.L., Manutata S.A.C., Candela Peru28.

◦ Associations of producers and cooperatives, of which 22 are grouped in the regional federation (FEPROCAMD).

◦ The Chamber of Commerce and industry of Puerto Maldonado.

◦ NGOs (ACCA, CESVI, WCS, WWF...) lead actions to support producers.

28 ttp://www.siicex.gob.pe/siicex/resources/ficharegion/general/INF_GEN_MADRE_DE_DIOS.PDF

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Research, Innovation and Training

Bolivia

◦ The Amazonic University of Pando (UAP) provided training of human resources and applied research to strengthen the value chain.

Peru

◦ The Peruvian Amazon Research Institute (IIAP) and the National Amazonian University of Madre de Dios (UNAMAD) provide training, applied research and technology transfer to strengthen the value chain.

5.1.3. Key challenges and barriers to the development of the value chain

The following key challenges and barriers to the development of the Amazonian mountain fruits value chain in Bolivia and Peru have been identified:

Obstacles for production

◦ Oscillation in production: castañas are sustainably gathered from the rainforest, the yearly production levels are rather variable and highly dependent on the environmental conditions. The volume of harvested castaña is affected by the decrease of natural forest areas and global climate change. Moreover, intensive and uncontrolled exploitation, or of intensive agricultural practices near the collection areas, have a negative impact on the trees’ sustainability (e.g. the smoke from burns carried out to intensively cultivate papaya, destabilizes the fragile ecosystem necessary for pollination and tree reproduction). An unprecedented 60% drop occurred in Peru and Bolivia in 2016. Scientific projects have been developed on this topic by national research centres29.

◦ Insufficient knowledge of efficient collection and/or cultivation practices (in the rainforest or in agroforestry systems not inducing deforestation).

Obstacles for transport and transformation

◦ Poor road infrastructure and transport conditions, lack of knowledge of good practices in transportation and storage

◦ For castaña only: high demand on international markets for raw product (dried and shelled nuts) which doesn’t encourage local stakeholders to develop new locally processed products with a greater added-value,

◦ For asaí and copoazú fresh pulp: lack of cold chains for storage, processing and transport.

◦ Lack of processing equipment and training in processing methods (researchers, technical specialists, operators) or the first transformation step and even more for derivatives food (snacks, oils, dried fruits, powder, drinks, ice-cream) and cosmetic products (natural oil and butter, elaborated creams).

◦ Lack of research and innovation activities and lack of technology transfer to developing locally high-value derivatives products.

Obstacles for marketing

◦ Increasing smuggling of Bolivian castaña to Peru and Brazil due to better prices and export conditions in these countries.

◦ Absence of designation of origin. Even if quality, trackability and certification (organic and fair-trade product) have been significantly improved in the last years, the value chain stakeholders

29 Amazonian University of Pando, Research Institute of the Peruvian Amazon (IIAP - Instituto de Investigacion de la Amazonia Peruana), National Amazonian University of Madre de Dios.

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haven’t been able to generate a global designation of origin for the Amazonian non-timber product, that would allow a differentiation and premium valuation in international markets.

◦ Lack of a joint communication strategy to promote the Amazonian mountain fruits from this area and to develop a nationally and internationally visible brandmark.

◦ Insufficient knowledge of international demand characteristics, of market niches and distributor channels.

5.1.4. Opportunities for cross-border collaboration

Recent studies forecast that the global processed superfood market will continue to grow steadily within the next five years30. In that sense, one of the main opportunities of cross border collaboration lies in the transformation of organic sustainably-harvested amazon fruits and seeds into products with higher added value catered to healthy food and beverages, cosmetics, and pharmacy segments. To produce these derivative products in the border region and successfully introduce them in domestic and international market requires collaboration in the following areas:

Research and knowledge transfer in sustainable collection or production methods that preserve the Amazonian rain forest;

Technology transfer on processing methods and equipment management;

Product and marketing innovation;

Cold chains for storage, processing and transport for frozen and liquid products;

Traceability, certifications (organic and fair-trade product) and designation of bi-nation origin;

Research on the unique characteristic of Amazon fruits, nutritional content and applications in cosmetics and pharmacy.

5.2 Value Chain B: Fish-farming

5.2.1. Description of the value chain

To compensate for the significant decrease in catches in the natural environment and to develop alternatives to intensive cattle breeding and mono-cultivation (which leads to deforestation and soil depletion), fish-farming has developed very rapidly over the past fifteen years in the countries of the Amazon basin. Using non-destructive organic methods, aquaculture provides a source of food and income for local communities, without endangering the fragile ecosystem of the rain forest.

In Madre de Dios, aquaculture production units had increased from 8 fish farms in 2000 to 590 in 2017. This rapid growth reflects the keen interest and expectation of the rural population and the support provided by specialised state and regional institutions31: provision of fry, technology transfer through training, technical assistance, internships, etc. Aquaculture enterprises are developed mainly near the Interoceanic Highway and produce mainly pacu (97% of the regional fish production), and - in smaller proportion - gamitana carachama, boquichico and arapaima (paiche).

By its volume of production (average of 322 metric tons/ year between 2013 and 2017), the aquaculture activity is still incipient but benefit from very favourable natural conditions and a positive dynamic among the value chain actors. The Regional Government has promoted the creation of a regional technical working group (mesa técnica) and its Regional Management of Economic Development, jointly with the General Direction of

30 https://www.researchandmarkets.com/reports/4769209/global-superfoods-market-2019-2023 31 Instituto de Instituto de Investigaciones de la Amazonía Peruana – IIAP ; Fondo Nacional de Desarrollo Pesquero del Perú – FONDEPES ; Dirección Nacional de Acuicultura (DNA) del Ministerio de la Producción, Dirección Regional de la Producción (DIREPRO-MDD), el Organismo Nacional de Sanidad Pesquera (SANIPES) y el Proyecto Especial Madre de Dios (PEMDD).

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Aquaculture from the Ministry of Production have issued a Regional Plan of Aquaculture of the Region Madre de Dios for 2019 – 2024.

Till now, the production is almost entirely for the regional market, but trade relations with Peruvian neighbourhood regions (Pando and Cusco) are developing. The vision for 2024 of the regional plan is to meet the demand of the local market and the south of the country with quality products, high added value and with social and environmental responsibility.

The Amazonian region of Bolivia currently provides 80 per cent of the fish consumed in the country. In Pando, pisciculture is an emerging and promising activity. As evidence, around 50 small-scale fish farms have been built in the past two years with the support of the regional government32. These aquaculture units produce mainly Pacu, Tambaqui and Surubí, which are mostly commercialised in the local market and occasionally in the cities of La Paz and Santa Cruz.

5.2.2. Key challenges and barriers to the development of the value chain

The following key challenges and obstacles to the development of the fish-farming value chain have been identified:

Obstacles for production and transformation:

◦ Production, not enough formalised, organised and diversified; lack of corporate culture, fragmentation and informality33;

◦ Lack of trackability, quality and certifications;

◦ High production costs especially because of unavailability of locally competitively priced fish feed.

◦ Low technological level and limited collaboration of farms with R&D centres,

◦ Human capital with significant training deficits.

Obstacles for marketing:

◦ Poor transport conditions, difficulties in accessing the cold chain

◦ Minimal capacity to enter national and, above all, international markets.

5.2.3 Mapping of key stakeholders in the value chain

Public organisations:

Bolivia.

◦ Pando Department Government provides financial assistance to build fish-farms.

◦ Ministry of Rural Development and Land support fish-farmers with technical assistance

Peru

◦ National Fisheries Development Fund of Peru (FONDEPES) develops and promotes aquaculture activities, grants promotional credits.

◦ National Directorate of Aquaculture - Production Ministry is the technical, normative and promotional body in charge of aquaculture activities.

◦ Madre de Dios Regional Government (GOREMAD)/Production Regional Directorate support fish-farmers (aquaculture of limited resources, micro and small enterprises)

32 http://www.pando.gob.bo/transparencia/ 33 In Madre de Dios, for example only 40% of the 590 farms are officially declared and authorized ; 8 small organizations of 10 to 50 individual producers already exist but still need to be strengthened; the vast majority of producers are farmers who have diversified their productive portfolio, incursioned a few years ago in fish breeding, which is often not their main economic activity.

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◦ National Fisheries Health Agency (SANIPES) is the national reference body for fisheries and aquaculture health and safety.

Private Sector, NGOs and associations

Bolivia

◦ Fish for life (Peces para la vida) is an alliance between six institutions in Bolivia and Canada, which aims to strengthen the small-scale fisheries and aquaculture sector in Bolivia.

◦ Association of Fish Farmers Producers of Beni and Pando (ASOPRYC)

Peru

◦ 8 associations bring together 182 of the 590 producers registered in Madre de Dios.

◦ NGOs (ACCA, Pro Naturaleza) lead actions to support producers.

Research and academic

◦ Bolivia: The Amazonic University of Pando (UAP) provides training of human resources for the provision of quality tourist services.

◦ Peru: The Peruvian Amazon Research Institute (IIAP) and the National Amazonian University of Madre de Dios (UNAMAD) provide training, applied research and technology transfer to strengthen the value chain.

5.2.4. Opportunities for cross-border collaboration Pisciculture is still incipient in the border region, even though Peru exhibits a higher degree of development. Hence, Bolivia could benefit from know-how transfers related to fry production and the development of a support programme to boost this activity.

The strengthening of the value chains in both countries would also require:

Mechanisms for the certification of native fish species to export them.

Support in the development of a cold-chain.

Research on more effective production methods and training to producers.

Therefore, an opportunity for cross-border collaboration is to undertake these activities jointly in both sides of the border with the involvement of relevant local actors such as the CITE in Puerto Maldonado and the Amazonic University of Pando.

5.3 Value Chain C: Tourism

5.3.1. Description of the value chain As one of the most biodiverse areas in the world, the Amazonian sector of the ZIF-PB presents many assets for the development of ecotourism, community-based tourism and adventure tourism: the richness of the cultural heritage of indigenous communities, infinite forests, winding rivers, abundant natural life etc.

In Madre de Dios, tourism activity experienced sustained growth since the beginning of the 2000s. The number of national and international tourists increased by 50% between 2013 and 2017 and the hotel infrastructure grew from about 20 hostels in 2000 to almost 300 in 2017. The growth is concentrated in Tambopata (more of 90% of visitors and 75% of accommodations) but also benefit the two other provinces of Manu and Tahuamanu.

Puerto Maldonado annually receives around 250,000 tourists, mostly foreigners. The city basically serves as a transit point to continue the route to other places, especially the chain of ecologdes that constitute an offer of

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easy-access and high-quality accommodation in the heart of the rainforest. The Manú National Park and the Tambopata National Reserve generate significant tourist interest. There is also a significant development of adventure tourism and of anthropological tourism with visitors interested in knowing the ancestral customs of the native indigenous communities. The routes used by tourists are Lima - Cusco - Puerto Maldonado - Lima, or in much minor proportion, the direct Lima - Puerto Maldonado - Lima.

Pando has not yet been able to develop the fundamental services for the development of tourist activity, such as stable road, air or river access to tourist attractions, as well as the infrastructure and services necessary for the development of tourism products. Currently, only the municipality of Porvenir has two formal tourist offers that are inter-linked with the Amazonian fruits value chain (CAF, 2018):

(1) The Brazil Nut route. It offers tourists to visit some of the collection areas with greater historical value, in a communal property, and contact the communities dedicated to this activity

(2) Fishing route at Tahuamanu river. Which includes a trip by boat, the possibility of fishing and a lunch in the community of Cachuelita.

Most of the tourist that come to these routes prefer to stay in Cobija that has a significant network of accommodations. However, most of the guests of these hotels are nationals that come for business motives. Around 7,000 foreign tourists visit the region annually34, most of them through the Cobija Airport and during the summer season in the northern hemisphere (July, August and September). 5.3.2. Key challenges and barriers to the development of the value chain The following key challenges and barriers to the development of the tourism value chain in Bolivia and Peru have been identified:

Poor hotel infrastructure outside the Peruvian province of Tambopata;

Poor road infrastructure;

Poorly trained labour to respond to tourism needs.

Lack of a structured and visible promotion strategy.

5.3.3 Mapping of key stakeholders in the value chain

Public organisations:

Bolivia.

◦ Pando Department Government leads the articulation of the actors linked to tourism

◦ ZOFRACOBIJA promotes COBIJA as a commercial tourism destination.

◦ Vice Ministry of Tourism provides financial and technical assistance for the development of tourist routes. Promoting the touristic products of the region nationally and internationally.

◦ Municipal Government of Porvenir is promoting the Castaña route and a fishing route at Tahuamanu River.

Peru

◦ Madre de Dios Regional Government (GOREMAD)/ Directorate of Tourism and Foreign Trade leads the articulation of the actors linked to tourism.

◦ Madre de Dios Chamber of Commerce and Chamber of Turismo bring together the enterprises from the tourism sector.

◦ Tambopata National Reserve, National Park of Manu and other reserves.

34 INE.- https://www.ine.gob.bo/subtemas_cuadros/turismo_html/cuadro5.07/Cuadro5070302.htm

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Private Sector, NGOs and associations

Bolivia: Hotel Chamber of Pando

Peru: Tourism actors' associations (ecotourism actors, guias, etc.)

Research and academic

Bolivia: The Amazonic University of Pando (UAP) provides training of human resources for the provision of quality tourist services.

Peru: The Ecotourism Faculty of the National Amazonian University of Madre de Dios (UNAMAD) provides training and applied research to strengthen the value chain.

5.3.4. Opportunities for cross-border collaboration At present, there is no link worth mentioning, between the tourist value chains of the departments of Pando and Madre de Dios. Nonetheless, the opening of the new border crossing (in Extrema - San Lorenzo) allows the possibility of designing and offering cross-border circuits that link with others of high demand such as Cuzco, Titicaca lake or Uyuni Flats.

The boost of tourism activity in the border area will also require the development of the supply of quality accommodation, the improvement of local services and a bi-national promotion strategy to market this destination domestically and internationally.

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6 Selection of Priority Value Chains

The following table shows the prioritization exercise followed for the selection of the value chains.

It is the result of the deskwork analysis as well as the fieldwork (interviews and discussions with various stakeholders representing the different sectors in each of the two regions).

Table 1. Prioritization criteria in Border Region Peru-Bolivia

Prioritization criteria Weight

Cross-border Value Chains mapped

Amazonian

mountain

fruits Fish-

farming Tourism

1. Importance for cross-border cooperation and cohesion 20 16 10 15

2. Current impact on the border area’s economy 20 11 6 10

3. Existence of propitious local conditions / Urgency of support programs 20 18 15 15

4. Potential in terms of regional economy diversification and cross-sector impact 20 15 13 15

5. Potential to integrate into a global value chain 20 18 8 10

Total Score 100 77 51 65

The highest scores were obtained by the Amazonian mountain fruits and Tourism value chains, which show the highest likelihood to be competitive, scale, link with global value chains, benefit from cross-sectoral spillovers, spur related diversification and reinforce cross-border cohesion in this sector of the ZIF-PB.

This is explained by:

The current contribution of the activities linked with these value chains to the regions’ GDP (and most recent trends in the GDP share), the previous and on-going projects to support them and the alignment with national and regional governments’ priorities.

The potential of these chains in terms of regional economy diversification, cross-sector impact and increase of foreign trade (with Europe and the rest of the world),

The relevance these chains has to be contrasted with European experiences and the potential to learn from them.

The focus of work in subsequent stages with these prioritized chains is an excellent opportunity for cross-border collaboration as it can contribute to the existing - but still fragile - cross-border connectivity and complementarities (cross-border infrastructures management, collaborations between border and sanitary authorities, cooperation between local authorities and between national support services or programes, binational private initiatives etc.).

Previous binational dialogue exists on theses value chains as well as public and private support at national and territorial level. Nevertheless, it requires a focussed action plan to allow its development in a way that it can be better articulated, produce further spill overs in the border region and be more integrated into global value chains.

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7 Recommendations for Next Tasks

It is relevant to consider the following aspects to ensure the smooth development of the next activities contemplated in the project

7.1 Necessity of a narrow focus in the prioritized value chain

A narrow focus in the prioritized value chains would allow a more effective analysis in the events and working groups planned for the next tasks, avoiding long session of discussions of broad topics that don’t lead to any consensus. With narrower priorities, the interventions that emerges in the action plan will be more connected, providing greater potential for scale, scope, and spillover effects in the border region (Foray, 2017).

7.2 Key stakeholder and possible champions

Among the key players identified in the Amazonian mountain fruit value chains, the following should be highlighted as possible champions:

Bolivia

◦ Ministry of Foreign Affairs. Martin Valdez, Head of Foreign Trade and Integration Unit, is the main contact point of the national government with INNOVACT.

◦ Pando Department Government. Vice-Governor, Paola Terrazas, is key articulator in the regional. She and her team have shown strong commitment with INNOVACT and can provide important political support for the development of next tasks. Also, Edgar Polando, Director of SEDEPRO has been identified as an influential technical expert in productive development affairs.

◦ Federation of private business owners of Pando. Its President, Gerardo Lima, and its General Manager, Anelyse Salazar, are key contacts to successfully involve the private sector in the project.

◦ Amazonic University of Pando. Ludwing Arcienaga, the university chancellor, is an influential regional leader capable of articulating the academic and research efforts of the project. He also has in-depth knowledge of the Castaña value chain and could enrich the discussion during the working meetings.

Peru

◦ Ministry of Foreign Affairs, Javier Lossio, Expert in cross-border cooperation, Cross-border Development and Integration Directorate is the main contact point of the national government with INNOVACT. Jose Zapata, Director of the Decentralized Office in Madre de Dios will support the project implementation.

◦ Madre de Dios Regional Government: the Governor Luis Hidalgo Okimura is highly involved in the economic diversification policy and in the impulse of a sustainable development model. He can provide an important political support for the development of next tasks. Percy Rojas, regional manager of economic development and Jimmy Laiche, regional manager of tourism and foreign trade are keen knowers of the regional actors and issues.

◦ The Special Project Madre de Dios (PEMDD): Maria del Carmen Gibaja is the general manager of the PEMDD, Santos Ikeda Yoshikawa is manager of the Budget and planification Office and Francisco Cardenas is Manager of cross-border cooperation and international technical cooperation. They can provide an important operational support for the development of next tasks.

◦ The Chamber of Commerce of Madre de Dios: the implication of the president Samuel Bocangel Ramírez will be key to successfully involved the private sector.

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◦ The directors of the CITE Productivo, Sergio León Kanashiro and of the Peruvian Amazon Research Institute (IIAP), Ronald Corvera, are strongly involved in the sustainable development of value chains through research, innovation and technology transfer. They both have an excellent knowledge of the regional actors and issues, namely in the castaña sector.

7.3 Suggested location of the first bi-national working meeting

Peru and Bolivia are working, with the support of CAF (LATAM Development Bank), on the implementation of the Development plan for the Amazon sector of the ZIF Peru-Bolivia. Within this framework, a binational meeting took place in Puerto Maldonado on May 29 and 30.

Also, Bolivia's general elections of 2019 will be held on October 20, to elect the president and vice-president of the Plurinational State, deputies and senators for the 2020-2025 government period. The period of electoral propaganda begins on July 20. Period in which is not recommended to organize events with public sector leaders to avoid politization of the project.

Therefore, it is suggested that the first bi-national working meeting of INNOVACT II, to be held in June-July, takes places in the Bolivian side of the Border and the second bi-national meeting, which takes place in March 2020, will be hosted in the Peruvian side.

7.4 Project management and logistics

Despite the geographical proximity between Puerto Maldonado and Cobija, the trip between these cities take up to 6 hours due to poor road conditions, or it requires to pass through Brazilian territory. Hence, to ensure participation in the future bi-national working meeting, it is crucial to provide and arrange transportation from the visiting to the host region.

In general, the weaknesses in the connectivity of this border region, pose a challenge in the management of the project and in the management of resources that need to be taken into account for future tasks.

25

Contact Details of Interviewees

Bolivia/ Pando Region

Name Organization Position Email Telephone

number

Paola Terrazas

Gobierno Autónomo Departamental de Pando

Vicegobernadora paolitat2@hotmail.com 59167669797

Edgar Polanco

Servicio Departamental para la Producción (SEDEPRO)

Director 59169560003

Hernan Salvatierra

Servicio Departamental para la Producción (SEDEPRO)

Técnico 59172934471

Alejandra Tellez Gobierno Autónomo

Departamental de Pando Jefa Unidad de Turismo 59174670802

Gleysi Suarez

Gobierno Autónomo Departamental de Pando

Secretaria Departamental de Planificación

59176105213

Luis Arcienaga EMPODERAR Encargado arcilufer@hotmail.com 59170311334

Ludwing Arcienaga Universidad Amazónica de Pando Rector 59167667729

Mario Valverde ADEMAF Pando Director 59168214737

Gerardo Lima Melgar Federación de Empresarios

Privados de Pando Presidente 59167667599

Tatiana Cejas Zona Franca Cobija Director

59167668484

Marco Antonio Albornoz

Cooperación Alemana GIZ Asesor Técnico

Departamental en Desarrollo Productivo

marco.albornoz@giz.de 59169831395

Fernando Valdez Gobierno Autónomo Municipal de

Cobija Técnico 59170623719

Anelyse Salazar Federación de Empresarios

Privados de Pando Gerente 6899868304

Emil Tuesta Guerra

Cámara de Industria y Comercio Pando

Gerente

59176107935

Rolando Apaza TAHUAMANU S.A Gerente Financiero y

Administrativa rapaza@tahuamanu.com 59172923627

Ana Lucia Reiss Asaí del norte Propietaria y Gerente 59167660316

Mauricio Cespedes Viceministerio de Ciencia y

Tecnologia. Técnico

wmauriciohcq@hotmail.com

59170117444

David Choque EMPODERAR Director agrobolivia@gmail.com 59172576879

26

Name Organization Position Email Telephone

number

Marcelo David Sossa ADEMAF Director marcelo.sosa@ademaf.go

b.bo 59173065675

Rafael Chavez Ministerio de Culturas y Turismo

Encargado de relaciones exteriores

demir_racha@yahoo.com 59167144496

Claudia Rivera Romero Instituto Nacional de Estadística Técnico crivera@ine.gob.bo 59170328529

Miguel Molina Argandoña

Ministerio de Desarrollo Productivo y Economía Plurar

Técnico miguelmolarg@gmail.co

m 59170123302

Franklin Condori Ministerio de Desarrollo Rural y

Tierras Técnico Fcondori@sat.agro.bo 5912211088

Martin Valdez Goita Ministerio de Relaciones Exteriores Jefe Unidad Comercio Exterior e Integración

jomavaldez@gmail.com 5912408900

Vanessa Ortiz Ministerio de Relaciones Exteriores

Tecnico Unidad Comercio Exterior e Integración

ortizvanessa414@gmail.com

5912408900

Peru/ Madre de Dios Region

Name Organization Position Email Telephone

number

Ministro José Arnaldo ZAPATA LÓPEZ

Oficina Desconcentrada del Ministerio de Relaciones

Exteriores en Puerto Maldonado

Director jzapata@rree.gob.pe 982 792 565

Selva de Rosario CUYA CAMPOS

Oficina Desconcentrada del Ministerio de Relaciones

Exteriores en Puerto Maldonado

Abogada scuyac@rree.gob.pe 982 792 565

Ing. Brandi GATICA VENTURA

Servicio Nacional Forestal y Fauna Silvestre - SERFOR

Madre De Dios Coordinadora brandilidya@hotmail.com 992 212 788

José Abraham CARDOZO

MOUZULLY

Municipalidad Provincial de Tahuamanu

Alcalde abrahamcardozo@hotmail.com 982 798 117

Gaston Augusto ZAPATA ALVARADO

Municipalidad Provincial de Tahuamanu

Gerente del Desarrollo Económico

gastonza@gmail.com 958 195 387

Jimmy PONCE DE LEON

Municipalidad Provincial de Tahuamanu

Consultor - Plan de Desarrollo Integral / Plan Multianual de

Inversión (PMI)

Maria del Carmen GIBAJA SILVA

Proyecto Especial Madre de Dios - PEMDD

Gerente General marigibaja@hotmail.com 984 702 651

Ing. Santos IKEDA YOSHIKAWA

Proyecto Especial Madre de Dios - PEMDD

Jefe de la Oficina de Presupuesto y Planificación

Ing. Francisco Andrés CÁRDENAS SALAS

Proyecto Especial Madre de Dios - PEMDD

Gerente de Desarrollo Fronterizo y CTI

facs73@hotmail.com 987 250 423

Luis HIDALGO OKIMURA

Gobierno Regional de Madre de Dios (GOREMAD)

Gobernador

27

Name Organization Position Email Telephone

number

Percy ROJAS VILLALOBOS

GOREMAD Gerente Regional De Desarrollo

Económico

Ernesto HEREDIA MARTINEZ

GOREMAD Director de la Oficina de

Cooperación Técnica Internacional

Jimmy LAYCHE BARDALES

GOREMAD Director Regional de Comercio

Exterior Y Turismo jimmylayche@gmail.com 965 669 494

Joseph PORTUGAL ALVAREZ

Servicio Nacional de Sanidad Agraria - SENASA Madre de

Dios Director ejecutivo jportugal@senasa.gob.pe

983 280 676

Nelson GUERRERO CAMPOS

Servicio Nacional de Sanidad Agraria - SENASA Madre de

Dios Jefe del Área de Sanidad Vegetal

nguerrero@senasa.gob.pe

983 281 199

Ing. RONALD CORVERA

GOMRINGER

Instituto De Investigacion de la Amazonia Peruana (IIAP) –

Madre de Dios Gerente Regional rcorvera@iiap.org.pe 982 704 301

Sergio León KANASHIRO

Centro de Innovación Productiva y Transferencia

Tecnológica (CITE) de Madre de Dios

Director sleon@itp.gob.pe 991 963 282

MG. Francisco KELER RENGIFO

KHAN

Municipalidad Provincial de Tambopata

Alcalde frarenca7@hotmail.com 983 724 520

Rocio ORTEGA MOLERO

Industrias Alimenticias Amazonicas – Inala E.I.R.L.

Gerente General Inala9000@yahoo.com 956 377 162

Chalo TRONCOSO

DIS-FRUTA Tambopata E.I.R.L.

Mesa Técnica del Copoazu

Gerente General

Agricultor, Presidente de la Mesa Técnica

959 768 634

Nelson KROLL KOHEL

Maderera Río Acre S.A.C.

Empresa Agricola Las Gramas S.A.C

Gerente, Agricultor, Ingeniero Forestal

28

Bibliography

CEPAL/ Economic Commission for Latin America and the Caribbean (2014) Integración regional: hacia una estrategia de cadenas de valor inclusivas, http://repositorio.cepal.org/bitstream/handle/11362/36733/1/S2014216_es.pdf

Andean Community – CAN/ Consultoria Association of European Border Regions – AEBR (2018) Estrategia andina de cooperación transfronteriza (in the INPANDES project framework).

Andean Community – CAN (2016) Caracterización de las ZIF – Ficha Bolivia-Perú (in the INPANDES project framework).

Corporación Andina de Fomento – CAF (2018)/ Consultoria INFyDE. CARACTERIZACIÓN DEL ÁMBITO DE ESTUDIO. Plan para el Desarrollo del Sector Amazónico de la Zona de Integración Fronteriza (ZIF) Perú-Bolivia.

Corporación Andina de Fomento (2018)/ Consultoria INFyDE. Plan para el Desarrollo del Sector Amazónico de la Zona de Integración Fronteriza (ZIF) Perú-Bolivia.

CEPLAN Peru (2016) Plan Estratégico de Desarrollo Nacional Actualizado, Perú hacia el 2021 https://www.ceplan.gob.pe/wp-content/uploads/files/Documentos/pedn_mayo_2016.pdf

Foray, D. (2017). The economic fundamentals of smart specialization strategies. In: S. Radosevic, A. Curaj, R. Gheorghiu, L. Andreescu and I. Wade, ed., Advances in the Theory and Practice of Smart Specialization. Academic Press.

Gobierno regional de Madre de Dios (Updated in 2017) Plan de Desarrollo Regional Concertado de Madre de dios 2014 – 2021 http://www.regionmadrededios.gob.pe/portal/archivos/comunicados/PDRC-MDD.pdf

Gobierno regional de Madre de Dios (2016) Documento prospectivo. Una mirada al 2030.

Gobierno regional de Madre de Dios/ Dirección regional de la producción (2012) Diagnostico Industrial de Madre de Dios

J.L. Rhi-Sausi N. Oddone (2012) Cooperación transfronteriza e integración: Opportunidades para el desarrollo del Perú https://www.researchgate.net/publication/263047027_Cooperacion_ Transfronteriza_e_Integracion_Oportunidades_para_el_desarrollo_del_Peru

MINAGRI Peru (2019) Propuesta del para enfrentar daños de la minería ilegal en sector La Pampa https://andina.pe/agencia/noticia-minagri-presenta-propuesta-a-madre-dios-para-enfrentar-mineria-ilegal-743916.aspx ; https://www.serfor.gob.pe/noticias/minagri-presenta-ante-el-gore-madre-de-dios-propuesta-para-enfrentar-danos-de-la-mineria-ilegal-en-sector-la-pampa

MINCETUR, Plan Regional Exportador (PERX) Madre De Dios 2025 https://www.mincetur.gob.pe/wp-content/uploads/documentos/comercio_exterior/plan_regional_exportacion/MADRE_DE_DIOS.pdf

Ministerio de Desarrollo Productivo y Economía Plural (2018). ESTRATEGIA DE DESARROLLO PRODUCTIVO E INDUSTRIAL DEL DEPARTAMENTO DE PANDO.

Peru’s Framework Law for Border Development and Integration http://sc.pcm.gob.pe/wp-content/uploads/files/politicas/Formatos/LEY%2029778.pdf

Examples of cross-border integration strategies at the local level (Peru-Bolivia):

o Creation of the Mancomunidad Binacional del Lago Titicaca http://www.alt-perubolivia.org/web/publicaciones/noticias/127-se-constituy%C3%B3-la-mancomunidad-binacional-de-municipios-del-lago-titicaca.html

o Development and cross-border integration Strategy of the Mancomunidades Municipales Amazonía de Puno (Peru) and Norte Paceño Tropical (Bolivia): http://www.rree.gob.pe/politicaexterior/Documents/8.LaMancomunidadMunicipalAmazoniaPuno-Sr.EdwenRamos.pdf

29

Stakeholder mapping

Main stakeholders in the fields of Production, Research and Innovation at the national and regional level, in Peru and Bolivia.

PERU

National

Concytec – https://portal.concytec.gob.pe/index.php National Council for Science and Technology and Technological Innovation: the governing institution of SINACYT, made up of the Academy, State Research Institutes, business organizations, communities and civil society. (Science and Technology Framework Law N° 28303). Fondecyt – http://www.cienciactiva.gob.pe/ National Fund for Scientific and Technological Development InnovatePeru – https://innovateperu.gob.pe/ Program that co-finances innovation and entrepreneurship projects to increase business productivity See the Innovate Toolbox: https://drive.google.com/file/d/1ZwlI_kO8Yfpz-vfvG56fIh1A0nlJi7fD/view Agroideas - https://www.agroideas.gob.pe/ Financing of business plans with zero reimbursement as an incentive to Associativity, Management Improvement, Technology Adoption and Productive Reconversion. INIA - National Institute of Agrarian Innovation - http://www.inia.gob.pe/ Technical agency of the Ministry of Agriculture and Irrigation (MINAGRI) and the governing body of the National System of Agrarian Innovation (SNIA). Mission: to lead research and contribute to inclusive and sustainable agricultural innovation in order to promote the productive sector with food security. SERFOR - National Forest and Wildlife Service - https://www.serfor.gob.pe/ Servicio nacional forestal y de fauna sylvestre Technical agency of the Ministry of Agriculture and Irrigation (MINAGRI). Mission: to exercise the technical and normative steering role to manage and promote the sustainability and competitiveness of the forest and wildlife sector for the benefit of