A number of initiatives at the municipal level have attempted to aggregate interests
beyond single municipalities, such as in Piura, Cusco, Cajamarca and Huancavelica. Some have been
supported by other donors, such as the Canadian International Development Agency in Piura. USAID's
Alternative Development Program continues to work closely with AMRESAM (Regional Association of
Mayors of San Martin), which has begun to operate as an intermediary that can provide technical
assistance to municipalities and pool information, resources, and a common agenda with central
government authorities.
Below the glare of the national spotlight, it may be more possible to advance democratic institutions and
lay the groundwork for a democratic decentralization program. Decentralization is already on the agenda.
The question is not 
 this will occur, but 
, though there may be only be incremental progress in this
area over the next five years.
Donor support could strategically advance this dimension of democracy in the
absence of formal decentralization, and would help prepare regional and municipal governments for the
responsibilities that will inevitably come upon them.  In the current environment there is a need to
support the following kinds of activities:
Local and regional initiatives that contribute to greater local participation in decision making,
community development and strategic planning and technical assistance to create capacity for
municipalities to generate their own resources;
Technical assistance to regional mayors' associations to develop as institutions, advocate for
municipal interests, such as decentralization, and potentially propose legislation; and
National policy debate on the need to carry out a democratic decentralization effort (rather than
mere  deconcentration  of responsibilities), and to address resource insufficiencies at the local
level. In the latter case, there is a need to reevaluate current tax policies and central government
transfer schemes as well as the generation of local revenues.
More specifically, and bearing in mind the resource limitations of the current D/G  program, the Team
recommends the following actions:
a. Work with the USAID Alternative Development (AD) Program to consolidate the San Martin
effort as a model of democratic local governance that can be replicated in other areas of Peru.
Despite the success that USAID has had in this region, there remain important questions of
sustainability and inclusion. Before the Alternative Development Program moves out of San
Martin, it is recommended that the D/G program collaborate with AD colleagues to strengthen
the sustainability of this effort (e.g., through providing technical assistance to AMRESAM to
assure its longer term leadership role, and through proposal of means for longer term revenue
In this effort, USAID should also work with a broader coalition of regional actors in San Martin,
in developing and implementing their Ten year Strategic Development Plan. This plan has been
written by a coalition of local and regional actors, led by five key institutions: AMRESAM,
Chamber of Commerce, CTAR, Association of NGOs, and the Catholic Church.
Moreover, through this local governance effort in San Martin, it is suggested that USAID D/G
use its knowledge and influence to 
make the strategic plan more participatory, inclusive, and
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