April 10, 2020
by Arthur Morenas, PhD candidate in political science (University of Strasbourg); his thesis is on economic policies in Perou
The main surprise in Perou with the COVID crisis was probably President of the Republic Martin Vizcarra's rather quick reaction and that of his government.
March 15, 10 days after the "first imported case" of the coronavirus in the country was announced and, while very few countries in Europe and in the United States had taken confinement measures, the first measures of "social isolation" were taken for an initial period of 15 days. A few days prior to that, the peruvian government had surprised everyone when they announced a ban on flights coming from several countries in Europe and Asia. Following the government's state of emergency declaration, the confinement rules got progressively stricter: from a curfew to the implementation of more and more stringent restrictions for outings pertaining to the purchase of essential necessities. And so, starting on April 12, outings for essential necessities are limited to Mondays, Wednesdays and Fridays for men and Tuesdays, Thursdays and Saturdays for women. For now, the confinement has been extended to April 26.
Even though these different measures were surprisingly "precocious", especially compared to the European and North American countries, they were very well applauded and enjoy a nearly complete consensus, a fact that is relatively new in a country that has recently been affected by multiple political crises that probably peaked with the peruvian congress' dissolution in 2019. The most controversal measure today is certainly the one that limits outings between men and women, its goal being to avoid having too many people at the markets and grocery stores. Logical because easy to put in place (authorizing outings according to ID numbers had been a possibility, or by the first letter of the last name, but these measures would have been much harder to implement), the measure is still, one week later, controversal: grocery shopping being done by women most of the time, crowd issues and lines have increased on the days women are allowed to go out.
In a country that has a high level of informal activities (nearly 70 % of all activities), the government also distinguished itself by setting up a significant plan to help and restart the economy, equivalent to 12 % of the country's GDP. 2.7 million people received a stimulus check of about 110 dollars for 2 weeks of confinement (and 110 for the following two) and local governments were granted huge amounts of money to distribute essential goods to the most vulnerable households, knowing better which population had the most need, despite fears of misuse of funds for personal or political gain.
This stimulus plan, even well received by the ranks that are traditionally the most "conservative" in Peruvian budget policies, is the target of disputes and concerns. Before the crisis, 2020 had been called the "universal healthcare year" , notably following president Vizcarra's announcement on July 28, 2019 of the broadening of the "complete health system" (SIS) to all Peruvians who didn't have health insurance. So the SIS was only meant for the poorest households, making it universal was supposed to imply an unprecedented effort in strengthening the public healthcare medical structures. If the more "conservative" departments in economic policies (notably some top administrators of the Ministry of Economy and Finance) has balked at any increase in fixed health expenses, it goes to say that the current public health crisis will give the Peruvian president the upper hand over the more reticent marginal groups to increase public spending, and deal with a measure that had been particularly well accepted by the majority of Peruvians. For example, the large housing complexe Villa Panamericana, built to receive athletes during the panamerican games that took place in Lima in 2019, was converted into a hospital and isolation ward for patients who have the coronavirus, and it will be difficult to reverse several of the health expenses that have currently been taken on (to increase ICUs) when the crisis passes. A budget that had been destined to increase public investments once the crisis was over has, as it is, already been allocated when the stimulus plan was announced.
One law that is more controversal, voted on by the Peruvian congress, will allow the withdrawal of close to 25 % of funds accumulated by Peruvian workers in the private pension system, in order to cover revenu losses they will incur because of the confinement. If the government was opposed to this measure, it still used it to announce a consequential reform of the private pension system, the president having said strong words against the 4 pension funds that compose this system, often accused of favoring their financial interests instead of those of their clients. Since its inception during the 1990s, the private pension system, working with individual deposits tied by law to private pension funds, is indeed being looked at with increasing distrust because of weak rates of return and huge administrative costs. Also, the current system is regularly accused of reinforcing inequalities with respect to the public pension system to which the more modest workers are affiliated, whose share distribution is reduced by the input of the highest revenus, those being tied to the private system.
Though the outcome of the coronavirus crisis is still very uncertain today, in a country with medical infrastructures that are often deficient, there is every reason to believe that the emergency measures taken have prevented the quick spread of the disease, giving the government time to adapt its response to the healthcare plan (increase in patient capacity in the hospitals, purchase of ventilators, extensive purchase of screening tests). In any case, the end of the crisis is likely to be followed by important changes in the retirement systems of the country.
 It is traditional in Perou de give a title to civil years. This title appears all year on a number of governmental communications and public documents (official journal, etc.).
Arthur Morenas, currently coordinates the Lima office of the the Institut des Amériques (at IFEA) and PhD candidate in political science (University of Strasbourg, UMR SAGE); his thesis is on economic policies in Perou (#These180 On-line video).