The emergency lockdown in Peru will be extended for another two weeks, until 10 May. The previous emergency was due to be lifted this Sunday, 26 April.
Notwithstanding pressures from business and other sectors to introduce some lifting of the emergency, President Martín Vizcarra announced the new timetable in a speech on 23 April. He did so against the backcloth of appeals from doctors and nurses to maintain tight restrictions, evidence that the hospital system was struggling to cope, and that the incidence of new cases (and deaths arising) continued unabated.
As of 24 April, Peru had registered 21,648 cases of the virus and had recorded 634 deaths. This compares with 13,489 cases and 300 deaths seven days earlier. Peru has the highest number of registered cases in South America after Brazil and Ecuador.
The increase in the number of cases recorded in part reflects the increase in testing over the last two weeks. While the pandemic remains concentrated primarily in Lima and Callao, it is notable that beyond the capital the incidence of cases is much higher in the north than in the south of the country.
It is also clear that the pandemic is establishing itself in areas of dense population and low income where the health system is weak. Within Lima, there has been a notable increase, for example, in cases in San Juan de Lurigancho (Lima’s single most populous district), Cercado, San Martín de Porres and Villa El Salvador. Initially it appeared that the focus of contagion was in middle-class districts like Jesús María, Lince and Miraflores.
In his speech, Vizcarra made clear that the extension of the emergency had the support not just of the cabinet but of regional governors and local administrations. The lockdown involves a night-time curfew, the suspension of all but essential services and the prohibition of activities that involve congregations of people.
The president noted that “we have yet to reach the peak of the upward curve”. The measures were also designed to prevent a second surge in cases. However, he said that a commission will consider over the next two weeks how gradually to relax the emergency rules as of 4 May in ways that would uphold social distancing. As we went to press, it was announced that mining and fishing would be among those sectors that would benefit, along with some restaurants.
He also mentioned that the executive would formally request from Congress further powers to legislate on matters pertaining to taxation. “What we intend to do in this difficult moment” he said, “is to ensure real solidarity among all Peruvians, and there are Peruvians who can help support their compatriots”.
Alluding to this, Prime Minister Vicente Zeballos said separately that this would not involve a wealth tax but a tax on higher income earners. “In the first instance we are talking about taxing more those with more income” he said, “it would be temporary [but] it could not be just for one month”.
As of this coming week, the government plans to roll out a new programme of payments of 760 soles (around US$225) to families of those outside the formal sector (it would not apply to those receiving wages). Known as the Bono Universal Familiar, this would include roughly three-quarters of all family units. Zeballos estimated this would cost around 5 billion soles.
The only way to flatten out the upward curve is if everyone heeds the government’s message, and to do that people need to have some guarantee that they can survive under the current restrictions.
These two measures, the tax announcement and the bono, are to be welcomed. Although maybe sub-optimal in their impact (this will depend on the administrative capacity of the state), they represent a distinct change of direction in economic policy.