As the 100th day of lockdown passed on Tuesday 23 June, there was no shortage of media discussion on how Peru has confronted the Covid-19 pandemic with nearly 270,000 cases registered and some 9,000 dead. The number of confirmed cases is the sixth highest in the world.
Most observers agree that President Martín Vizcarra launched one of Latin America’s most strident attacks on the virus with the introduction of nightly curfews, restraints on all forms of travel, and (within the limited means of the state) a fairly fulsome economic response designed to attenuate the impact of the virus both on firms and vulnerable individuals.
But the reality of the situation is that the pandemic is far from under control and that the lifting of many of the restraints in place since 16 March threatens to accelerate contagion. The R-number is well above 1 throughout Peru except in Lima (where it is near 1). As Vizcarra put it last month “the results haven’t been exactly what we expected”.
It was clear from the beginning that it would be hard to achieve a regime of social distancing in a country characterised (in many places) by overcrowded housing and where seven out of ten workers labour in the informal economy.
As a consequence of this and the numbers of people falling ill, the effects have been more dire than most predicted at the outset. The economic impact of the lockdown has led to 2.3 million people losing their jobs according to official figures. Even if economic activity picks up in the third and fourth quarters of the year (as some predict), many of these workers will never find a proper job again.
The crisis has also laid bare the chronic deficiencies of public health and hospital provision. Health spending has for decades lagged in Peru, and the infrastructure of health posts, clinics, and hospitals has proved wholly unable to cope with a pandemic of this scale. The official figure for those who have lost their lives since 16 March grossly understates the gravity of the situation; thousands have died in their homes and even in the street for their inability to access the health system.
It is to be hoped that the Covid-19 crisis will, amongst other things, prompt a major rethink about priorities in government spending.
Further, the crisis has also revealed the huge inequalities between the health services provided by state and by the private sector. Private clinics provide good treatments for the few, while public hospitals provide poor services for the many. Private clinics now stand accused of taking advantage of their privileged position to charge patients exorbitant amounts for treatment while public hospitals lack even the oxygen needed to keep patients alive.
Vizcarra last week highlighted such disparities and even invoked Article 70 of the constitution which would enable the expropriation of private clinics in response to “public need”. Business leaders were quick to sound the alarm. They feared that this threatened the sanctity of private property, the bedrock of the liberal economy.
Whether we are on the cusp of a new era in public sector activism is far from clear. While the state has adopted a more proactive role than in any time in recent memory, Peru appears unlikely to be embarking on the route towards the kind of welfarism that typified certain European countries in the post-war period in the 1950s and 1960s.
There has been no change in the structure of power in the country, and powerful business elites will seek to prevent a fundamental shift in patterns of economic ownership. In all probability once (or if) the dust eventually settles, that inequality of power will be even more pronounced than in the past. So far as the distribution of income is concerned, inequalities will become more marked as levels of poverty in society increase.
But as the week passed, it became ever clearer that the government had no intention of socialising the health service. The deal announced on 25 June enabled a few people who were unable to receive specialist attention in the public sector to be attended in private clinics with the state picking up the tab. Hardly nationalisation.