As Phase Three of the government’s strategy to open up the economy after lockdown got under way, the ‘new normal’ looked rather familiar: urban transport full to the brim with passengers trying desperately to get to work with no heed for social distancing. Combi culture has returned it seems, albeit with people wearing masks.
The government latest easing of lockdown involved the removal of restrictions on urban and interprovincial transport, the reopening of hotels and restaurants, the reinitiating of domestic flights and the full return to normal in both the mining industry and agriculture.
Health officials wait with bated breath to see what the results of all this will bring.
The sad truth is that, official optimism notwithstanding, Peru is far from having got over the Covid-19. Though the rhythm of contagion has slowed somewhat from its peak at the beginning of June, there are still some 3,000 new cases a day being identified, according to health ministry figures. The upward gradient of total cases registered (approaching 300,000) and deaths (over 10,000) remains steep. The R-number is well above 1 in every region of the country except Lima (where it is 0.87).
And as has been repeatedly pointed out, the official figures probably bear little resemblance to reality since many people cannot access a health system struggling to deal with the crisis. The excess number of deaths for the nearly four months of lockdown are way above what is normal for this time of the year.
There is therefore a high probability that the government will need to clamp down again as the rate of growth in the number of known cases accelerates. This would likely have a further disastrous impact on output which, in its latest report on inflationary pressures, the central bank already expects to shrink by 12.5% this year.
The business community, led by Confiep, has brought maximum pressure to bear on the government to relax the rules governing lockdown. Phase One and Phase Two, initiated last month, resulted in most larger enterprises, along with many smaller ones, opening up again.
How this will play out in terms of the government’s popularity remains to be seen. Although his approval rating has slipped since the beginning of lockdown in March, Vizcarra still attracts significant backing for his strategy though it has scope to fall further in the twelve months that remain of his presidency. A fall in popularity is, by the same token, a decline in the government’s authority to implement unpopular policies.
Congress appears to sense this as an opportunity to flex its muscles. Last week it called to account no less than six ministers who are constitutionally obliged to answer the questions that members of Congress chose to put to them. It is possible, though unlikely, that Congress will seek to force the resignation of some ministers through votes of no confidence.
It also has put forward further legislation that demands that private clinics – the target of much public criticism for the extravagant prices they demand for their services – put their installations and technological resources at the disposal of the state for the duration of the Covid-19 crisis. The law gives the executive, which a week earlier reached agreement with the clinics, 45 working days to produce detailed regulations to implement the law. The executive has made it clear it will not play ball.
Assuming that there are no votes of no-confidence against cabinet members in the coming days, Vizcarra will prefer to wait until fiestas patrias at the end of July to announce a reshuffle. He will not wish to appear to be sacrificing ministers under pressure from a Congress that has repeatedly sought to pursue its own policy agenda at the expense of the government.
As we went to press, early on 4 July and after an all-night session, Congress voted to eliminate parliamentary immunity from prosecution. It did so with 82 votes in favour, 14 against and 25 abstentions. Since this would involve a change to Article 93 of the Constitution, it will need to be put to a referendum.