• The London Financial

What went wrong with the Coronavirus Battle in Peru?

By Wiktoria Jędrzejewska, BSc Economics student at King's College London

Peru is in a terrifying yet unanticipated situation in light of the novel COVID-19 pandemic. 

Today, it has the highest per capita mortality rate resulting from coronavirus infection. Its value is a little above 1% – almost 34 thousand out of 32 million Peruvians have died as the virus continues to spread across the country.

However, one might ask: why had this actually happened to Peru? 

Before the pandemic, Peru was growing economically and stabilising politically. It had increasing national income, decreasing unemployment rate, and the lowest debt-to-GDP ratio among Latin and South American states.

Once COVID-19 spread into South America, Peruvian president, Martin Vizcarra, quickly adhered to World Health Organisation recommendations. The country went into national lockdown, with enforcements by the police and army, and closed its borders just on time. Everything seemed to be under control until the end of April. This was when numbers in Peru spiked, reaching around 3000 cases and hundreds of deaths daily.

Reasons for these terrifying statistics ought to be found in the weak socio-political relationship, bad governance of former Peruvian policy-makers, and adverse effects of preventive regulations. 

1. Weak Social Contract 

Under the term ‘weak social contract’ hides lack of adherence to lockdown and other precautionary measures as well as lack of trust in & cooperation within the government. 

On one hand, it could be considered a behavioural problem. Insubordination is a result of frustration which dominated ordinary Peruvians' lives. The economy relied heavily on tourism and commerce sectors  – which almost ceased to exist as anti-COVID-19 regulations came into life, leaving majority of the population jobless. According to surveys conducted by local media, people were worried more about loss of income than coronavirus infection. Such frustration led to breaches in coronavirus restrictions – leading to further spread of the virus in the process. 

On the other hand, previous governments gradually developed such weak social contract. Their bad governance left the country with low levels of economic development and great political instability. When President Vizcarra was elected in 2018, Peruvians were subconsciously sceptical towards his policies and today, they question his ability to properly fight the coronavirus crisis. However, this lack of adherence to new regulations is a result of constant disappointment in the former, inefficient governments. 

2. Former Bad Governance 

Previous policymakers did not only create a weak relationship with the citizens, but also left the country in bad condition to fight any crisis. Peru, even though with relatively high value of GDP, had low levels of investment in public institutions, including the healthcare system and education. Peruvian public health expert, Elmer Huerta supports this point: “These are not failures of the healthcare system, these are the consequences of a neglected healthcare system over decades". Thus, negligence of the previous governments resulted in the healthcare system's inability fight the crisis effectively.

3. Preventive Measures Backfire 

Some may argue that Peru's regulations were too strict and lockdowns too long relative to their initial COVID-19 statistics, which, in result, worsened the health crisis.

Firstly, the government’s policies halted economic processes. Some industries were at a standstill for several months. These included sectors such as tourism, transport, and commerce in which 70% of labour force was informally employed. Many private businesses, in which 40% of the labour force worked,  struggled to reach break-even point and had to shut down. People who lost their jobs and could not afford living in cities like Lima or Cusco, moved from urban to rural areas. Internal migration spread the virus from cities to the Amazon countryside, where healthcare is either non-effective or non-existent. 

Secondly, the financial stimulus package from the government did not reach half of its targeted recipients. Since almost 60% of Peruvians do not have a bank account, the money had to be distributed physically via banks. The flow of money from governmental institutions to banks and then from banks to businesses & individuals proved to be cumbersome. In addition to that, crowds in banks made these places new COVID-19 hotspots. 

Thirdly, early closure of stores increased crowds at outdoor markets. Many Peruvians buy groceries daily as they do not have means to store them – 42% of the population do not have a refrigerator at home. Frequent crowds,  use of cash, and exposition of food created a good environment for the virus to spread among the population. 

Today, Peru has only just started to experience negative trends in new coronavirus cases. Mortality rate also seems to be getting back under control. However, lack of trust between the  government and the society, bad governance resulting in bad healthcare, and adverse effects of preventive measures contributed to the fact that daily infections of COVID-19 in Peru are still in the thousands and the total number of cases is nearing 1 million.

Reference list: 

Anon (2020) Peru Coronavirus: 874,118 Cases and 33,875 Deaths - Worldometer [online]. Available from: https://www.worldometers.info/coronavirus/country/peru/ (Accessed 21 October 2020). 

Collyns, D. (2020) Peru’s coronavirus response was ‘right on time’ – so why isn't it working? [online]. Available from: https://www.theguardian.com/global-development/2020/may/20/peru-coronavirus-lockdown-new-cases (Accessed 21 October 2020). 

Naranjo Bautista, S. (2020) Why has Peru been so badly hit by COVID-19? [online]. Available from: https://devpolicy.org/why-has-peru been-so-badly-hit-by-covid-19-20200731/ (Accessed 21 October 2020). 

Peru21, R. (2020) Cae la aprobación a Vizcarra y sus ministros en plena crisis sanitaria [online]. Available from:  https://peru21.pe/politica/encuesta-datum-martin-vizcarra-cae-la-aprobacion-a-presidente-y-sus-ministros-en-plena-crisis-sanitaria noticia/?tmp_ad=50seg (Accessed 21 October 2020). 

What do you think? Let us know in the comment section below!

Interested in writing for us? Click on the 'Write For Us' button at the top of the page!

Click here to visit WallStreetOasis.com