LIMA, Apr 3 (Reuters) – Peru, which was able to accumulate savings in times of fat cows, is allocating record-breaking record resources to mitigate the impact of the coronavirus on the most vulnerable citizens.
Cash for 3.5 million households, food bags for another 2.5 million people and the release of part of the pension funds in Peru have been the boldest measures among Latin American countries that are struggling to contain the blow of the disease among the poorest.
With an economy of 220,000 million dollars, the world’s second largest copper producer is directing up to 12% of GDP to alleviate the crisis in the midst of a quarantine that has paralyzed society and left millions without jobs.
But is it enough in the fight against this disease?
Humble women and men with masks stand in long lines every day to enter banks and collect 380 soles ($ 110) that has been allowed by the Government of Martín Vizcarra, an engineer who assumed the presidency two years ago after the resignation of his predecessor involved in a case of corruption.
And in the poorest neighborhoods, the military and the police have had to climb steep hills to carry bags of food and clean water to houses made of cane and wood. 20% of the 32 million inhabitants of the South American country are still living in poverty.
Peru, which has maintained a free market economy for three decades, has been able to reduce poverty with average growth above 6% for several years. In 2001, poverty was 54.8 percent, according to official data.
Adela Charco, a 61-year-old woman who lives in one of the sand hills of Villa El Salvador in Lima, says that due to compulsory immobilization she can no longer go out to work and now she is dedicated to replacing shoes for some clients in her home.
“Previously I had TB disease and now I am afraid to go out and my health will be complicated. I am worried, I don’t know what to do … my situation is quite critical,” she said.
Meanwhile, his daughter Milena, 21, said that due to lack of resources, she left her studies a few months ago and decided to look for a job this year “but the coronavirus started.” Her father, Santos Castañeda, 60, only had a temporary job.
Milena has been one of the favored to receive cash in the Government’s aid plan, but she has to wait to be called for the day of delivery of money.
MIDDLE CLASS LIFEGUARD
However, many families caught in the pocket of poverty in Peru have not benefited and the Government has admitted some flaws in data management, in addition to errors or loss of identity documents. Even some dead people appear in the list of favored.
President Vizcarra has also launched a lifeline to the middle class by suspending the contribution to the private pension fund for two months. And those who did not contribute in the last six months due to not having a job may withdraw up to $ 580 from the fund.
It has also postponed the payment of the potable water service and coordinates with private firms to extend it to energy and gas.
“In Latin America there is no country that comes close to Peru in terms of launching such a large rescue package,” economist Carlos Anderson told Reuters. And in this eagerness it does not interest to sacrifice the fiscal strength that the country has shown.
“If we don’t do it now, we are simply going to face not only death from the pandemic, but death from poverty and despair. We must avoid social chaos,” he said.
The resources for these plans have exceeded the expenses of all the current social programs in the country, an effort whose consequences are difficult to measure but which the Government prioritizes before beginning the recovery of the economy.
The government still sees an expansion of 2% of production this year “feasible,” but analysts believe Peru will record its first negative rate since 1998.
The country has strength. With 30% of its GDP in reserves and the lowest public debt among the largest economies in the region, Peru enjoys solid fiscal stability and low inflation. And the local currency has been the least volatile in Latin America.
“We have made a great effort so that with resources from the public treasury, we can attend to the most vulnerable populations,” said Vizcarra in one of his daily press conferences to report the progress of the disease in the Andean country.
Then “will come the revival of the economy,” he said.
Until Thursday, confirmed cases with the virus totaled 1,414, with 55 deaths, according to data from the Ministry of Health.
(With additional report from Reuters TV, edited by Gabriela Donoso)