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August 6, 2020

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PERU: Lockdown limits and broader challenges

BY Nicholas Watson

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President Martin Vizcarra has won a political victory after private health facilities reached an agreement with the government over the costs of treating overflow patients from the public health system. The deal came shortly after Vizcarra yesterday, 24 June, threatened to temporarily take charge of the entire private health clinic network unless a cost agreement was struck within 48 hours. The health deal provides much-needed additional capacity to treat Covid-19 patients. With 264,689 total cases, Peru currently ranks sixth in the world for its overall Covid-19 caseload. This ranking partly reflects a high testing rate. However, the reality is that the lockdown is not working as it should, while the road ahead is complicated.

More salient than the private health agreement is the fact that the infection curve is proving very difficult to flatten even as a lockdown is in force. As of today, 25 June, the quarantine has been in force for 102 days, albeit with some easing underway since May; current measures will remain in force until 30 June at least. The Covid-19 outbreak and death toll (officially at 8,856 but likely considerably higher) would undoubtedly have been greater without a lockdown, but the reality is that the quarantine has only partially worked while it has inflicted huge economic costs. New cases remain uncomfortably high at around 3,500 per day over the past fortnight (the 2,511 new cases reported on 22 June – the lowest rate in six weeks – look like an anomaly).

The situation leaves the government in a double bind. It is too early to leave lockdown altogether because of the high infection rate. However, public fatigue and indiscipline will only rise the longer the quarantine lasts and as economic damage deepens. The Central Bank (BCRP) is forecasting a 12.5% contraction this year, alongside a seven-point increase in poverty to 27.5% by year-end. If frustration and economic necessity result in incompliance (as has been evident to a degree for some time), there is an increased contagion risk, which would put the health system under renewed strain.

Beyond these immediate – and substantial – challenges, deeper questions are taking shape. For all the macroeconomic success of the last two decades, the crisis has exposed the weakness of Peru’s health infrastructure and the extent of labor informality and/or precarious employment. The political response to these issues takes varying forms; these range from a recognition that more needs to be done to tackle socio-economic inequalities in the post-pandemic era, to critiques of the lack of social discipline, all the way to a repudiation of neo-liberalism. Public receptiveness to these readings and responses is still difficult to discern but it has the potential to shape, not just the 2021 electoral horizon, but politics for years to come.

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