Abstract
Peru has become one of the most affected and infected countries by COVID-19. The expansion of the virus could not be contained by a complete lockdown and a state of emergency. In this article we discuss the principal conditions for the expansion of the new coronavirus in Peru and examine what part of the population is most affected and infected by the virus. We find that Peru’s role in the international division of labor, the country’s company structure, high levels of informality, and the general use of temporary contracts are the structural conditions on which the expansion of COVID-19 in Peru rests. This article shows that the laboring classes are the principally infected and affected by the new coronavirus. The Peruvian neoliberal development model has been responsible for the government’s limitation to implement measures according the country’s social and economic structure that might have contained the expansion of COVID-19.
Keywords
Introduction
At the end of December 2019, the world was notified about the existence of a new coronavirus in the city of Wuhang in China. This virus, SARS-COV-2 (COVID-19), rapidly spread and was declared a pandemic by the World Health Organization (WHO) on 11 March 2020. In response, Peru was the first country in Latin America to implement a nation-wide lockdown and strict quarantine measures. These measures were implemented through a declaration of a state of emergency, with the military and the police charged with controlling the population. This situation lasted for 3.5 months, from mid-March 2020 to the end of June. However, because of the expansion of the virus, in some regions the lockdown continued. In the whole of the country, the government of Martin Vizcarra maintained the prohibition on leaving one’s residence between 10 p.m. and 4 a.m.
This early response has not prevented the expansion of COVID-19 in the country. Currently (28 November 2020), Peru is ranked fourteen on the world ranking of the number of individuals infected by the virus. The slow but determined reopening of the economy seems to have increased the number of COVID-19 infections. Physical social contacts between economic actors augments the possibility for the virus to expand.
The expansion of COVID-19 in Peru during the lockdown and now in times of the reopening of the economy, appears to demonstrate the class character of the virus. Although the economic, social and health effects of COVID-19 might be diminished through concentrated efforts by the state apparatuses, the most affected are the salaried and non-salaried working class, in formal and informal situations and self-employed workers.
In this article we argue that the expansion of COVID-19 in Peru has a socioeconomic and class background. While it seems that the virus was brought into the country by travelers pertaining to what might be called the accommodated social classes, it rapidly turned into a disease of the laboring classes. First of all, these classes did not have the option to stay at home during the lockdown as was mandated by law. Second, as the big majority of these classes perform manual labor, in general, they are not able to do this work at home and, hence, they are more likely to be exposed to the virus. Third, the conditions for the expansion of the virus might have been eliminated if the government would have decided to actively intervene in the economy instead of providing late and uneven financial alleviation and repressing the population who have no other way to search for a job, income, and nutrition than by leaving their houses.
The data we use in this paper to demonstrate the expansion of COVID-19 within the laboring classes has been limited to Metropolitan Lima, which is the most infected area in Peru. We rely on data from this area because it is the most reliable data and most accessible. Furthermore, data on the rate of labor informality at district level is able be constructed and the social heterogeneity of Metropolitan Lima permits an analysis of districts that are heavily infected by COVID-19 and contain above average rates of labor informality, and thus enable a comparison between these and districts that are less infected by the virus and where the labor force is not principally informal.
As such this paper is structured in five sections. Section one provides a panoramic view on the expansion of COVID-19 in Peru and discusses the expansion of the virus and its effects. Section two argues that the neoliberal conception of the State disabled the Peruvian government’s ability to implement effective measures that might have contained COVID-19. In section three, we examine the structural conditions for COVID-19 to expand and to maintain its devastating health effects until an adequate vaccine against the virus has been developed. Section four delves into the relation between informality and COVID-19 in Metropolitan Lima. It demonstrates that the expansion of the virus is principally located in what might be called the capital’s working-class districts, characterized by above average rates of informality. In section five we present our conclusions.
The Rise of COVID-19 and Its Effects
On 16 March 2020, the Peruvian government declared the state of emergency for the whole of the country in order to contain COVID-19. Three days later a complete lockdown began. Only pharmacies, grocery stores, supermarkets, public marketplaces, and banks were accessible to the public. Essential state institutions maintained in operation though were not open to the public.
During the lockdown, the military and the police were in charge to control the movements of the population. A curfew was implemented restricting people to their house from 5 p.m. until 6 a.m. the following day. On Sundays the lockdown was for 24 hours.
As a response to the continuing expansion of the virus throughout the whole country, after months the lockdown measures were sharpened. In some parts of the country the curfew started earlier, and the use of face masks became mandatory when leaving one’s residence.
The end of the lockdown in July and the subsequent reopening of the economy has not meant that all measures to contain the spread of the virus were also lifted. At the time of writing, the use of face masks is still mandatory and a curfew remains from 11 p.m. until 4 a.m. with the state of emergency remaining in force. Furthermore, in some regions and provinces, stricter lockdown measures continue as a consequence of regional pockets of high rates of COVID-19 infections.
Despite these efforts, from the second half of May, the number of individuals infected was increasing and the death toll was rising. In Latin America, Peru occupies the fourth position regarding the number of COVID-19 affected individuals, after Brazil, Colombia, and Argentina, and in August 2020 the country rated as the world’s number one country in terms of mortality rate. It was only since mid-September that the State was finally getting control over the virus when daily reported positive cases started to reduce.
Even though the Peruvian government has been praised for its quick response to COVID-19, the measures that have been taken to keep the citizens locked in their houses have not resulted in a success. It is important to observe here that the lockdown did not impede people from getting infected as planned. As a matter of fact, what the lockdown should have impeded was actually taking place during these months of supposed social distancing. The reopening of the economy directly increased the daily number of infections: 8,000 to 9,000 infections a day became the rule rather than the exception for a period.
Although leaving one’s house was restricted to the purchase of the necessary food and to do financial transactions, a major part of the population, principally in working class districts, did not abide by these rules. In addition, the military and the police were not able to impede a massive number of people from ‘trespassing’ (Martínez, 2020). The use of force to control the population might have met violent responses.
It is possible that the government foresaw an increase of informality and massive unemployment as a consequence of the lockdown. It is to be expected that the loss of jobs and the lack of a universal social security system that would have protected individuals against the financial consequences of unemployment, has increased informality as the informal sector is the only social security individuals have when their employers or their own businesses have to close. 1 At mid-August, the unemployment rate in Metropolitan Lima reached 16.4%, a more than 100% increase since March 16 (INEI, 2020c: 1; investing.com, 2020). 2 However, not only did unemployment increase, the labor force participation rate also dropped (Weller et al. 2020: 18, 20). Moreover, the government did not account for the health consequences that an increase of informality and unemployment might have on the population. The search for jobs, income, and food by the informal and recently fired working classes have driven them into positions that expose them to catching COVID-19.
The only relief strategy the government implemented was that of short-term financial assistance. In May and June 2020, the poor, the extremely poor, and the self-employed workers, around 7 million families (Vergara, 2020), received a subsidy of around $210. In August, again a subsidy of $210 was handed out to what are called the most vulnerable families. However, this amount was not enough to finance the monthly basket of basic foodstuffs for a family of four. In 2019, the poverty line stood at around $390 per month. Thus, the subsidy of $210 is actually closer to that of being in extreme poverty, for the extreme poverty line for a family of four is set at $207 per month.
The decision to reopen the economy was primarily economically grounded. In the second trimester, the Gross Domestic Product (GDP) had reduced by 30.2%. In the first semester GDP had fallen by 17.3%. This decrease was not only the product of the almost complete standstill of the national economy (a drop of internal demand with 27.7%), but was also the result of reduced economic growth of its most important commercial partners, principally China. This caused according to statistical data of the Peruvian Central Bank and the National Institute for Statistics and Informatics (INEI, 2020b: 4), a global reduction for the prices of the country’s mining products (followed by a weak recovery) and export volumes, Peru’s main export products. 3 In the second trimester, total export value decreased by 40.3%. Gold reduced by 51.6%, zinc by 49.7%, copper by 40.7%, and lead by 22.4% (INEI, 2020a: 1, 7).
The principal sources of income of the Peruvian State are Value Added Tax (VAT) and income tax. The economic, social and sanatory crisis reduced governmental income from both sources and increased governmental expenditures in healthcare and financial assistance to the most vulnerable families. 4 The result will definitively be a phenomenal increase of the country’s fiscal deficit. The Peruvian Central Bank (Banco Central de Reserva del Perú, 2020a: 81) expects for 2020 a fiscal deficit of 9.7%, up from 1.6% in 2019. In the first semester the deficit was already 6.7%.
New health problems are slowly emerging now Peru is ‘operating’ again. These have principally to do with public transport. The previous lack of regulation and enforcement of this industry has led to an intense competition between private transport companies. Prices are also too low to properly finance the transport of citizens at current international standards of safe public transport. It is to be expected that these companies will not abide to these standards and the Peruvian citizens will not complain in order not to face increasing prices in these times of economic recession.
The Peruvian State and COVID-19
Since the 1990s, Peru has been ruled by firm neoliberal governments such as those led by Alberto Fujimori (1990–2000), Alan García (2006–2011) and Pedro Pablo Kuczynski (2016–2018) or regimes that coupled market-oriented policies with programs of social inclusion like the governments presided by Alejandro Toledo (2001–2006) and Ollanta Humala (2011–2016). In general terms, all these governments considered the market the principal mechanism to distribute the wealth produced in the country. The neoliberal constitution of 1993 radically reduced the role of the Peruvian state in productive activities. However, it should be underlined that in the neoliberal conception of how the world ‘works’, the role of the State is not reduced to an absolute minimum, or is only considered an organism that guides and regulates economic activity. The world financial crisis of 2008 showed that the State was still very necessary.
The pandemic demonstrates that only the State has sufficient power to impose measures in order to contain COVID-19, to finance the economic consequences of the expansion of the virus and to develop a vaccine. The State is not only fundamental for the economic reproduction of the system, but also for its social and ecological reproduction. The effects of COVID-19 also show that social progress in the last 20 years has been very thin, although the size of the Peruvian economy, measured in real GDP, in the years between 2000 and 2019 increased with around 145%. There are definitively more shopping malls, more cars, more credit card holders, and more internet connections than 20 years ago, however informality and underemployment have maintained high. While in 2002 it was estimated that 85.3% of all employed workers were informal workers (Gamero Requena y Carrasco, nd: np) and 42.9% of the EAP was underemployed (Murakami, 2007: 430), in 2019 still 72% of the EAP was informal (Lust, 2020: 7) and in 2018, 43.6% was underemployed 5 . Furthermore, in the period 2000–2018, including the years of impressive economic progress triggered by the commodities boom in the years between 2005 and 2011 (Lust, 2019a, 2019b: 1234), the Gini coefficient only reduced a bit more than six points, i.e., from 49.1 in 2000 to 42.8 in 2018 (Banco Mundial, 2020).
The ideology of non-intervention in the markets, one of the principal neoliberal prescriptions that was introduced in the 1990s, can be considered the main reason for the price increases of medical oxygen and medicines for individuals infected by COVID-19. These policy settings are also considered responsible for the lack of medical oxygen, the scarcity of relatively cheap medicines in public pharmacies and the oligopolistic market structure of the pharmaceutical industry (García, 2020). In Peru, many people have died because of a scarcity of medical oxygen or for not having sufficient income to pay for the dramatic price increases of medical oxygen. 6
The reduced role of the State in the economy and the preference of market-based solutions to social problems or a healthcare system that for one part is based on the market mechanism (private healthcare) and for another part is public (with differentiated units for salaried workers and informal workers), is for a considerable part responsible for the collapse of public healthcare. The permanent shortage of intensive care units and hospital beds in public hospitals causes that many individuals infected by the virus are attended in wheelchairs outside the hospital buildings, in tents in the hospital’s parking lots or not at all and stay at home connected to big oxygen cylinders. In addition, there is a lack of doctors and nurses (Caretas, 2020), although the remuneration to attract individuals to work in hospitals has increased considerably.
Notwithstanding the fact that the pressure on public healthcare is immense, its collapse is not only due to increased demand, but also to the continued lack of support from the different governments. Governmental expenses in healthcare are not near to what is expected by the Pan American Health Organization. In the last two decades, only 4% of GDP was expended on healthcare. In this context, it is interesting to observe that, when we compare Peru with Uruguay at the beginning of October, Uruguay, with only 50 deaths related or caused by COVID-19 and a total of 2,268 COVID-19 infections, spent 9% of its GDP to healthcare (Barria, 2020; Vergara, 2020: 7–8).
The idea that the private healthcare system should function in combination with public healthcare has created a segmented healthcare system, that is, a healthcare system according to income. As the mass of the population is attended in the public healthcare system, the capacity of the private system has been limited. The collapse of the public system would not be mitigated by the capacity of the private healthcare system.
The Structural Conditions for the Expansion of COVID-19 in Peru
Thus, the expansion of COVID-19 was to be expected as the country’s role in the international division of labor and the neoliberal extractivist development model that has been in place since the beginning of the 1990s creates a superfluous labor force. This is shown by the very small part of the Economic Active Population (EAP), around 30–35%, required to operate the country (Lust, 2020: 7).
In 2018, around 70% of the EAP was not necessary to ‘run’ the economic development model based on the export of the country’s commodities and investments in the extractive sectors, principally the mining sector. The sectors and branches that are directly and indirectly needed to comply with Peru’s function in the globalized capitalist world such as mining, transport, communication, finance, manufacturing, water, gas, electricity, private and social community services, and the state sector (excluding public education), provide employment to about 30% of the EAP (Lust, 2020: 7).
The complete standstill of the Peruvian economy during the lockdown heavily affected workers that are employed in very small businesses or work on their own account. Data of the INEI (2019a: 55) shows that, in 2018, about 72.4% of the EAP worked in micro companies, defined as corporations that employ between one and ten individuals.
It can be argued that informal workers are employed in companies that employ between one and five individuals or they work on their own account (ILO (International Labor Organization), 2012: np; Maloney and Saavedra, 2007: 29–30, 39; Salazar-Xirinachs and Chacaltana, 2018: 18, 20, 21). In these businesses, principally manual or low-skilled labor is performed. This type of labor can only be physically executed at the workplace or the employer should move some means of production to the residences of these workers in order to continue the productive process. This last option is not to be expected. Hence, the lockdown urged the mass of the Peruvian workers to look for other sources of income and by ‘breaking’ the lockdown they might have contributed to the expansion of COVID-19 in Peru. Previously formally employed individuals are forced to look for work in the informal sector. The precarious social and economic situation of the informally employed further aggravated when their informally businesses were forcefully closed. 7
Without the lockdown, the Peruvian economy would also have been hit hard by the outbreak and worldwide expansion of COVID-19. Not only through the reduction of the export of mining products due to diminishing demand in the Global North 8 and the reduction of the commodity prices, but also through its insertion in the globalized value chains organized by transnational capital.
The mass of micro businesses, among others the result of Peru’s role in the international division and the worldwide restructuring of productive processes since the economic crisis of the 1970s (Lust, 2020: 10–11), are incorporated in globalized productive process. As a matter of fact, in the context of a business structure dominated by micro companies, outsourcing is a highly lucrative strategy to increase profits. Fierce price competition caused by the huge number of micro enterprises, a surplus of workers that exerts downward pressure on wages, and a labor legislation that attempts to reduce the labor costs of micro enterprises (Lust, 2020: 4), provide the basic conditions for profitable outsourcing.
The worldwide reduction of productive activities and the drastic restrictions on international transport have meant an important blow to the global value chains. Complete supply chains came abruptly to a halt as the chain cut. For this reason, it can be argued that through their worldwide insertion in globalized productive processes, the Peruvian workers in micro business or self-employed workers might have contributed to the expansion of COVID-19 as it urged them to ‘trespass’ the regulations regarding social distancing when the global value chains broke down.
The lockdown caused the doors to close of micro companies, medium-sized enterprises, and big corporations. Massive layoffs are currently allowed by the government. Individuals working in micro businesses were directly fired and workers in medium-sized and big corporations maintained their salaries, saw their wages reduced or were also fired, temporarily laid-off or their working hours reduced. Data for Metropolitan Lima show that in July around 50% of the total jobs lost during the lockdown, around 1.7 million, were in companies that employed between one and ten individuals. Also, in the case of adequate employment, 9 individuals working in micro enterprises had to pay the biggest price. Adequate employment reduced by almost 70% (INEI, 2020c: 2, 6, 12).
The workers who were fired due to the pandemic were formal and informal workers. Formal workers have access to unemployment benefits. However, as these benefits are individualized and based on one’s salary, in general these benefits are not sufficient to maintain one unemployed for more than three months. Because these individuals are forced to look for work, they contribute to the expansion of the virus.
The socioeconomic welfare effects of informality are well-known. Informal workers have no contract, their labor conditions are precarious, and they do not have an unemployment insurance. Furthermore, most of them are not insured for healthcare. The complete lockdown caused extremely negative income effects for the large majority of the Peruvian labor force and contributed to the unfolding of a social and healthcare drama. 10
The reopening of the economy has principally been the restart of the activities of large companies. Of course, since July not only large but also small and medium-sized companies have restarted their businesses. However, in the case of micro businesses a restart of activities is a very difficult question. As most of these companies are of precarious nature, lots of them have closed down permanently. Furthermore, the sanatory regulations to which companies have to abide before they can reopen are very difficult to finance by these companies.
The economic problems of micro-enterprises can be clearly illustrated when we analyze the data of companies that have received loans against an average interest rate of 1.69% in the context of the reactivation of the economy. 11 Although the majority of these companies were micro or small businesses, it is but a very small part of the total number of micro and small companies in Peru. According to the National Institute of Statistics and Informatics (INEI for its acronym in Spanish), in 2018, 94.9% of all private enterprises were micro companies, defined as businesses with annual sales not higher than $176.400 (S/. 622.500) or less than 150 Taxation Units and 4.2% were small companies (annual sales between 150 and 1700 Taxation Units). In absolute numbers, these were 2,370,856 small and micro companies (INEI, 2019b: 22). Data of the Peruvian Central Bank for August 2020 show that only 410,480 of all small and micro businesses received a loan (Banco Central de Reserva del Perú, 2020b), i.e. 17.3% of all micro and small companies according to the total number of these companies in 2019.
The last structural condition that can explain the expansion of COVID-19 is the question of temporary contracts or the absence of any contract at all. The absolute majority of workers in the private sector have a temporary contract (Cuadros Luque, 2017: 55). Hence, as the companies had to close their doors, also these contracts came to an end without any possibility to proceed with a legal claim regarding the loss of income and to demand a certain compensation. This obliged these workers to not only use their unemployment benefits to survive, but also parts of their personalized retirement funds. When their savings run out, they began to look for work, resulting in more people interacting and a resulting expansion of the virus.
The question of temporary contracts or the generalization of labor instability that was introduced during the neoliberal adjustment programs in the 1990s and maintained still then is not reduced to particular businesses or companies of specific size. Public and private education use temporary contracts as also, for instance, transnational telecommunication businesses and small textile producing companies. However, the use of temporary contracts is not crucial for micro-businesses to maintain competitive because normally they do not use any contract at all.
As the big majority of the EAP labors in micro enterprises, it is easy to understand how the financial consequences of COVID-19 for these workers and their families might have given a formidable boost to the expansion of the virus. In Table 1 we present data on the type of contracts of workers in micro-companies for the years between 2004 and 2018. 12
Type of contract of workers in companies that employ one to ten individuals, excluding the own-account workers: 2004–2018 (as a percentage of total remunerated workers in micro companies, excluding own-account workers.
We believe that the percentages in these years are incorrect because they radically break with the trend of the entire series.
Source: Encuesta Nacional de Hogares del Perú, 2004–2018.
Informality and COVID-19
As argued above, we think that informality or the ‘expulsion’ to the informal sector of previously formally employed individuals has worked as a catalyst for the expansion of COVID-19. As a matter of fact, we believe that there might exist a positive relationship between the rate of informality and the rate of COVID-19 infections. This section pretends to examine this relation.
In Peru, data on informality exists at the level of departments and provinces, but not at district level. Information on the number of COVID-19-infected individuals is available at the level of departments, provinces, and districts. In order to determine the existence of a relation between the rate of informality and the rate of COVID-19 infections, data at the level of departments and provinces is not suitable. For instance, a province might have a relatively low number of COVID-19 infections in comparison with the rest of the country, but in some of its districts it might be extremely high and tightly related to the rate of informality. An analysis at the provincial level does not visualize this possible particularity.
Before we present the data, it is important to explain what is meant by the rate of informality at district level. It is not a specific number as there is no data available to calculate it. 13 In this article, the rate of informality at district level includes the percentage of individuals that labor in companies that employ between one and five individuals and the percentage of self-employed workers. In the case the rate of individuals working in companies that employ one to five individuals is higher than the average rate in Metropolitan Lima (55.5%), the rate of informality is considered to be high. The same analytical determination applies to the rate of self-employed workers. The average rate of self-employed workers at the level of Metropolitan Lima is 32.4%. Although it is only necessary that one of the two variables must be higher than the average in order to be counted as a district with high informality, in general, a more than average rate of individuals working in very small companies is ‘accompanied’ by a more than average rate of individuals working on their own account. We have considered to include the variable ‘without health insurance’ as an indicator of informality, however as formal and informally employed individuals may contract private health insurance companies, the validity of this variable reduces. 14
It is important to underline that this section only intends to find out how a more than average rate of informality is related to a more than average rate of COVID-19 infected individuals. We analyze individuals instead of companies. In the case an individual works in a very small company in the district of Villa El Salvador (with a high rate of informality) but lives in Pueblo Libre (less than average rate of COVID-19 infections), this individual is counted as working in a company that employs between one and five individuals for the district of Pueblo Libre.
In Table 2 data per district is presented on the number of individuals working in companies that employ one to five persons as a percentage of the occupied EAP, the number of individuals classified as self-employed workers as a percentage of the occupied EAP, and the number of infected individuals by COVID-19 as a percentage of total habitants per district. The average rate of infections at the level of Metropolitan Lima is calculated on the basis of total number of confirmed COVID-19 infections in Metropolitan Lima as a percentage of total habitants in Metropolitan Lima. This rate is 3.4% (data for 1 October 2020).
The average rate of individuals that labor in companies that employ one to five individuals and own-account workers as a percentage of the occupied EAP, and the percentage of COVID-19-infected individuals, according to corresponding districts in Metropolitan Lima in 2020.
Source: INEI (2019c: 1888–1969). These are data of the census population of 2017.
Source: INEI (2019d: 2221–2333). These are data of the census population of 2017.
Source: https://cloud.minsa.gob.pe/apps/onlyoffice/s/XJ3NoG3WsxgF6H8?fileId=613439 (accessed 28 September 2020). Data on COVID-19 infections per district (data for 1 October 2020) is located at https://reliefweb.int/sites/reliefweb.int/files/resources/Per%C3%BA%20-%20Situaci%C3%B3n%20COVID-19%20-%20Lima%20Metropolitana%20%28al%2001%20de%20octubre%20de%202020%29.pdf (accessed 10 October 2020).
The data in Table 2 show that a positive relation might be established for various districts between the rate of informality and the rate of COVID-19 infections. Districts that have a high rate of informality and a high rate of COVID-19 infections are Barranco, La Victoria, Cercado de Lima, El Agustino, Independencia, Pucusana, Rimac and Santa Anita. The total population in these districts is 1,411,001. The districts with a low rate of informality and a low rate of COVID-19 infections are Chorrillos, La Molina, Los Olivos, Magdalena del Mar, Pueblo Libre, Punta Negra, San Bartolo, San Borja, San Martín de Porres, San Miguel and Santiago de Surco. The total population of these districts is 2,527,071. The overall number of individuals that live in districts for which a positive relation can be established between the rate of informality and the rate of COVD-19 infections is 3,938,072.
Some districts are characterized for having a low rate of informality and a high rate of COVID-19 infections. The districts with this relation are Breña, Chaclayo, Jesus María, Lince, Miraflores, San Isidro, San Luis, Santa María del Mar and Surquillo. The total population living in these districts is 646,052.
In Jesus María many hospitals and state institutions are located, for instance the National Institute for Identity and Civil Status. Furthermore, it is adjacent to one of the principal avenues in Lima, the Brasil Avenue. The district of Breña is located between two principal COVID-19-infected avenues: the Brasil Avenue and the Venezuela Avenue. Agglomerations of individuals in these areas are one of the principal causes of the expansion of the virus. For its centric character and popular attractiveness, the district of Miraflores should be excluded from our analysis. In San Luis the principal fruit market is located that attract small and micro businesses from in and outside Metropolitan Lima. 15 The total number of individuals living in the districts that might be excluded from our analysis on the relationship between the rate of informality and the rate of COVID-19 infections is 356,202.
The number of individuals that live in districts that combine a high rate of informality and a low rate of COVID-19 infections is very large. These districts are: Ate, Ancón, Carabayllo, Cieneguilla, Comas, Lurigancho, Lurin, Pachacamac, Puente Piedra, Punto Hermoso, San Juan de Lurrigancho, San Juan de Miraflores, Santa Rosa and Villa Maria del Triunfo. The total number of individuals living in these districts is 4,566,246. The total number of individuals who live in these 14 districts with high informality and low rates of COVID-19 infections, and persons that live in districts with a low rate of informality and a high rate of COVID-19 infections, excluding the mentioned districts above, is 4,856,096, that is, 55.2% of the total population of Metropolitan Lima.
The principal reason for this (negative) result is the fact that there are remarkable size differences between the Metropolitan Lima districts. Santa Maria del Mar, for instance, is the smallest district (1,090 inhabitants), but has a COVID-19 infection rate of 7.1%. San Lurrigancho is Metropolitan Lima’s biggest district with 1,150,470 residents, but has an infection rate of 2.7%. It has also the highest number of COVID-19 infections. It is the large number of individuals that live in this kind of working-class districts that cause the rate of COVID-19 infections to be relatively low.
In order to reduce the effect of the size differences on the relation between the rate of informality and the rate of COVID-19 infections for Metropolitan Lima, it is essential that the number of district citizens vary between definite margins. When we divide the total number of Metropolitan Lima citizens by the total number of districts, we get an average population of 222,787 per district. The lower limit might be established at one resident and the upper limit at 445,575 inhabitants. This means that we have converted the average number of district citizens in the mean.
The results of this second part of our analysis on the relation between the rate of informality and the rate of COVID-19 infections demonstrates that definitively a positive relation exists between both variables. The districts of Ate, Comas, San Juan de Lurrigancho, San Martin de Porres were excluded from our analysis as the number of their citizens is bigger than the upper limit. Following this procedure, the total number of Metropolitan Lima inhabitants was reduced to 6,464,385 and the number of COVID-19 infections to 233,957. The average rate of COVID-19 infections became 3.6%. After reducing the new total inhabitants with the number of individuals that live in what we might call the exceptional districts, data show that 53.5% of Metropolitan Lima individuals live in districts for which a positive relation exists between the rate of informality and the rate of COVID-19 infections.
The relation between the rate of informality and the rate of COVID-19 infections might be stronger when we take the uneven access to health services into consideration. It is to be expected that individuals working in the informal sector have difficulties to access these services due to financial barriers. As a consequence, the number of COVID-19 infections might be much higher than reported. Furthermore, the precarious financial and labor situation of informally employed individuals might not ‘allow’ them to report themselves sick due to a COVID-19 infection.
Research on the mortality rate in working-class districts appears to be crucial in order to determine if the uneven access to health services of individuals employed in the informal sector is expressed in a more than average rate of COVID-19 mortality. This investigation would increase in importance when it also enables to establish a relation with food habits and the overall health situation in these districts.
Conclusion
COVID-19 is not a democratic virus. Although every human being can be infected, some human beings have more chance to be infected than others. The Peruvian laboring classes in Metropolitan Lima seem to be easier to be infected by COVID-19 than the accommodating classes, through our demonstration that a more than average rate of informality is related to a more than average rate of COVID-19 infections.
The lockdown and the state of emergency could not prevent the expansion of the virus. When the country started to reopen, COVID-19 got a tremendous boost. The function of Peru in the globalized capitalist world has called into existence a company structure (the big majority of the Peruvian EAP are low-skilled and are employed in micro companies) and a level of informality that have functioned as a catalyst for the expansion of COVID-19. The general use of temporary contracts, the product of the neoliberal adjustment programs in the 1990s, enabled the companies to rapidly reduce personnel and labor costs, but also forced their former workers to put their lives and of others in danger by neglecting social distancing. For these workers the question has been simple: dying from hunger or from COVID-19.
A social and economic structure that contributes to the expansion of COVID-19, a development model that through the elimination of the regulating role of the State and the privatization of its social obligations has converted the country in a permanent social emergency, leading to the incapacity of the government to develop and implement measures against the expansion of COVID-19 in accordance with the country’s characteristics, makes discussions over the future design of the social and economic structure of Peruvian society and the role of the State in society more than urgent. These discussions should begin with the current economic development model.
COVID-19 has demonstrated that the prevailing model must change if Peru wants to be prepared for new pandemics. It has shown that Peru has being living in an economic statistical fantasy, where some believed that the country was near of becoming a member of the organization of the most advanced capitalist countries, that is, the OECD (CEPLAN, 2014). However, as recounted here economic development in the last twenty years has been very thin. Peru is still heavily depended on foreign direct investments in its extractive sector and for the demand for its commodities, the laboring classes are principally performing manual labor, the big majority of the EAP is informal and is employed in very small companies characterized by low productivity, and healthcare is structurally deficient. Without acknowledgement of these factors, it will be difficult to prepare effectively for future pandemics and avoid repeating Peru’s experience with COVID-19.
