鈥榃e鈥檙e invisible鈥�: Peru鈥檚 moment of reckoning on informal workers
| Mexico City
When Luis David Arias Guti茅rrez first learned of Peru鈥檚 strict coronavirus lockdown, the Lima-based street vendor supported it.
Sure, it would be tough. Like the staggering 70% of Peruvian workers that labor in the informal sector, the notebook and school-supply salesman lived largely day to day, without much savings to fall back on. But the government, it seemed, knew what it was asking of workers like him.
Peru set a global example of quick action in the face of COVID-19, implementing a nationwide lockdown March 16, soon after its first confirmed case. The government invested in respirators and hospital beds, and offered bonuses to medical professionals. It designed an economic relief package that not only offered low-interest loans to businesses and helped employers keep workers on payrolls, but also targeted the poor, vulnerable, and self-employed with vital cash transfers.
Why We Wrote This
For two decades, Peru charted its own success story, as millions joined the middle class. But challenges delivering lockdown relief are highlighting just how partial that success has truly been. Part 2 of 鈥�One pandemic, many safety nets: A global series.鈥�
But today, more than three months later, Mr. Arias feels tricked.
鈥淭he state hasn鈥檛 done anything to help me. Not with cash transfers, not with food donations,鈥� says Mr. Arias, who previously earned about $14 a day.
Editor鈥檚 note: As a public service,聽all our coronavirus coverage聽is free.聽No paywall.
He made it through one and a half months of lockdown before heading back to the streets. He and hundreds of other vendors on the block had their wares confiscated by municipal officials, and were told that to get them back, they would need to pay a set fine for breaking the lockdown, which, for some vendors, was double the value of the merchandise itself.
鈥淲hen the option is to die of hunger or hope that this illness doesn鈥檛 get you, of course you break quarantine to try and feed your family,鈥� he says. As leader of a local informal street merchant association, he knows scores of vendors who have fallen ill. Public markets have become hot spots, with nearly 8 in 10 vendors testing positive in .
Despite Peru鈥檚 lauded response efforts, it now has one of the world鈥檚 longest lockdowns, and the second-highest tally of COVID-19 cases in Latin America, with more than 264,000 cases and more than 8,000 people killed. In the region, Peru ranks only behind Brazil, which has taken a decidedly less deliberate approach to halting the pandemic. Where things went wrong, experts say, was in misunderstanding the dynamics of poverty in a country that has gained 鈥渕iddle-income鈥� status over two decades of growth.
鈥淚t鈥檚 like we decided poverty is almost over in [Peruvian] cities and we only need to focus on rural areas,鈥� says Peru-based Carmen Roca, the Latin America regional advisor for WIEGO, an international nongovernmental organization advocating for informal workers. The pandemic 鈥渋s exposing the fact that there are still a lot of people in poverty who we didn鈥檛 see before: They are earning day to day and working in difficult conditions.鈥�
Missing numbers
In a region known for economic booms and busts, Peru has been a model of steady economic success, bolstered by commodity exports and conservative fiscal policies. Millions have moved out of poverty. But that progress may have given Peruvians a false sense of security.
鈥淔or 20 years we鈥檝e been a star country in terms of macroeconomics. We鈥檝e grown extraordinarily, had fiscal discipline,鈥� says Hugo 脩opo, an economist at Grade, a development think tank in Lima. 鈥淏ut we鈥檝e forgotten to invest in the people. We鈥檝e forgotten to invest in health and education.鈥�
Peru鈥檚 $26 billion relief package is worth an estimated 12% of the country鈥檚 gross domestic product. (In comparison, the U.S. is spending about 14% of its GDP.) But reaching vulnerable households with the transfers of 380-760 soles ($110-$220) has proved challenging 鈥� particularly given outdated information on who is struggling. After Peru first announced subsidies for poor people and informal workers, so many people were accidentally excluded that two new transfer programs were created, using information from other agencies.
It isn鈥檛 for lack of trying, observers say. The government used various databases, but it became obvious early on that numbers on poverty were out of date, says Mr. 脩opo, who co-wrote a policy note on Peru鈥檚 relief package.
鈥淓rrors are unavoidable. But this is the moment when we have to learn from these mistakes,鈥� he says. 鈥淭he government needs to adapt 鈥� see the error as a tool for excellence鈥� moving forward.
鈥淲e can鈥檛 keep running on autopilot,鈥� Mr. 脩opo says.
The shortcomings of Peru鈥檚 ambitious package reflect the 鈥渇ragility of our safety nets,鈥� former finance minister Luis Miguel Castilla said in an April 15 online conference hosted by the Wilson Center. 鈥淧eru lacks the tools to reach vulnerable populations,鈥� including bank accounts 鈥� only has one.
NGOs like WIEGO offered to create a roster of its own to share with the government, but Ms. Roca says they were rebuffed. She suspects that,聽given high-profile corruption scandals in recent years, the government鈥檚 hands were tied on what kind of databases to use.
Corruption has also been to blame for some of the poor execution. Food baskets, for example, were to be distributed at the municipal level, and the government has received hundreds of complaints of irregularities, like expired products or goods removed before delivery.
Ms. Roca says the challenges in identifying who is in need clearly won鈥檛 be resolved overnight, but hopefully the pandemic will set priorities moving forward.
鈥淭his population working informally, in a sense, they have finally been seen and recognized,鈥� Ms. Roca says.
鈥淲e鈥檙e invisible鈥�
Before COVID-19, Gloria Sol贸rzano worked two informal jobs, starting around 4 a.m. each day. She鈥檇 sell fresh fruit, bringing home roughly $10, in the morning, and embroider in the afternoons. But she鈥檚 over 60 and says going out to work is too risky. She feels lucky that her adult children are helping her where they can, but they too are now without an income.
The day to day is grim: Ms. Sol贸rzano eats one meal, down from two or three a day pre-pandemic. 鈥淭he situation here is really critical, more so than in other countries, because the government isn鈥檛 taking us into account. We鈥檙e invisible,鈥� she says of informal workers. She鈥檚 the leader of the National Network of Self-Employed Workers (RENATTA), with roughly 2,000 members. She knows of three who have received a government transfer.
Meanwhile, unemployment has exploded, .
鈥淚nformal workers will multiply,鈥� Ms. Sol贸rzano predicts. 鈥淚t will be really hard to subsist. It鈥檚 not just me 鈥� it will be our reality at the national and international level. How will we move ahead after this pandemic?鈥�
Editor鈥檚 note: As a public service,聽all our coronavirus coverage聽is free.聽No paywall.
