Covid 19 shows the high price of being a "service economy"

Serious hospital deficiencies forced the government in Peru and in all Latin American countries to enact a radical quarantine, which led to a serious loss of economic activity, jobs, income, with profound recessive effects. Quarantine equal to recession; as explained in the interview to the author of this blog on Canal Cable Vision of Trujillo, broadcast on Friday  17.4.2020, (see interview here)

It is more: the desperation by the lack of income causes that many citizens are ignoring the quarantine.

Tertiary sectors, such as tourism (hotels and transportation), gastronomy, commerce, and all kinds of services, such as hairdressing salons, cinemas, shows, in which millions of Peruvians are employed, even as independent and informal, will have a greater plummet, than not it will be mitigated by the government's timid monetarist approach measures, including:

• Release of funds to be channeled to companies via commercial banks,

• Cash bonds of close to US $ 110 per family for 3.5 million vulnerable families, in addition to delivery of grocery baskets;

• Reduction of the reference  interest rate of the Central Bank,

• Facilities for companies to temporarily fire servers;

Skewed, recessive and insufficient, compared to what should be done, and that makes us waste precious time. Measures that could not be extended if the health crisis continues.

What are the ultraliberal apostles saying now that they said that tourism and services in general could support an entire nation? The opponents of all kinds of industry and infrastructure? The promoters of indiscriminate importation and the gravediggers of protection for the national industry? The fiscal austerity gurus responsible for a $ 19 billion health infrastructure gap in a single country?

We have witnessed, as Peru has not been able to solve with internal production the vital need for mechanical respirators, anti-COVID test kits; medicines, and means of sanitary protection, which are not produced in Peru. Several universities and the armed forces offered to manufacture them, demonstrating the technical feasibility of doing so, but with the obvious time constraints, input supply, and productive capacity.

The world will live in what follows, if it is to survive, a total change of political and economic paradigms, with an emphasis on producing livelihoods for the population, ending the exorbitant privileges of the speculative financial sector, and leading to an industrialization and recovery, FD style Roosevelt, as the Schiller Institute has put it for 4 decades, and recently the President of Mexico, Antonio Manuel López Obrador.

04/19/20