Facing the pandemic and the global financial crisis: debt moratorium

Is this the time for a moratorium or a cancellation of Latin American debt? Is it the only way to have the resources to overcome the immense and deadly health infrastructure gap, which in each country can be around an average of US $ 20,000 million, in addition to sanitation and energy?

Well, this is what former presidents of the region are requesting, such as Rafael Correa, Dilma Rouseff, Evo Morales, Fernando Lugo, Alvaro García Linera (former vice president), Ernesto Samper, Jose Luis Rodriguez Zapatero, (see Petition here), among others, and It has been mentioned by the government of Argentina, and academic and political institutions in the region, as disclosed by the website of the Schiller Institute and EIR. Meanwhile, Alicia Bárcena, of ECLAC, discusses more generally the abandonment of neoliberal economic policy patterns. (see also recent post)

How “bad” can a moratorium or waiver be? In the long term, it favors the creditors themselves, since the debtors must first recover their capacity to produce physical goods, and their commercial and payment capacity, on an expanded scale. Morally, it is a sign of the shared responsibility and shared destiny of all.

It is necessary? Does anyone believe that by passing the "first peak" of the pandemic we are already safe? Will 1 month quarantine be enough or how long?

Decisions to combat the pandemic in Latin America have been extremely costly: in the absence of a viable health system, all that remained was to declare a strict quarantine, at the price of stopping a good part of economic activities. In other words, recession, in the context of a global financial crisis, pre-existing since at least 2007.

To give an example, in Peru, more than 70% of the labor force is independent (self-employment) or informal employee; many live on "day to day". The time will soon come when the "market" will be insufficient to guarantee the health of the citizenry, and it will be the State that centralizes an important part of the purchases of food and vital supplies, and distributes it directly to the population in need, through the Armed Forces, using the already known mechanisms of the Popular Eaters, Mother Clubs and Milk Glasses.

While the Minister of the Economy dreams about the "good fiscal position of Peru", arranging ridiculous games for insufficient, vital time is lost for timely decision-making.

In the international field, close, scientific and economic cooperation is expected between the largest powers: the US, China, Russia, India, the European Union: it is no longer possible to ensure health within borders, we need a world health system.

Life comes first, always, debt comes later. Don't you think?

01/04/20