By GILBERTO LOPES*

A pandemic prodigal in renewing ideas

The coronavirus has not been defeated. Quite the contrary. The worst is yet to come, warned at the end of June the director general of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus. And he was right. The pandemic has taken on new strength in the United States, where several states – including Arizona, Texas, California and Florida – have had to reverse their efforts to normalize everyday life and economic activity, while the country has already surpassed 3,2 million cases and 135 deaths.

But it is in Latin America where the pandemic has accelerated the most. Brazil and Mexico are now the two countries with the most daily deaths. However, Brazil, with more than 1.200 in recent days, doubles the deaths that occur daily in Mexico and the United States, which hover around 600. With almost 70 deaths, Brazil is only behind the 135 in the United States. Among the ten countries with the most deaths from Covid-19, Mexico surpassed France and now occupies fifth place, while Peru, with more than ten thousand, surpassed Russia and occupies tenth. But it is Chile that tops the figures for the number of deaths per million inhabitants in Latin America, with around 330. Cities like Bogotá have seen their number of daily deaths triple in the last week. Costa Rica, which on May 31 had 1.056 cases (which meant around 350 cases per month during March, April and May), saw contagion skyrocket from June. It ended the month with 3.459 cases, which meant, in just one month, more than triple the number accumulated since the beginning of the pandemic in the country, in early March. The curve continued to rise in July, when the Ministry of Health recognized that the country had entered a phase of community contagion and that it was no longer possible to track contagion. The average of daily cases in July already reaches the total number of cases in each of the first three months of the pandemic, although the number of 19 dead until last Sunday 5 remains relatively low. Cuba, with 51 active cases, and Uruguay, with 87, last weekend, were the two Latin American countries that have been most successful in controlling the pandemic so far.

the desert cities

We are in uncharted territory, says the UNDP page [United Nations Development Program] about Covid-19. “Dozens of the world's largest cities are deserted because people stay indoors, either by choice or by government order. Around the world, shops, theatres, restaurants and bars are closing their doors.” Every day, they add, “people lose their jobs and incomes, with no way of knowing when normality will return”.

According to the International Labor Organization (ILO) “the pandemic has highlighted the great vulnerability of millions of workers and companies”. According to the most recent report by its Observatory on Covid-19, in the second quarter of 2020, the number of hours worked worldwide decreased by 14%. This is equivalent to the loss of 400 million full-time jobs. In the first quarter of the year, approximately 5,4% of these working hours were lost compared to the previous quarter of 2019. It was estimated that the greatest losses would be recorded in the Americas.

This week, from July 7th to 9th, the ILO will hold a virtual world summit on the challenges posed by economic recovery and improved reconstruction after the pandemic, in which the Secretary General of the United Nations will participate, around 70 heads of state and government and world business and union leaders. Regarding the situation in Latin America, ECLAC [Economic Commission for Latin America and the Caribbean] referred to a crisis that strikes a productive and business structure “with weaknesses accumulated over decades”. It is not a question of the effects of Covid-19, but of a much broader process, as shown in your report. In 1980, the productivity of companies in the region (on average) was 36,6% of the productivity of the United States. Forty years after the process of liberalization and openings, this productivity is now only 20%.

ECLAC estimates that “34,2% of formal employment and 24,6% of GDP in the region correspond to sectors heavily affected by the crisis resulting from the pandemic”. As a result of the crisis, “more than 2,7 million formal companies in the region would be closed, with a loss of 8,5 million jobs, not including the job reductions that occur in the companies that will continue to operate”. An impact that will be much greater in the sector of micro-enterprises and small and medium-sized enterprises. A sector whose operating conditions Benjamín Sáez, from Fundación Sol, a prestigious economic analysis organization in Chile, analyzed in detail. The study revealed that the majority of the sector is developed informally and that more than half are unable to generate profits above the minimum wage, highlighting the failure of the “entrepreneurship” proposals that the Chilean government (and also others in Latin America) suggest as alternative to the crisis.

social housing

The stories multiply. Paulette Desormeaux tells the story of life in 32-story mega-buildings in downtown Santiago, where a large number of Venezuelan migrants live, in an article published on June 22nd. The biggest buildings in Santiago – says Desormeaux – “are populated by thousands of residents who cannot stay in their homes. Johannie Graterol lives in 30 square meters with her immunodeficient eleven-month-old son and his mother. The building's corridors are narrow, there are few elevators and the huge 32-story tower houses more than two thousand people. Even though it sometimes annoys her that neighbors are loud or wandering the halls, Johannie doesn't want to go out even to ask them to turn down the volume,” she adds. “The quarantine prevents them from going out into the city, but that does not apply to the narrow corridors where they now transit to sell all sorts of products, from bread and arepas to hairdressing and manicure services. Even if they fear getting infected in the middle of the agglomeration, carrying on internal trade is their only way of surviving”.

In two years, the municipality approved the construction of 75 buildings between 30 and 43 stories high. No density limit. “Thus, real estate agents made between 200 and 700 apartments per building, where the garbage chutes are often full and clogged, and there is not enough lighting or ventilation”. So small that sometimes a person can only take five steps into their home. “Today the municipality has almost 10.500 inhabitants per square kilometer – more than Hong Kong or Singapore”. In this small world, quarantine measures cannot be respected. As you cannot do in similar buildings, in Melbourne, capital of the state of Victoria, Australia, where 19 inhabitants were forced last week to remain closed for five days, at least while they were being tested for Covid-XNUMX. The story is told by Calla Wahlquist and Margaret Simons in the English newspaper The Guardian, last Saturday 4th of July. The residents were isolated according to their lifestyle, their way of mobilizing, of gathering groups of family or friends, said the governor of Vitória, Daniel Andrews, quoted by the Guardian. The risk of community transmission is very high, he said. Residents who “are among the most vulnerable and monitored in the state of Vitória, which has a huge population of new migrants, indigenous people, people with severe mental illnesses, people who have lived experiences of family violence or homelessness”.

With the number of cases increasing, Dr. Paul Kelly, head of health services, said the confinement was an "unprecedented" measure, but necessary to preserve public health, given the vulnerability of many of the towers' inhabitants. Five hundred police officers were tasked with monitoring the quarantine in the nine towers in Flemington and north Melbourne, to ensure that "residents do not leave their small and often overcrowded apartments". There was no prior announcement. The police arrived and surrounded the place.

– Park your car and go to your house. You can't leave, the policeman told a woman who was approaching. She had gone out shopping a little while before, and when she returned, she found the place mobbed.

“It was shocking,” he said. It looked like there was some criminal activity.

Money runs out in July

All countries are trying to find a way to keep their economies functioning, without losing sight of the serious situation of millions of families who, without any income, are unable to face the dramatic conditions imposed by the pandemic. Rafael Poch-de-Feliu, former Moscow, Beijing and Berlin correspondent for the Catalan newspaper The vanguard, estimated that the pandemic is accelerating trends in economics and politics that were already developing. “The consequences that Covid-19 is having on the powers and their relationships have not changed the general trends before it. They only aggravated and accelerated them”. With ten million cases and half a million deaths recognized worldwide at the end of June (in March these figures were just 300 and 11, respectively), Poch highlighted that the general expansion of the pandemic has turned into a global threat. In March, he reminds us, “the United States approved, with the support of Democrats and Republicans, the largest rescue operation in history: two trillion dollars. The call CARES Act [Coronavirus Aid, Relief, and Economic Security Act] it is a gigantic rain of public money for the big companies and their shareholders”. Almost ten times more than that allocated to social aid. “Airline companies – including that pillar of the military-industrial complex called Boeing – receive 46 billion. Families and popular sectors only receive what Congresswoman Alexandria Ocasio-Cortez describes as 'crumbs': 2,2 billion for social aid,” said Poch. However, by July, most of these funds will already have been spent. “That means that millions of Americans will face serious difficulties. July will therefore be a crucial month in the United States,” he estimated.

Mehrsa Baradaran, Professor of Law at the University of California, Irvine, wrote last July 2 in the The New York Times about what he called “the neoliberal looting of the United States”. The current crisis – he said – “reveals that the health of the financial industry and the stock market are completely disconnected from the current financial health of the American people”. Last year was one of the best years for venture capitalists. Operating in every sector, from housing to healthcare and small businesses, they squeezed every last drop of profit, even as it cut wages, jobs and pensions where possible. In an operation that, for Baradaran, ended up debunking the myth that greater profits result in better results for society.

Nobel laureate in economics, Joseph Stiglitz, also made an incursion into the probable scenario that awaits us after the pandemic. In his opinion, expectations of a quick recovery are a fantasy. “The result of post-pandemic economies will be anemic”, he assures. Spending will decline due to the financial situation of households and businesses, and a series of crashes will destroy organizational and informational capital. Stiglitz criticized conservative objections to the increase in the deficit and debt, claiming the importance of providing necessary resources for unemployment insurance, medical care and additional support for the most vulnerable sectors.

Nouriel Roubini, professor of economics at Stern School of Business of New York University and president of the Roubini Macro Associates pointed out that the protests that spread across the United States after the murder of black George Floyd by the Minneapolis police had much deeper roots. And that discontent was not limited to the United States. He cited the cases of Bolivia, Chile, Colombia, France, Hong Kong, India and Iran and other countries that, despite protests erupting due to different events, cover up discontent over the lack of economic opportunities and corruption. It shouldn't come as a surprise, he says, considering the income inequality that has been growing for decades as a result of globalization, trade, migration and the weakening of workers' organizations.

To face this situation, the professor of economics of innovation, Mariana Mazzucato, and the professor of industrial economics, Antonio Andreoni, claimed the necessary role of the state, as “investor of first instance”, and not as “lender of last resort”, as has been the case in recent financial crises. “No more free redemptions,” they stated. “With governments spending huge sums to mitigate the economic downturn due to Covid-19, they should steer their economy towards a more sustainable future.” Fortunately – they add – governments have earmarked large sums for these investments: three trillion dollars in the United States, 850 billion in Europe or one trillion in Japan. But the money will not be enough to rescue the economy, they assure. The government should design, implement and impose conditionalities on beneficiaries, “so that the private sector operates in a way that results in more inclusive, more sustainable growth”. Far from being “directist”, these measures – such as establishing higher minimum wages, representing workers on company boards, or imposing restrictions on the distribution of dividends and bonuses for executives – would facilitate the strategic allocation of resources, so that if invest productively instead of being used in favor of petty and speculative interests.

Gilberto Lopes is a journalist, PhD in Society and Cultural Studies from the Universidad de Costa Rica (UCR).

Translation: Fernando Lima das Neves