Realistic proposals to make the coronavirus era a time of change
Hans-Jürgen Burchardt1
The coronavirus has laid bare the inequalities of capitalism and made the suffering of Latin American countries even clearer. This crisis can pave the way for a redefinition of the world order that establishes criteria of justice, equality, and social and ecological transformation. To achieve this, a hard-fought battle will be necessary.
The images of the dead in the streets of the city of GuayaquilThe events in Ecuador, or in the overcrowded stadium-hospitals in Brazil, will be remembered for a long time. Soon we will read: “The virus was deadly. It was fast as lightning, invisible and unstoppable. Particularly insidious, treacherous: it fed on the old and the weak.”
These, or similar, will be the narratives that one day describe the crisis in the age of coronavirus. We will speak of an “era” because one thing is clear: by the time we have buried our dead and mourned, everything will have changed. That is why it is worthwhile to start thinking now about what we are experiencing.
Politics also kills. Since the 1980s, politics has advanced decisively and convincingly, without limits or sensitivity. Since then, both in Latin America and internationally, it has focused on optimizing conditions for financial markets, the wealthy, and corporations. It opened the door to economic globalization and hindered its social and environmental regulation. Social protection policies were neglected worldwide, and the environment was destroyed. With the development of neoliberalism, many were plunged into poverty. Today, billions of people around the world live in abject poverty. This has been a particularly obscene scenario because it has occurred, moreover, under the banner of prosperity, freedom, and democracy.
It's not just the highly infectious coronavirus that kills. The deep trenches of social inequality, the material poverty of a large part of the population, and the complete absence or fragmentation of social services are also lethal. These are all issues that politics has ignored, tolerated, or even promoted. Just as in the United States or Europe, in Latin America lives are lost not only due to the aggressiveness of a virus, but also due to social fractures, excessive workloads, and the lack of funding for care and health services.
In Latin America—as in most other regions of the Global South—social distancing is a luxury that only a minority can afford. More than half of the region's economically active population works in the informal economy. The livelihoods of entire families depend on their work in the streets and markets. Therefore, quarantine and the disruption of work mean hunger, starvation, or even death. This fuels social unrest, violence, and political conflict. Moreover, the virus does not discriminate based on borders or social class. The middle and upper classes also suffer cutbacks and feel, for the first time, how dependent their privileges are on their poorly paid employees. For this reason, quarantine cannot be the only response in the Latin American context.
The coronavirus crisis, which has quarantined a third of the world's population, is pushing many families to the limits of their resilience. Quarantine, however, also opens up spaces to think about our world after the coronavirus. We remain unprepared. We feel insecure and afraid. But perhaps we can, at least, gain something new during this forced slowdown, especially from places where there isn't a daily struggle for survival: a reflection on the future.
Strengthening Democracy. Currently, many countries find themselves in exceptional circumstances and require similar measures. The world's nations seem to be responding to the call of United Nations Secretary-General António Guterres and declaring "war on the coronavirus." However, many measures, such as military operations, curfews, and bans on gatherings, bring back unpleasant memories of times we thought were behind us. Latin American states know all too well how wars, especially domestic ones, are waged. The "corona crisis" legitimizes the concentration of power in the executive branch and makes authoritarian and repressive measures all the more appealing. How much is democracy being undermined in this fight against the coronavirus? Decisive action is as essential as maintaining maximum transparency in information regarding the measures and their implementation. Democratic rights must not be restricted in times of crisis. Special attention must be paid to social and political participation and to minorities.
Dismantling the Arms Race. The fight against the virus as an “invisible enemy” has too often been riddled with war metaphors by the leaders of the United States, Europe, China, and even Latin America. But the coronavirus knows no national borders and cannot be shot down. Whoever wants to defeat it must adjust their strategies: a first step would be the immediate suspension of all military actions, followed by the cessation of all threatening military actions, such as those by the United States toward Venezuela. Another measure should be to immediately redirect funds from military spending to financing global public health. Currently, armament spending amounts to $1,8 trillion. With funds of this magnitude, it will not only be possible to combat the coronavirus but also to establish basic healthcare in many countries of the Global South. This proposal has concrete implications for Latin America, given that the region’s military spending in 2018 increased by 3% compared to the previous year. With spending around 1,5% of its GDP, Brazil is currently the country investing the most in armaments. Decisions regarding armaments rest exclusively with the state. Europe and the North Atlantic Treaty Organization (NATO) should be leading the charge and curbing the current arms race.
Strengthening global cooperation. The cross-border pandemic demands a coordinated global response. The terrifying death toll in the United States gives a new and brutal meaning to the “America First” principle. It reminds us that isolated national efforts have failed to prevent or stem the spread of the virus. On the contrary, such approaches are exacerbating its consequences. A concerted international response would have slowed and contained the virus's spread. But multilateral cooperation has lost influence in recent years. The pandemic is, therefore, a warning to strengthen and expand multilateralism once again.
In the fight against the pandemic, the World Health Organization (WHO) has demonstrated—despite all recent criticism—the effectiveness of multilateral cooperation. The International Monetary Fund (IMF), on the other hand, flaunts its contempt for humanity by refusing to help a country like Venezuela, which has been ravaged by a social catastrophe. The lessons are simple: more resources and greater democratization for the United Nations (UN) and for regional and international organizations; immediate suspension of all sanctions against countries like Iran, Cuba, and Venezuela on humanitarian grounds; and urgent debt relief for vulnerable countries through the IMF and the Paris Club. A comprehensive international aid fund for the Global South is also necessary for this purpose. The United Nations Conference on Trade and Development's proposal for a $2,5 trillion global Marshall Plan is a step in the right direction. Every weak health system creates local reservoirs for the virus, through which new pandemic waves will spread globally in the medium term.
Transforming the global financial architecture. In the last financial crisis, those responsible (the large banks and other global players) were only bailed out thanks to drastic state intervention. This experience has not deterred these sectors in their insatiable pursuit of profit: the number of billionaires worldwide has almost doubled since 2008. Even now, there have been attempts to profit from the coronavirus crisis, as demonstrated by speculation against the euro. Economic instruments can only, to a limited extent, align financial markets with the financing of public services or with green investments. Therefore, we must eradicate neoliberal austerity policies and implement massive public loans, which must be guaranteed internationally by the IMF and regional banks such as the Inter-American Development Bank (IDB).
At the same time, we need democratic regulation of financial markets through stricter controls on loans and capital transfers. Asset and capital gains must be taxed more heavily. According to Oxfam, around 2.150 billionaires now possess more wealth than 60% of the world's population. It is time to hold these super-rich accountable and increase their tax rates. From a technical standpoint, implementation is not so difficult. In fact, each Latin American country can do it on its own. The crucial aspect of international cooperation is its potential to drain tax havens and prevent capital flight. The weakening of the London Stock Exchange is opening up excellent opportunities in this regard.
Shaping the economy with social and ecological criteria. Today, the largest economic support packages since World War II are being developed in the United States and Europe. Some Latin American countries, such as Mexico, are also attempting to contain the economic effects of the crisis through government aid programs. This support is essential to mitigate the impact of the crisis. The coronavirus era must become the era of a new global New Deal, one that not only includes everyone but also engages everyone (including businesses and the wealthy), and in which the democratic state not only clears the path but also sets the pace and establishes the objectives.
It is surprising how unimaginative many government programs have been so far. Their main focus has been stabilization and systemic maintenance. But now, especially, there are extraordinary opportunities to more strongly commit the entire economy to environmentally compatible forms of production, to reduce private transport in favor of public mobility, to expand sustainable energy sources, and so on. Special support must also be given to the local economy, to small and medium-sized enterprises, and to regional economies, and supply and production chains must be shortened, particularly with regard to sustainability criteria.
This is the moment when Latin America can realign its production matrix, reflect on the potential of its domestic market, and reduce its dependence on commodity exports, remittances, and tourism. Without drastically abandoning global trade, which, through thoughtful and intelligent regulation, can generate benefits for all, governments should consider the extent to which a re-regionalization of certain economic relationships would not only be good for the climate. The news that some countries will unexpectedly achieve their climate goals due to the “corona crisis” only seems cynical at first glance. What must be envisioned now is a social change that is both ecologically sound and socially decent, as suggested by the approaches of the so-called “just transition.”
The common good as the first commandment. If it is not only the coronavirus that kills, but also the neglect of our common goods, we must finally dedicate sufficient resources to our public services. Here, the reproductive activities of care must be revalued. 18 million people in Latin America (7% of the workforce) work in domestic service. More than 90% of them are women, and almost 80% are employed without a contract, without social security, and with low wages. Indigenous and Black people are overrepresented in this group.
Only the coronavirus crisis has highlighted the importance these activities have always held for us: they are "systemically relevant." The WHO estimates that around six million jobs worldwide in the care sector would need to be filled to meet the 2030 target of achieving Sustainable Development Goal (SDG) 3, which focuses on health and well-being. Large areas of Latin America are also experiencing the severe impact of this shortage.
The debt of healthcare systems. The most urgent task at this juncture is to rapidly bring the fractured and dysfunctional healthcare systems into a position to cope with the avalanche of Covid-19 patients. However, for the Latin American context, this would be a Herculean task, as efficient public services are scarce. This clearly demonstrates another limitation of progressive governments in Latin America over the last two decades. Even though they have lifted many people out of poverty, they have not used the enormous revenues from the commodities boom to build robust public health systems and consolidate social rights guarantees. The current situation in Venezuela is particularly tragic in this regard, but countries with comprehensive healthcare systems, such as Cuba and Uruguay, are also being subjected to an enormous stress test due to the high level of aging in their societies.
Social security. In countries with inadequate healthcare and a large informal economy, the only remaining alternative would be immediate and direct assistance for the basic security of the poor. The experience of progressive governments that implemented income transfer policies (such as Brazil under Luiz Inácio Lula da Silva and Dilma Rousseff) has shown that these measures can be highly effective and low-cost (on average, less than 1% of national GDP). The creativity in designing basic security guarantees has been demonstrated by the president of El Salvador, who not only ordered a month-long quarantine as part of an emergency plan, but also decreed a broad equalization of burdens (such as the suspension of rent, loan, and electricity payments, etc.), thus guaranteeing a basic safety net for the poorest. The Argentine government also maintains a broad emergency social policy. This policy contrasts with that adopted by Chile, which implemented an economic package amounting to a remarkable 4,7% of GDP, but which offers few measures for the vulnerable. In countries where adequate basic security strategies have not been implemented—or where the political will has been lacking—the results may not be as desired. The cost in blood will be unforgivably high, as the dramatic images from Guayaquil show.
After the coronavirus crisis, the goal must be to build the most universal public structure possible, through massive investment in health infrastructure, care, education, social protection, basic services, transportation, and the strengthening of rural areas. This can only be achieved through a collective spirit. This is where Latin America's economic elites have a primary responsibility. In some countries, their wealth concentration amounts to 60% of the national GDP. Barely any taxes are paid on these enormous fortunes. In the region, state revenues from wealth taxes represent less than 2% of GDP. By comparison, in the Organisation for Economic Co-operation and Development (OECD), they are around 8%. The progressive governments of the last two decades have failed to establish a fair tax system in any of the countries in the region.
The time of coronavirus is a moment for making decisions here and now. The pandemic has deprived the elites of their most important exit option: they can still send their money to the United States, but they can't accompany it. This is a good time to win over the wealthiest 10% of the region, to achieve a balance in the public burden, something from which they too can benefit. Viruses like Covid-19 cannot be stopped by private insurance or the walls of gated communities. What we need in the future is good care for everyone, by everyone.
But let's not fool ourselves: after the crisis, it will be like before the crisis! The shockwaves with which the coronavirus is shattering this fractured Latin America don't guarantee any change. Crises are processes in which social, economic, cultural, and political constellations are shaken, broken, and new constellations are created. But existing ones can be strengthened in the same way.
We are all paying the price for this crisis. All of us? If, after the crisis, we revert to old patterns, financial markets and banks will soon regain their dominance, austerity policies will be implemented, leading to social cuts that will claim more lives than Covid-19 has already taken. Our social services will be further depleted and offer less and less protection. If the next pandemic—or climate change, which also knows no borders—arrives and strikes these last remnants of humanity, it is unlikely that our children will be spared once again.
Today we all decide what story needs to be told. The era of coronavirus must be the era of change.
1- Professor of International and Intersocial Relations at the University of Kassel, Germany, and director of the María Sibylla Merian Center for Advanced Latin American Studies in the Humanities and Social Sciences (CALAS). Article published in Nueva Sociedad: https://www.nuso.org/articulo/coronavirus-futuro-propuestas-cambio/
[+] Thinking about the pandemic
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