Dr Owain Williams By: Dr Owain Williams
Lecturer in IR and Human Security
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17 May 2020 : Neoliberalism, Poverty and COVID 2/3

This second post on neoliberalism and the vectors of poverty and inequality will focus on the impact of COVID on some LMIC countries and specific populations such as slum dwellers. I’m going to confine analysis to just two countries badly hit, Ecuador and Brazil.

First, let me start out by saying that, with a sadly ever-growing number of exceptions, many LMIC governments and health systems have responded to the crisis well with often limited resources. As yet, the pandemic has not fully taken escalated in Africa, and has been stalled in most of the Pacific and in much of South East Asia. There have been dozens of countries where measures have insulated populations from the worst, so far. Vietnam, Fiji, Argentina, the Philippines, Sierra Leone are all amongst a list of low-and-middle-income countries who have been good public health responders, thus preventing mass epidemics. In no way would I like to pathologise the Global South, even though high levels of poverty, inequality and weak health systems in most LMICs would seem to provide the perfect environments for catastrophe. Many African nations have learned from Ebola and HIV, and South East Asia countries from successive respiratory viral outbreaks.

This is all tempered by a number of caveats. While most of the pandemic has so far been fought in developed Western nations, this is unlikely to remain the case in coming months. WHO are now forecasting a quarter of a billion cases in Africa, and we can expect further waves of the virus over an uncertain future timeline. Brazil now has the 4th highest rate of infections behind the USA, Russia and the UK. Capacities to respond in the near future will depend on resources both at the state and population levels. Second, the downstream and secondary economic effects of the virus will begin to interact with unfolding outbreaks (and they are sure to happen), and economic impacts of COVID will further limit the capacities and resources available to governments and families. The economic effects of COVID are already significant in the Global South and will get far worse.

All this when lockdown and isolation are already impossible for many people in low income countries, especially those in the informal economy, or those working for daily wages.  People need to work to eat, unless food is donated or incomes are under-written. The pressures and every day political economy of new and old poverty under COVID will limit resilience and increase vulnerabilities, especially when for so many poverty is already multidimensional. Intervention and solidarity would of course save lives.

Many agencies are already indicating that Latin America is rapidly emerging as the next epicentre of the pandemic, although Argentina has done remarkably well in insulating the population from the worst. Alongside Brazil, Peru and Venezuela, Ecuador has experienced a devastating impact from COVID in the last two months. What has transpired in Ecuador is a sad textbook example of how neoliberalism and poverty have interacted aggressively with the pandemic, in what I described in the first of this trail as a co-pathogenic relationship that leads to more infections and deaths. As of May 1, Ecuador had 26,336 confirmed cases (and this has now risen to over 31,000), although low rates of testing and a remote and hard to reach population mean that these figures are very likely gross under-estimates.

All on the ground commentary in Ecuador details much, much more widespread mortality, and that the government figures have been massaged deliberately to disguise the true scale of the crisis. I wrote in March about what was happening in Guayaquil city, with the corpses of victims left in the streets, or embalmed in make-shift fashion with bed sheets, left to rest in family homes or ice cooled in baths waiting for collection. This must have been horrific. A recent story by the New York Times estimates that the death toll in that city is now thought to be 15 times higher than the official figures.

I find that the city has been run for three decades by the Social Christian Party, remaining a stubborn bubble of neoliberal governance throughout Ecuador’s long decade of high-profile reform. Guayaquil is that countries second city, is the nation’s economic hub, and has a population nearly equivalent to the capital, Quito, at some 2.7 million people. In general, Ecuador is poor, with some 25% of the population living in extreme poverty, and that figure rising to over 40% in rural and remote areas. All cities have extensive barrios and slums, and indigenous people are particularly disadvantaged. Guayaquil is no exception.

In the 1980s and 1990s the country was run by a succession of poster child neoliberal governments, with the Social Christian Party dominating at various periods. The influence of landholders and corporations on policy and government are persistent features of this period, as was a highly racialized political and economic system in which indigenous people were very much marginalised and wealth concentrated in a landed elite. Oil and metals are big business for foreign held corporations, as is plantation agriculture. Corruption, bribery and elitism had left a resource rich nation desperately poor and unequal, as is often the case.

In 2006, the government of Rafael Correa came to power and quickly established and international reputation for progressive reform in a number of areas. Human rights and equal rights for all citizens, including refugees, was one such measure of real progress. As a consequence, Ecuador has become home to some 400,000 Venezuelan refuges and a large number of Columbians. In 2009, Correa angered international financial institutions by declaring the national debt illegal and illegitimate, and ordered the default on $3 billion in government bonds. With debt issues largely ameliorated, the Correa government began a decade of governance that is marked by investment in poverty alleviation, social and welfare services, and in education and health. This was financed by progressive taxation and particularly resource and profit taxation, especially directed at foreign resource companies and the large agriculture for export sector. Even so, poverty remained a stubborn feature of the country, but social welfare and rights and access dramatically improved.

In 2017 things reverted back to the old normal with the election of Correa’s former deputy, the ironically named President Lenin Moreno. Moreno has rapidly instituted a wave of liberalisation and austerity measures, reduced taxes on companies and declared a permanent freeze on taxes on raw materials and the offshoring of profits.  In March 2019, Ecuador signed a new loan facility agreement with the IMF, accompanied a playbook of policy measures familiar to any student of Structural Adjustment Programs. There have been rapid closures of a number of public institutions, and the selling off of state held assets by privatisation. Most pertinent to the COVID crisis, much of the social and welfare programs were abruptly closed and the staff laid off. This included the sacking of nearly 3500 healthcare workers, including 300 personnel who worked in that country’s pandemic control and response team. The IMF deal last year also came with the government ending of fuel subsidies, a move too far it seems, with mass protests erupting in Quito. In response, the government relocated to the conservative bastion of Guayaquil. You can see where this is going.

The Conversation on April 23rd carries one of many reports of the sad outcome in the COVID crisis in Ecuador. Much of the country’s testing capacity is now in the private sector, and the cost for testing is too high for far too many. Hospitals have become chronically under-staffed and have been swamped, with little resources to treat people. There are reports of families scrabbling to buy oxygen cylinders in an inflated oxygen market (no pun intended, it is far too grim). The public health and pandemic response system had been largely dismantled, so measures to contain while enacted had little human capacity to do so properly. Unsurprising it is the poor and disadvantaged who have been hardest hit, despite the first infections being reported as being clearly better off victims returning from Spain. Particularly, it is those working in the informal economy and in less well-off neighbourhoods that have born the brunt of Ecuador’s epidemic. While people have turned to self-help, community resources have proven insufficient.

There have also been severe impacts and mortality in Ecuador’s chronically impoverished disabled population, who are apparently being refused hospital treatment for COVID in overwhelmed hospitals. As many as 80% of disabled people are not receiving the government’s emergency funds of $60 per month, as are many poor people lacking the necessary means of making the application online or on hand-written forms. Many people cannot write or cannot understand the messaging about the new entitlements. According to Juan Carlos (name anonymised due to fear of government repercussions), a disabled man and disabled rights worker, there have been large numbers of disabled people deaths in his home city as economic precarity has intensified:

‘Moreover, most persons with disabilities are either unemployed or have very precarious jobs. Some are involved in micro enterprises and trade. Juan Carlos explains that persons with disabilities continued working despite the government measures and restrictions. “We either die of hunger or coronavirus”, he says. “We don’t do it out of irresponsibility or bravery, we do it to survive”. A voucher scheme was established by the government to secure food for poor people, also called “emergency vouchers”. However, these vouchers only last for a few days and does not solve the long-term issues.’

Of course, the cruel irony is that President Moreno is himself disabled, a paraplegic victim of a shooting, and was responsible as Deputy President for ushering huge reforms to support the disabled in 2007. But the wider systemic austerity measures he has championed, have left the disabled population both poorer and with less access to health and social services, and at the very time they are needed most. The fate of the disabled poor is one of the great neglected areas of this crisis.

As with the USA, COVID is also proving fatal in the poor and socially marginalised indigenous population in Ecuador. In rural areas many tribes are squeezed out of traditional lands by the mines, plantations and oil fields. These people live marginally and are the subject of violence and social exclusion, and there are disturbing reports of truck drivers and regular workers carrying the virus into indigenous communities as the business of extraction continues. Hospitals are also turning away the indigenous. In Peru many of these dynamics are presently at play in the poor indigenous communities, leading to a submission to the UN that warns of ‘ethnocide by neglect’. It is also ethocide by racisim and neoliberalism, although these peoples should speak to their own oppressions.

In Brazil, the state of Amazonas also has one of highest rates of that country’s now grossly underestimated rates of infection. In April alone the BBC cites a 578% increase in the number of infections in the state capital Manaus, Brazil’s biggest urban center of indigenous poor. The health system is under funded and the large indigenous population is already chronically malnourished and impoverished, living in the city’s peripheries in slums. Many slum dwellers have lung problems, largely from biomass cooking in poorly ventilated and often windowless shanties. More generally in Brazil, it is now clear that poverty and COVID are interacting with an extreme variant of neoliberal politician, Bolsonaro, who has sowed confusion and prioritised keeping the economy open. Millions in the favelas have to continue to work anyway as they have no choice in this, and there are reports in multiple news agencies of bustling markets or queues for charities distributing food, public transport is full. Some forty per cent of Brazilians work in the informal sector, and welfare payments of $120 per month (only recently introduced) cannot support families with little or no assets or savings.  And for many of the 40 million favela dwellers, work means travelling away from the slum and doing on public transport. Another perfect storm, leading to mass graves being dug in that city.

The same issues of chronic lung conditions plague those cooking in confined spaces, as do the usual raft of chronic conditions associated with poverty. Families live together, often with many generations in the same household. With poverty, isolation for the elderly and infirm is impossible. Access to healthcare is provided mainly by the SUS teams, and while community health is to be welcomed, the reality means that more and more are simply dying at home.

The cascade of deaths emerging in Brazil is a product of multi-dimensional poverty and inequality, all driven by neoliberalism and callous neglect of people and the systems that should support them. As Brazil collapses socially, so does its economy – and this is happening to an already fragile recession hit economy very quickly indeed. The interactions between the vectors of disease associated with neoliberalism will become more aggressive and acute as the downstream and secondary economic effects of COVID become more apparent. This is the subject of the last of the three posts on neoliberalism, COVID and poverty, and I’ll be trying to get it done in the coming week.

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