COVID-19 Undermines Peru’s Economic Stability
In Perú, we’ve been in confinement for more than a month and don’t know exactly when the lockdown will be lifted. The state of emergency was declared (article 137.1 of Peruvian Constitution) and the restriction of some of our rights and liberties (like freedom of displacement, association or the right to work) is accepted because we need to deal with the virus, and everyone seems to be handling the situation well, inclined to a desire to resume our rights, lives and maintain our well-being. Families are staying home in order to avoid being infected with COVID-19, which is characterized by its ability to contaminate rapidly. For this reason, the government has put in practice some measures in order to guarantee people’s basic needs. Most breadwinners can’t go to work, students can’t go to schools. It seems that now we are living in a different era, in which our digital devices are our only contact with the outside. In this article, we’re going to make a recount of the measures the Peruvian government has been putting in action in order to mitigate the economic crisis that can result from the outbreak of this extremely dangerous virus.
So far, more than 45.000 victims of coronavirus have been reported and the cases increase day after day. Being at home, at the same time, helps people avoid being in contact with others and, hence, reinforces our plan of steering clear of the virus. These measures, however, involve some important economic cost. The decisions taken by each country reflect what they value more, in some cases, it can be human life and, in others, economy. Trump’s administration is being criticized because of this and he defends himself arguing that: “We cannot let the cure be worse than the problem itself.” However, both decisions promise positive and negative consequences, and the latter need to be mitigated.
Some economic sectors are still working like food industry, which can’t be paralyzed and is guaranteed to operate during this difficult time. Health professionals that work with coronavirus patients will be paid an extra 3.000 soles (885 USD) for their hazardous work on this recent time. On the other hand, tourism, commerce and other important economy sectors, considered non-essential, remain paralyzed. For this reason, Perú has put in practice the plan “Reactiva Perú”, which aims to keep our economy moving and implements other measures to protect people’s primary rights. It is noteworthy, at this point, that Perú is qualified as the best prepared country of the Pacific Alliance to confront the economic repercussions of coronavirus. An analysis of the Peruvian Economy Institute (IPE), shows that our finances are more likely to support the economic impact of COVID-19 than Colombia, Chile or Mexico. In fact, this study expresses that our country is the least indebted of the Pacific Alliance, it just represents 26.9% of our GDP. It also has savings over 15% of the GDP and, according to the analysis country risk, its debtor quality remains stable.
The Ministry of Labor and Employment Promotion (MTPE) has implemented a new way of work, which is called remote work for people that work in sectors that develop activities considered non-essential. In this case, we have for example teachers who are working from home. This new way of employment is defined in the Urgency Decree N° 026-2020 (article 16, title II) as the provision of subordinate services with the physical presence of the worker in their home or place of isolation, using any means or mechanism that enables to work outside the workplace. However, it’s necessary that the nature of the work allows them to carry on with their duties from home. Those unable to work from home may apply for a license that permits them to maintain their salary, as long as they redeem the number of hours they were paid once the coronavirus situation comes to an end. A license can be obtained to maintain the employee’s salary without the obligation to compensate these hours. This last measure was implemented by Urgency Decree N° 029-2020.
The electronic devices that employees may use can be both provided by the employer or by the worker (article 19, U.D. N°026-2020). While working remotely, employer and employees need to comply the obligations that are detailed in article 18 of the same Urgent Decree. For example, workers need to be available, during labor hours, to coordinate with their employer.
In addition, the Urgency Decree 038-2020 has been put into motion, which approves the implementation of a perfect suspension of employment with conditions, these measures beneficiate workers and employees of micro, medium, small and medium sized enterprises to fulfil their work contracts and receive an income given by the state of 760 soles (224 USD). They also will have a health service guaranteed by the State. It is also necessary to explain what a perfect suspension of employment is and how it differs from an imperfect suspension. This latter operates when workers don’t work but they maintain the validity of their work contract and keep receiving a salary. This operates, for example, with female workers who cannot work during pregnancy and absent for a lapse of time while maintaining their work contract and their salary. Another case of this are the vacations, in which you, after working hard throughout the year, can go relax on a beautiful beach in Miami and still get paid. According to the article 17.2 of the Urgency Decree N°026-2020, this imperfect suspension of labor also occurs if a worker is infected with coronavirus.
On the other hand, we have the perfect suspension of employment, which is operating in our country due to coronavirus situation. In this case, workers maintain their work contract but don’t receive a salary. Both parts, the worker and the employer, cease, for a lapse of time, to have the responsibility to comply with the obligations that are stipulated in the work contract. This is an exceptional measure and the government is privileging the agreement between workers and employers. In order to mitigate the negative consequences of this practice, workers that are under this statement, can retire part of their fond of Compensation for Length of Service (CTS) (art. 7 U.D. 038-2020).
Chapter III of Supreme Decree N° 003-97-TR is the legal normative that rules when to apply suspension. Article 12 of this Decree explains that it can operate if occurs an event that could be catalogued as force majeure or fortuitous case. In this case, we are stepping into a force majeure event because we can’t control the apparition and expansion of coronavirus and we couldn’t event prevent it, it is outside our dominance. The key point here is that this can last only for 90 days.
While measures have been taken to reduce the economic impact of the coronavirus outbreak on workers and employers, another part of society remains in the shadows because of their line of work. Hernando de Soto in his book “The Other Path” (1986) explains that the activity that these workers realize is informal because, in Perú, the cost of emerging to a formal one is too expensive. Actually, they represent 72.5% of our Economically Active Population (EAP) and 18.6% of Gross Domestic Product (GDP). The database of the Minister of Labor and Employment (MTPR) doesn’t proportionate a real number of the independent workers that live on their day to day income because most of them are informal workers and that’s a considerable issue in these times. We don’t know for example the exact number of street vendors that operate through the country. For this reason, when social isolation was first ordered, many of this people decided to disobey the mandatory quarantine justifying themselves by arguing that “if we don´t work, we don't eat”. Informal economy has been a big problem with which Peruvian economy had to deal for a long time and now more than ever.
As we maintain social isolation, there was a crucial debate on the Congress about the Administrators of Pension Funds (AFP). They are, nowadays, in the eye of the storm, and the Congress has decided that workers and employees can retire 25% of the fund that they’ve accumulated during their work years. The amount can’t be less than 4.300 (1.269 USD) and can’t exceed 12.899 soles (3.808 USD).
The International Monetary Fund has said that after coronavirus situation, a global economic recession might be lurking. Considering this, the Minister of Finance and Economy is injecting liquidity in micro, small, medium and big enterprises in order to avoid a stage of massive unemployment. For this reason, the Help Enterprise Fund is giving 300 million of soles (about 88 million USD) to maintain in float small enterprises. Secondly, they have increased the pathway of the program “Crecer”. Although, there are around 80 thousand of fixed term contracts that haven’t been renewed.
National Superintendence of Tax Administration (SUNAT) has implemented a course of action due to coronavirus situation, putting in practice the following Superintendence Resolution: N° 054-2020/SUNAT, Nº 055-2020/SUNAT and Nº 058-2020/SUNAT. This is a new manner to help alleviating enterprises tax burden. Actually, tax earnings have decreased by 17.9%. This is a measure that has been taken globally.
Finally, for those who are poor and the extremely poor, a program has been developed by the Minister of Development and Social Inclusion that is called “Yo me quedo en casa”. Its objective is to provide families in need with 380 soles (112 USD) to help them get through the current situation. However, there is still so much to do considering that, almost 7 million of Peruvians, don’t have access to public services like water or electricity.
In conclusion, as we may have seen, the government is taking a long list of measures in order to mitigate socio-economic impact of coronavirus. Nonetheless, this implicates a great challenge. Fortunately, we have maintained a stable debtor qualification which allows us now to work with the International Monetary Fund. Our National Savings allowed us to react swiftly to this Global Health Emergency. These are the days in which countries all over the world need to ponder over what they value more, which can be human life or economy cost. Decisions need to be taken in accordance with human rights. Article 3 of the Universal Declaration of Human Rights expresses that we all have the right to the life and it is the government's duty to protect it. Now, during these difficult times, we need to work together, government and society because we both form the State.
I’d like to quote the definition of State of Victor Garcia Toma, Peruvian constitutional lawyer:
“The State is an autonomic political society organized for structuring the convivence, we are a group of people interrelated because of the necessity to survive and perceive common benefit. This requires a relation based on social force and a hierarchical relation between government and society.”
References:
Soto, H. . (2009). El otro sendero: Una respuesta económica a la violencia. Lima: Grupo Editorial Norma.
https://www.inei.gob.pe/media/MenuRecursivo/publicaciones_digitales/Est/Lib1589/libro.pdf
https://www.ipe.org.pe/portal/el-arsenal-economico-ante-la-crisis-alianza-del-pacifico/
The Universal Declaration of Human Rights (1948)
García, T. V. O. (2014). Teoría del estado y derecho constitucional .
Political Constitution of Peru (1993)
Edited by Hiba Arrame
Legal Measures to Prevent COVID-19: The Reality of the Crisis vs. the Mechanism of Prevention. The Moroccan Experience
The spread of the new coronavirus has destabilized the world since it first appeared in the Chinese city Wuhan in the late 2019; it was declared as a global pandemic leaving many victims behind, not to mention thousands of cases of infections around the world.
Moreover, it should be noted that the wide spread of COVID-19 has initiated a crisis with global dimensions, as its remnants have not only reflected on the human element, but have also had extended it to affect many areas, including the economical, political and legal ones.
It has shown the fragility of foreign affairs when among the first consequences of the spread of the virus was to take a defensive stance by all countries of the world through the policy of isolation and border closure because of the fear of worsening the situation and loss of control over the social stability.
Consequently, many countries have resorted to closing their borders and limiting movement within their territory. The French State has approached on March 16, 2020 that the President of the Republic issued his decision to take the necessary preventive measures to reduce interpersonal contact, thus restricting any movements unless absolutely necessary across the French territory, for up to a minimum of 15 days, and allow people to move provided that a written statement is signed to justify it.
However, as Morocco is being strongly involved in the international community, it has been affected by the prevailing situation caused by the coronavirus pandemic and has resorted with the first confirmed case to take many legal measures aimed to prevent the epidemic and to reduce the various potential damages that may result from its rapid spread.
The Kingdom of Morocco hastened to adopt several proactive preventive measures that are necessary to close the maritime, land and air borders. It also put a great emphasis on the order of quarantine, «the stay home» for people who had a direct contact to infected persons or were in risk regions. Morocco rushed to close schools and universities starting «the distance learning» along with the prohibition of mass events.
Furthermore, the Kingdom has opened a bank account called the «National Fund for the Management of the Coronavirus Pandemic» to receive donations and to support the affected groups.
Given that the study on preventive legal measures, taken in order to cope with the new coronavirus, is of global importance, a constant follow-up study on this subject is necessary to give a start to new various national legal measures that Morocco has brought into this context.
Proactive Legal Measures to prevent the Coronavirus Outbreak
The rapidly increasing spread of the coronavirus has required the Moroccan State to take several precautionary measures in order to control the epidemic and to reduce the spread. The Kingdom declared a state of health emergency on March 20, 2020 for this reason.
However, the Moroccan government did not issue the law regulating this state of emergency until 23 March, when the Decree No. 2.20.292 was issued declaring a state of health emergency throughout the national territory to cope with the outbreak of the coronavirus. The decree was published in the official newspaper on March 24, 2020.
This decree entitles the competent authorities to adopt different measures to prevent and control infectious diseases. It also included many objective provisions, namely the criminalization of certain acts that weren’t considered criminal before. Additionally it contained a set of procedural provisions, such as the suspension of legal deadlines, which are listed as follows.
1. Criminalization of certain acts as a preventive legal measure:
Referring to the Decree No.2.20.292 it is clear that the Moroccan legislator has criminalized many acts that weren’t criminal in the past, which are considered to be a violation of the state of health emergency declared in the country. For instance, the criminalization of non-compliance with the authority's orders as well as the dissemination of false news.
• Disobeying authority orders to comply with the state of health emergency
The Decree-law No. 2.20.292, issued by declaring a state of health emergency in the Kingdom of Morocco, included injunctive and deterrent requirements for anyone who violated the orders of the public authority and refused to comply with them, which is clearly seen in the Article 4, which states:
«Anyone in one of the areas where a state of health emergency has been declared must abide by the orders and decisions of the public authorities referred to in the Article 3 above.
Violation of the provisions of the previous paragraph shall be punishable by one to three months' imprisonment and a fine of 300 to 1,300 dirhams (30 to 130 dollars) or one of these penalties, without violating the most severe criminal penalty.
The same penalty shall be imposed on anyone who obstructs the implementation of the decisions of the public authorities taken in accordance with this decree by law through violence, threats, fraud or coercion or incites others to violate the resolutions mentioned in this paragraph, by means of speeches, shouting or threats made in public places or meetings, or by posters displayed in public or through various audiovisual or electronic media, and by any means others use an electronic prop for this purpose.»
As can be seen, the Article 4 is the main basis for the principle of unique punishment, as the decree expressly punishes anyone who violates the orders and decisions of the public authorities regarding the state of emergency. All this disregarding the prejudice to the most severe criminal penalty. A case of theft during this period applies to the requirements of the Criminal Code relating to the crime of theft, and not to the violation of the State of Emergency Law decree.
In fact, it may come to mind that the requirements of this decree conflicts with a set of constitutional rights stipulated in the Title II of the Moroccan Constitution, perhaps the most important of which is the right to freedom and mobility. Despite that, it becomes clear soon that the issue is an exceptional circumstance that calls for the protection of the most sacred rights which is the right to life and physical integrity, which has been denounced by various international laws and conventions.
This is in accordance with the spirit of the Moroccan Constitution, with reference to to the Chapter 21 of the Constitution we find out that it provides the right of the individual to his personal safety and relatives, and to protect his property; as stipulated in the second paragraphs that public authorities guarantee the safety of the population and the integrity of the national territory in respect of the rights and freedoms guaranteed for everyone.
Accordingly, when an individual or collective right is curtailed in order to protect the public interest, such as freedom of movement for example, what the executive power will is obliged to do is based on the principle of constitutional legitimacy.
Mohamed Lyoubi, director of the Epidemiology Department in the Ministry of Health (source)
Spreading and promoting fake news
Given the wide spread of fake news about the coronavirus since its first emergence in Morocco, and due to the psychological nature of the dissemination and promotion of fake news on the social media, especially in this exceptional situation, and because of its negative effects which are manifested in creating terror and fear, whether through the understatement of the efforts of the state and its authorities in preventing the virus, or by denying the existence of the virus and spreading fallacies about it without investigating reliable medical sources.
The Chief Prosecutor is authorized to follow up on anyone who promotes false news about the coronavirus, which has already been carried out through arresting and investigating with a group of individuals if creators were suspected of involvement in the matter, following the circulation of some videos containing false news.
Moreover, the Public Prosecutor's Office has opened 81 judicial investigations in response to false news resulting in the initiation of judicial follow-up against 58 persons while research is ongoing.
2. The suspension of legal deadlines (judicial reporting and appeals):
It should be noted at the outset that the most likely legal adaption of the coronavirus pandemic is classified as a force majeure, the latter of which the Moroccan legislator defines through Chapter 269 of the Law of Obligations and Contracts as follows:
«It is considered to be a force majeure: everything man can't expect, such as a natural phenomenon, enemy raids, and the act of power, which would make the implementation of the commitment impossible.»
Thus the previous proposal, which classifies the coronavirus as a force majeure, is reinforced by the issuance of a series of communications that announced the suspension of work within the courts of the Kingdom, perhaps the most important of which is the communication issued to suspend all hearings except those related to the decision of urgent cases and related to the judiciary of the investigation.
Therefore, the impact of the coronavirus was not only limited to the objective rules, but it has also extended to the procedural rules, where it significantly affected the normal functioning of the case, in other words it has influenced the Judicial time, especially with regard to reporting and appealing as the most important legal institutions that depend on the element of time for their validity.
A confusion about the fate of the proceedings that did not respect legal deadlines was removed due to the force majeure of the coronavirus pandemic, as the aforementioned state of emergency decree in the Article 6 referred to the suspension of all deadlines stipulated in the ongoing legislative and regulatory texts, especially deadlines associated with appeals, whether administrative or judicial, and all the deadlines associated with reporting.
Although, the deadlines are considered to be public order and can only be suspended under a law that provides for the suspension of their calculation and the declared decree of the state of health emergency is legally a position for all legal deadlines to take effect.
The Article 6 of the Decree No. 2.20.292 related to the State of Health emergency / states:
«All deadlines stipulated in the legislative and regulatory provisions in force during the declared period of health emergency shall be suspended and resumed from the day following the lifting of the state of emergency mentioned.
The first paragraph above excludes the appeal sought in cases of persons arrested, as well as the duration of the situation under theoretical guard and pretrial detention.»
The Role of the Judiciary in Preventing and Reducing the Manifestations of the Crisis
In the framework of the national mobilization to confront the coronavirus and to enshrine the principles of solidarity, the Moroccan judiciary in turn followed the same approach and played an active role in preventing and reducing the spread of the COVID-19 by initiating the suspension of hearings in various courts across the Kingdom, except for some special cases (criminal and misdemeanour cases involving persons detained in pretrial detention and held in prison institutions, and cases of investigation and juveniles…)
However, it should also be noted that several memos have been issued aimed at preventing the spread of the COVID-19 by reducing the number of frequent offenders and avoiding bringing detainees to the courtroom as well as delaying the criminal files until the end of the quarantine, in order to avoid the potential risks that may affect the judicial assistants and Justice-fairers.
In the same vein, Mr. Mustafa Fares, Managing Director of the Supreme Council of the Judiciary and the First President of the Court of Cassation, submitted a communiqué announcing the solidarity of the various members of the judiciary by donating a half of the monthly salary to the National Fund for the Management of the Coronavirus Pandemic.
It should also be noted that the role played by the Public Prosecutor's Office, which has turned to the adoption of digitization in constantly receiving and handling complaints by fax and e-mail.
In the same context, the office of the Public Prosecutor announced that in the framework of activating the injunction sought by the Decree No.2.20.292 on the enactment of provisions for the state of health emergency the public prosecutions have followed since the decree entered into force on March 24, 2020, a total of 4,835 people violated the state of health emergency, of whom 334 were referred in custody to the court.
The Public Prosecutor's office has followed up 263 people, including 43 people of whom are in custody for violating certain criminal law requirements, since the public authorities declared the quarantine on March 20 and March 23, bringing the total number of followers in this context to 5,098.
In this regard, the Moroccan judiciary has been quick to issue eloquent orders and rulings adopting the preventive measures imposed by the phase, perhaps the most important of which was the ruling of the Administrative Court of Rabat in order 955 of 31/03/2020, which ruled against a Moroccan citizen and his wife requested to enter Morocco from Spain via the Mediterranean port of Tangier by their car, after which they remained stranded on Algeciras after the declaration of the state of health emergency.
They were drawn by defending the Article 24 of the Constitution which guarantees freedom of movement through the national territory.
While the injunction was based on a decree on the enactment of provisions for the state of health emergency and the procedures for declaring it, which aims to reduce the spread of the virus and prevent it. To clarify, the main purpose on which the previous injunction was based is to avoid a potential infection with COVID-19 that may be caused by the spouses if they were only allowed to enter the Moroccan territory.
Given the above, it can be summarized that the efforts made by Morocco have indeed managed to control the rapid spread of the virus, but the question is: will the Moroccan State manage to keep the current stability by controlling the situation as demonstrated in the near future?
Edited by Nataliya Napetova