Our new research into the effects of lockdown in El Salvador shows that those with the lowest incomes and the worst health have been hit hardest. While many skipped meals and quit work, others even ended treatment for chronic illnesses or took out loans from predatory lenders. These adaptations only make the situation worse, and the state must try to address the conditions that drive them if the country returns to containment, write Mylène Lagarde (LSE Health Policy), Manuel Sánchez Masferrer (ESEN, Salvador), and Carlos Riumallo Herl (Erasmus University Rotterdam).
During the COVID-19 pandemic, the economic damage created by strict health responses has often been presented as the price to pay to reduce the spread of the virus and prevent the collapse of health systems. In many high-income countries extraordinary measures have been introduced to protect jobs and livelihoods. But what happens when hard closures are introduced in contexts where the welfare state cannot absorb economic shocks and where marginalized populations are already suffering from poor health?
This is the question that we sought to study by carrying out a telephone survey of more than 1,600 clients of a microfinance organization in San Salvador, the capital of El Salvador. Our results reveal that the strict confinement implemented in this country had a very high economic impact among informal workers and that this impact was hardly mitigated by government support measures. We also show that the crisis is likely to have lasting effects, especially on the health of the most vulnerable groups.
Understanding the impact of COVID-19 measures in El Salvador
On March 21, 2020, a few days after the detection of the first official case of COVID-19 in the country, President Nayib Bukele established one of the strictest lockdowns in the world. Public transport, schools and all stores have been closed except for some essential grocery stores. Apart from those recognized as “essential workers”, everyone had to stay at home except to do their shopping at the nearest supermarket or grocery store. The army has been deployed at checkpoints and empowered to place offenders in detention centers.
Initially introduced for 30 days, these measures remained in place for almost three months. It was June 16 before some economic activities were given the green light again, but many stores remained closed until the end of August, when the number of daily cases had dropped significantly.
In an attempt to mitigate the economic shock of containment, the government introduced a series of accompanying measures. A cash transfer of USD 300, primarily intended for informal sector workers, has been introduced; payments on utility bills and loan installments were frozen for three months; and 2.7 million food baskets have been distributed to needy households.
Between June 10 and July 14, we interviewed 1,661 microfinance beneficiaries for whom we already had baseline data before the pandemic. Most are independent women (84%) who run small, informal businesses (median daily sales of $ 35 before COVID) in San Salvador or Soyapango, the two largest and most densely populated municipalities in the country. The interviews included questions on the economic impact of the pandemic, access to care and treatment since the start of containment, knowledge of COVID-19 and attitudes towards policies put in place during the crisis.
The devastating impact of containment on livelihoods in El Salvador
Just over 80% of those surveyed said they had to shut down their economic activity during the full lockdown (as shown in the graph below). This proportion, which is roughly the same for all income levels in the sample, is twice as high as in national level estimates, suggesting that informal workers have been particularly affected.
Even after the restrictions eased on June 16, 58% of those polled still reported no economic activity for the previous week. Overall, 65% of individuals said their income was at least 80% lower than before the pandemic. Even those who were able to work during the lockdown reported incomes on average 43% lower than under normal conditions.
Despite these dramatic drops in income, only 42 percent of those surveyed received the $ 300 cash transfer. Of those at the bottom of the scale, reporting income below $ 100 before the pandemic, only 48% had received this grant. A slightly higher proportion of households received food packages, but again, a large proportion of households did not.
Because this government support proved insufficient for many, households resorted to various coping strategies that could contribute to other potentially long-term problems. About a quarter of people said they skipped a meal at least one day in the past week, and nearly 60% of them skipped a meal everyday last week.
Beyond this food insecurity, 10% of individuals had to sell some good. Although 60 percent of those surveyed said they were unable to repay their current loan, 30 percent said they would need to take out a new one. Worse yet, about 1 in 4 of these new loans came from predatory lenders who charge high interest rates, exposing borrowers to serious, longer-term consequences.
The increased health risks of confinement in El Salvador
The consequences of confinement were not limited to the economic sphere either. About half of those polled said lockdown restrictions meant they did not have access to health services when they needed them.
Worryingly, people with serious chronic conditions (hypertension, high cholesterol, diabetes, obesity, and heart, liver or kidney disease) were at a higher risk of forgoing health care: 59% did not seek to seek treatment if needed during lockdown, as compared to 42 percent of those who were not diagnosed with chronic disease (as pictured below). In addition, 19% of those polled with chronic illnesses stopped ongoing treatment during the lockdown, compared with just 10% of those without a diagnosed illness. Respondents with chronic illnesses over the age of 60 were particularly likely to have discontinued treatment, even though they were most at risk of serious health consequences.
Support for government response
When the Salvadoran government first introduced its draconian measures, some hailed its response as an example to emulate. And with fewer than 800 official deaths from COVID-19 in September, El Salvador indeed has one of the lowest Death rates from COVID-19 in Latin America.
Although many have suggested that the trade-offs between public health measures and economics (and civil liberties) would prove unacceptable to most citizens, especially in the absence of a strong welfare state, we found that many respondents were prepared to accept the significant economic cost of combating the pandemic at the height of the crisis.
More than 90% of people said they were in favor of partial blocks that retained certain exit permissions, while 85% supported even the most stringent version initially introduced. Among this group of small business owners, the least popular measures were closing markets (40%) and public transportation (62%).
While this overall level of support may seem surprising given the economic and health costs involved, it is consistent with the opinion of 67% of our sample that the epidemic would cause more damage than the economic consequences of a halt. the economy. These results also echo those of a recent national survey, which showed that a high level of approval persisted for President Bukele’s handling of the crisis (8.67 out of 10).
What’s the next step for El Salvador’s COVID response?
As the road to full economic recovery will be long, with further epidemic waves likely, El Salvador’s continued response to the pandemic should consider measures that better cope with its direct and indirect consequences.
First, the government should seek to improve the targeting of social protection measures in order to maximize the benefits of the scarce resources at its disposal and to protect those who need them most. It is essential to take into account that those most affected in the short term are also likely to face the lasting consequences of natural coping strategies. Selling assets or taking out loans with high interest rates, for example, could easily leave these people at risk of falling into the poverty trap.
Second, future policies should recognize and address the indirect health consequences of the epidemic. From reduced access to care to interrupted treatment, we’ve found evidence that people with chronic illnesses are more likely to have been hit hard by the lockdown. In the future, communication and awareness-raising strategies could be deployed to prioritize these populations at risk. This is particularly important in El Salvador, where many suffer from “silent” cardiovascular disease and may not realize the risks of forgoing care or discontinuing treatment.
• The opinions expressed here are those of the authors rather than those of the Center or LSE
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