Government dictates sanitary restrictions without knowing impact on economy

(CRHoy.com) .- The Government dictates sanitary restrictions due to COVID-19 without knowing what impact they will have on the economy.

It was until June 15 months after the start of the pandemic, that the ministers and the president, Carlos Alvarado, addressed the issue of the need to have statistical models that help to measure which restrictions have had the most and the least influence on the economy.

This was established during a discussion held by the Governing Council on the situation of the Costa Rican economy, on the 1st. of June.

During that session, the executive president of the Central Bank of Costa Rica (BCCR), Rodrigo Cubero, made a presentation on the state of the economy.

In this context, the Minister of Health, Daniel Salas, raised the doubt on the possibility that the Government has a regressive statistical model that allows understanding how much a certain restrictive measure affects the economy to prevent further contagion of the coronavirus.

Before consulting Chambers, the BCCR hierarch commented that, indeed, it would be “very important” to have well-disaggregated and calibrated knowledge of what are the restriction measures that impact economic activity in relation to the contagion rate. However, there is still no light on whether such a study is feasible.

“I would not know if there is a statistical possibility of reaching the analysis requested by Dr. Salas through regression”, Cubero concluded, according to the minutes of the session of the Governing Council.

Last week the Ministry of Health was asked for the possible results of a study with this approach.

However, on Thursday, July 22, Minister Salas limited himself to answering that he raised the issue of quantifying the impact of the restriction measures just as a suggestion to the government’s economic team.

MEIC collects information on the impact on employment

The same minutes include an intervention by the Minister of Economy, Industry and Commerce (MEIC), Victoria Hernández, in which she commented to the rest of the Cabinet that her Ministry has been working on quantifying the impact of the closures due to the pandemic on employment, to determine how many jobs have been lost.

CRHoy.com requested the MEIC for the preliminary results of that investigation. However, until this Friday, July 23, a response to the query had not been obtained.

Faced with the discussion about the impact of the restriction measures on the economy, the executive president of the BCCR recommended to the Minister of Finance, Elian Villegas, that work on a rough gauge, or a sequence of time.

The The intention would be to cross the sanitary measures that have been applied during the pandemic and the collection of the value added tax (VAT) that has been achieved during the same period. This tax is charged on the sale of goods and services.

The most harmed

Among the sectors that claim to have resented the restrictive measures ordered by the Alvarado government, the most prominent are the tourist and restaurant, commercial and transport.

In 2019, foreign exchange income thanks to tourism activity reached almost $ 4 billion. However, in 2020, as a result of the closure of borders, beaches and other restrictions, the amount barely reached the $ 1,343 million.

Regarding trade, more than 137 thousand people they have been hurt by closures and restrictions; and in the case of bars and restaurants, only during the first weeks of the pandemic, the closure of 8 thousand businesses, with the consequent dismissal of 109 thousand people.

Restaurant sales, according to the Costa Rican Chamber of Restaurants and Bars (Cacore), fell by up to 90% when the pandemic started.

Although restriction measures, such as vehicles, still persist, the economy has barely shown timid signs of recovery.

The defender of the Inhabitants, Catalina Crespo, asked the Government, at the beginning of June, to The rules used to decide the vehicle restriction will be detailed..

And on July 18, the hierarch asked the Ministry of Health to completely eliminate the vehicle restriction.

The Government announced that the measure will be maintained at least until next August 8. The threat of the expansion of the Delta variant of COVID-19 suggests that the measures could be strengthened.

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