Part 2 Chile’s Response to the Covid-19 Pandemic

Part 2: Chile’s Response to the Covid-19 Pandemic

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Part 2: Chile’s Response to the Covid-19 Pandemic

Introduction

The COVID-19 pandemic is global and has largely affected Chile. As of 26th March 2020, the confirmed cases in Chile had hit 1300 (Kanter & Boza, 2020). With exports of both agriculture and mined products being the primary economic sustenance in Chile, both international and local businesses have gone down following the pandemic. The major countries of exports are the United States, Japan, and China, which have cut off from Chile since the rise in cases. Similarly, several countries avoid imports and exports unless necessary as a measure of containing the COVID-19 pandemic. The significant policies Chile has put in place to contain the pandemic and ensure sustenance are the policies that affect livelihoods, health-related policies, and the financial policies drafted. Among the financial policies are tax measures and policies on Chilean VAT. The livelihood policies include lockdown in hotspot areas, closure of schools, curfews, quarantine, and specified open hours for specific business enterprises. The health-related policies include the use of gloves, social distancing, sanitization, provision of required medical equipment, and better-equipped facilities.

Implemented Policies

The financial policies put in place are majorly tax measures. Chile Governments has opted to extend the period required to pay tax without penalties or fines (Israel, Foppiano, & Back, 2020). Similarly, the government has suspended the provisional monthly payments (PPMs) for all enterprises, small or big, for three months. It is aimed at ensuring the funds are channelled to more pressing matters. Additionally, deadline extensions have been made by the Chilean International Revenue Service (IRS) with an allowance of online filling to ensure all get a chance to file returns (Israel, Foppiano, & Back, 2020). Chilean government also declared COVID-19 related expenses incurred by companies would be deductible. SMEs with sales of approximately $12 million and below are allowed to defer payment of VAT debit for three months as from April, and the debt is payable in 6 or 12 instalments. The stamp tax was equally reduced to 0% (Israel, Foppiano, & Back, 2020). Inputting the policies in place, the financial state of citizens and business owners is made sustainable despite the economic impact COVID-19 has on Chile.

To contain the fast spread of COVID-19, Chile has opted for several policies that affect the livelihood of the citizens. The livelihood policies implements are; complete lockdown in hotspot areas such as Santiago, closure of schools, curfews, quarantine, and specified open hours for specific business enterprises (Kanter & Boza, 2020). The measures can be termed as effective apart from cases where there are defaulters (Bennett, 2020). In taking these measures, the government aims at containing COVID-19 by limiting asymptomatic transmission that is a significant issue for all countries facing the COVID-19 pandemic.

Health-related policies have also been put in place by the Chilean Government as a measure in the fight against COVID-19. Such policies are inclusive of the use of gloves, social distancing, sanitization, provision of required medical equipment, and better-equipped facilities. The policies were initially made by the World Health Organization (WHO) as a measure to contain the spread of the virus (Ghosh et al., 2020). Just like any other country facing the pandemic, Chile adopted the policies and implemented them. The policies have helped contain the spread in a number of locations since the Chile Government implemented them.

Implications

The implications of the policies for domestic businesses are low financial income for all enterprises and a drastic change in livelihood. For instance, areas with lower income or small areas of the country, such as inferior parts of Santiago are cut off and lack the ability for sustenance. Similarly, the economy which entirely depends on its exports to more developed countries is at risk due to limited flights and need for supplies. Both international and local enterprises have low income which affects the economic balance of the country. Agriculture being a second significant economic-based activity in Chile after mining; it has been affected at large (Kanter & Boza, 2020). The table below shows the effects and consequences of the policies as a result of the pandemic.

-349117-5242The implications to foreign businesses include reduced or cut imports and exports to and from Chile as well as a distorted chain of the economy. Just like Chile, its major export countries such as Japan, U.S., and China have had significant cases and attempt to contain the pandemic with close to or similar policies. The policies have thus disrupted the import and export chain by lowering demand and limiting exports and imports to basics or essentials. Also, the policies have resulted in the closure of some business enterprises due to lack of supply or lockdowns and curfews that affect the businesses.

Conclusion

The policies that affect livelihoods, health-related policies, and the financial policies drafted by the Chilean Government were implemented as a response during the COVID-19 pandemic. From the discussion, it is evident that the epidemic has resulted in the disruption of the economic curve for both domestic and foreign businesses. Chile being a developing country, it had most of its economic income from exports to well-developed countries. However, the same has been tampered with be pandemic as well as the policies against it. The policies can be termed as the best possible strategies. However, the lack of know-how in the possibility of a permanent solution poses a threat to the economic capability of Chile to sustain its population.

References

Bennett, M. (2020). All Things Equal? Heterogeneity in Policy Effectiveness against COVID-19 Spread in Chile⋆.Ghosh, A., Mukherjee, K., Dasgupta Ghosh, B., & Dutta, S. (2020). COVID-19 Outbreak–The Role of Worldwide Interventions As a Preventive Measure to Fight the Pandemic. Available at SSRN 3599808.Israel, J., Foppiano, N., & Back, S. B. (2020). Chile takes decisive steps to mitigate thefinancial impact of COVID-19. International Tax Review.Kanter, R., & Boza, S. (2020). Strengthening Local Food Systems in Times of Concomitant Global Crises: Reflections from Chile.