Just as Virus Deaths Soar, Brazilians Emerge From Quarantine
Brazilians are resuming a measure of normal life just as Covid-19 deaths are spiking to hundreds per day, turning their country into a global hotspot.
States like Santa Catarina and Mato Grosso do Sul have dialed back restrictions on malls, gyms and churches. Fashion retailers Cia Hering and Lojas Renner are among those that have started to reopen stores. Demand is up at gas stations across the country. Even residents of Sao Paulo, where restrictions remain in place, are getting out more, according to government tracking data. A poll shows support for isolation measures is fading.
On Tuesday, Brazil reported its highest number of deaths since the pandemic hit the country in late February. The 474 fatalities in 24 hours lagged only the U.S. and U.K. On Wednesday, another 449 people passed away, and 435 more died on Thursday. Confirmed cases have jumped to 85,380 in the last week, and experts say insufficient testing is hiding what are probably much higher numbers.
“It looks like the curve is still steepening, and unfortunately we’re already seeing some regions ease isolation,” said Solange Srour, the chief economist at ARX Investimentos. “There’s a lot of pressure.”
While Brazil is hardly alone in seeking to balance its worst health and economic crises in decades, it seems to be facing greater chaos. With about 25% of the population in poverty, many can’t afford not to work and live in cramped quarters that make social distancing nearly impossible. The government doesn’t provide enough aid to the poor or to companies and was struggling with an unemployment rate of 12% even before the crisis. There are also little to no enforcement mechanisms or penalties to dissuade people from leaving their homes or opening their businesses.
The heated political climate isn’t helping. President Jair Bolsonaro infamously belittled the significance of coronavirus for weeks, battling states that imposed restrictions. He fired his health minister partly over the issue.
And he still dismisses the pandemic, confronting governors, political foes and even some of his own allies, saying on more than one occasion, “What can you do?” when asked about the deaths. On Wednesday, he said questions about coronavirus deaths surpassing China’s should be directed at governors and mayors, “the ones who took all the restrictive measures.” This week, Bolsonaro signed a decree expanding the list of so-called essential services, which would allow more people to get back to work.
His new health minister, Nelson Teich, told senators at a Wednesday briefing: “You ask me when will we peak. I don’t know, and no one does. We can project dates, but they’re just assumptions. Each location will have a different curve.”
On Thursday Rio de Janeiro, the second hardest-hit state, extended a quarantine until May 11. The state’s health secretary said Rio’s curve for new cases is “out of control” and added that authorities could declare a full lockdown if people don’t respect social isolation recommendations, local media reported.
All 27 states shut shops and schools. Other restrictions varied but there were no strict lockdowns. Restaurants have been open for take-away and delivery.
In Sao Paulo, the country’s virus epicenter where a quarantine remains in effect until May 11, officials have noticed through tracking mobile phones that people have stopped keeping appropriate distance from one another. The so-called social isolation rate has fallen under 50% in recent days, below the 70% level authorities believe is needed to halt the spread of the disease. If the trend continues, officials say, hospitals won’t be able to cope and the quarantine will be extended.
Public health centers in Amazonas, Ceara, Rio de Janeiro and Para states are already reaching capacity and struggling to source sufficient medical equipment.
The impact of all this on an economy that was just getting back on track will be calamitous, according to Gilmar Alves Lima, an economist at lender BMG.
Since the arrival of the pandemic, airports saw a 90% drop in flights, and all of the country’s 577 malls initially closed. Forecasts show GDP contracting as much as 7% this year, with unemployment potentially doubling. A poll by national industry federation CNI in late March showed 79% of companies saw a drop in demand, with over half of the 700 firms surveyed saying the decline was “severe.” About 80% reduced or halted production to cope with the crisis. Confidence plunged a record 26 points to the lowest since 2010.
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“We’ll have to adapt to this new reality, but companies have to come back,” said Glauco Humai, the president of mall association Abrasce. “You can’t just stay closed for three or four months.”
Now, about 10% of Brazil’s malls have reopened in the past couple of weeks. Though Humai said protocols specify the use of masks, taking temperatures and controlling the flow of people, local media reported health authorities are probing a mall in the southern city of Blumenau after local media showed crowds packing in for the reopening.
Retailers and factories that have reopened said in filings they are following local regulations and taking measures to ensure the safety and health of employees and clients.
There’s no consensus on how to return to business -- and no national guidelines. Teich said the government is discussing criteria to suggest easing the quarantine at the right time, which would only happen when the curve starts to flatten. ARX’s Srour says coordination between local and federal governments is key to avoid new quarantines. BMG’s Lima says that since conditions vary so much, each state should decide on its own.
Both economists agree mass testing should be part of the plans. Brazil has boosted testing capacity, but is still far from having a good grasp on how many of its residents have been infected or cured.
©2020 Bloomberg L.P.