With more than 250 lawyers, Estudio Muñiz is the biggest law firm in Peru. Mauricio Olaya, principal partner and head of the corporate department, shares his views about the Covid-19 impact in Peru and how the government reacted.
Leaders League: How well do you think your government is reacting to the Covid-19 virus?
Mauricio Olaya:I think that the government is managing the crisis in an exemplary manner, largely exceeding our expectations.
Which are the main measures the government has implemented to help entrepreneurs?
The initial measures have been mostly focused on small and medium-sized formal enterprises, and I would say that more emphasis is being placed on the latter. The subsidy granted to workers earning up to 1,500 soles, the possibility of withdrawing a percentage of the severance pay deposit, and the non-payment of the monthly installment payable to Pension Fund Administrators are some of the main measures. To this we add the fact that the filing of the annual income tax return has been deferred (although much of the tax may have already been paid as advance payments during 2019), and some other measures aimed at making the fulfillment or non-fulfillment of formal tax, labor and other obligations more flexible.
And to assist the more vulnerable members of the population?
It is here where the main measures taken by the government have focused, as the government has distributed S/ 380.00 to each family living in extreme poverty, although the difficulty is that it does not have an accurate census count of the population.
In addition, the government has given access to a specific amount or percentage of the funds that people keep in their personal pension accounts.
We could still face a larger problem if a substantial number of jobs are lost as a result of the crisis.
Which industries or sectors are suffering the most?
There is no doubt that this crisis is affecting practically all sectors of the economy and I agree with the information that is circulating in relation to this topic, not only in Peru, but all over the world. Less than 15% of companies are suffering low impact in this crisis.
And which ones do you think have been handed an opportunity by the current situation?
As expected, those companies, investment funds, economic groups or people which have high levels of liquidity will not only have the capacity to properly cope with the crisis, but will be in a position to take advantage of the extraordinary opportunities that the crisis affords in terms of company or asset acquisition, specifically, those businesses which could have sound performance in the medium term, but which face liquidity problems in the short term.
In a few words, what has this sui generis crisis taught you?
If the risk management committee, strategic planning committee or similar committee of a company (particularly companies belonging to one of the most severely impacted sectors) ever considered a crisis like this one among its possible scenarios, then we should build it a monument.