Jaramillo, M. y Escobar, B. (2021). Reactivando para un mejor país después de la pandemia de COVID-19: una propuesta de diagnóstico y acción para el Perú. Lima: GRADE. Documentos de Investigación, 122.

In this document, we present an economic analysis of Peru before and after the pandemic, along with a five-year financially sustainable recovery plan aimed at “reviving for a better country”. Our plan emphasizes the urgent need to address some of the country’s structural weaknesses. We stress the importance of public investment in this effort, but we also broaden the focus to include current public spending, in order to take steps in the direction of building a more universal social protection system. We demonstrate that this also contributes to reducing the gender imbalances in the labor market that were exposed and exacerbated during the pandemic. We provide a financial programming exercise that shows that the plan is financially responsible under a reasonable fiscal rule. Four messages stand out from our analysis. First, while public investment may be key to reviving economic growth, it does not go far in addressing the country’s structural weaknesses. Second, public spending on health can achieve this on two fronts: starting to build a universally accessible social protection system and addressing gender imbalances in the labor market. Third, focusing the public debate on social protection allows us to take a broader approach to policy reform by including formal employment and productivity-enhancing reforms, which are essential to make a comprehensive social protection system sustainable. Finally, we also show that the mix of sectors in public investment matters for employment outcomes, both in terms of the volume of jobs generated and their gender composition.