One factor that really exacerbated the pandemic here was Peru’s high rate of economic informality. 72% of the workforce is informal and during the pandemic most of these people had to leave their houses every day to earn the money they need to survive. That undermined the efficacy of the lockdown. The Peruvian government actually put together one of Latin America’s most comprehensive economic and social support packages, with around $255 for each of the poorest 3 million Peruvians. But it was difficult to distribute because most of the recipients didn’t have bank accounts. Instead, people had to queue at banks, which is exactly what you want to avoid during a pandemic. When the pandemic first hit, our primary goal was to ensure the safety of our staff. Since the 16th of March EY Peru has had 99% of our employees working from home. We are well positioned because all of our workers have a laptop and good internet connection, which isn’t the case for most Peruvian companies. By eight months after the lockdown began, we had managed to get about 15% of them back to the office. They must have a medical certificate and also a signed affidavit from our internal medic, so it’s a lot of extra expense and paperwork for us, but we do it because some of our staff work better from the office and want to return.
We are accelerating our digital skills, for example, we now offer a free online MBA to all of our 1,800. employees. That is an initiative that comes from EY’s global headquarters. Here in Peru we are also integrating more with regional EY partners, for example we have been working with EY in the US. We are keeping our focus on data analytics and big data but our improved capability means we can do more of it ourselves in Peru. This is especially important now that audit procedures will be more based on analytics. We need to reimagine the audit as we can’t physically visit clients’ offices. For example, the International Accounting Standards Board has accepted that a continuous video recording, tagged with the GPS, especially for inventories, will be accepted for audits. That shows how we can use technology to find a way around the current challenging situation. Informality is one of Peru’s weak points and means the formal private sector is smaller than it should be. But one advantage is that years of economic growth have attracted the best international companies, while raising local standards, so the formal firms that do exist are serious players. During the pandemic we saw the advantages of having good local and foreign companies. In the worst moments of the crisis, the private sector responded with oxygen and emergency medical supplies. Positive point within this entire crisis is that the country, from the public to the private sector, and even the population have been driven to make a digital leap, which I am sure would not have been achieved in any other circumstance and allows for greater opportunities. Of course, after such an economic hit, there will be growth as the economy reopens, and Peru is expected to have the highest growth in the region in 2021, but that is just a mathematical reaction to such a big fall. Until there is a vaccine, things will remain difficult.