By Inaê Riveras
Jairo Zanella Gutierres calls himself a “prudent” man.
The owner of a stationery store in the city of Amparo, Brazil, Gutierres expanded his shop over the last three decades by offering high-quality products and personalized customer service. He believes his cautious approach to management—always saving for hard times—has been crucial to helping his business survive innumerous macroeconomic crises. Whether this will be enough to pull through a global pandemic remains to be seen.
The store has been shut for about two months to comply with a São Paulo state order aimed at containing the advance of the deadly COVID-19. No customers means no revenue. Gutierres is also dealing with the pandemic on a personal level: His brother was infected and is now recovering after having spent weeks in a hospital intensive-care unit.
“The situation is horrible,” Gutierres told me on a recent call. He said the survival of his business, which employs four people, would depend on him being able to get credit at subsidized rates. “Just like my brother needed a respirator, my store needs a respirator to breathe—and it needs it right now. But there’s nothing available, nor the prospect of having anything available.”
Gutierres is a friend and neighbor of my parents, who are in their 80s and have spent the last nine weeks confined in an apartment in Amparo, almost 5,000 miles away from where I live, in Washington, D.C.
“We never thought that, in our lifetime, we’d need to go through something like this,” my mom, Heidi Riveras, told me on one of our calls.
When I wake up in the middle of the night, I think of them and all of Amparo’s residents—and that’s why I picked up the phone to find out how the pandemic is reshaping lives there.
A Bustling City, Now Silenced
Amparo, a city of 70,000, two hours away from São Paulo, has grown a lot since my family used to spend our vacations there, in the 1980s. Buildings and roads have overtaken the lush green mountains. Many 19th-Century historic buildings, reminiscent of a time when the region accounted for much of the coffee consumed worldwide, are gone. But the old train station remains in one of the city’s main squares—an area now transformed into a bustling commercial district.
Nothing is bustling now, people told me in phone call after phone call. Even though the Amparo area had fewer than 20 confirmed cases by May 9, many think an explosion in this number is just a question of time because the cases are multiplying quickly in the state of São Paulo. (As of May 10, there were more than 44,000 confirmed cases statewide, with 3,600 deaths.) The situation is especially worrisome because the health-care infrastructure is limited in the areas far from the city of São Paulo—and is even worse for those who depend on the underfunded public health system. But when people stay home, incomes fall and unemployment rises.
“In general, we can say that the impact of the coronavirus will be profound,” said Mario Auler, the Municipal Secretary for Economic Development in Amparo, noting that 450 people filed for unemployment claims in April, a 50 percent increase from March. The increase reached nearly 70 percent when the April number is compared with the February figure.
“It’s especially tough if you consider that Brazil has been in recession since 2015,” said Auler, adding that the federal and state governments have announced assistance programs for small enterprises, but the high level of collateral required renders support out of reach for many business owners.
The old railway station in Amparo’s downtown remains, despite much rebuilding nearby. Photo: Inaê Riveras
At the same time, access to cheaper credit is limited at the state-run bank, which is now struggling to distribute an emergency fund to informal workers, who make up more than 40 percent of the workforce in Brazil. In the entire country, more than 50 million people have applied to receive the benefit of 600 Brazilian reais (about $100) a month for three months.
As I researched the figures Auler mentioned, I started to understand that the economic impact on the city’s finances will be minimized by surging sales in a few sectors dominated by big players. (The largest sole payer of taxes to the city is a maker of cleaning products, for which demand is rising substantially.) The social toll of the pandemic, though, will be considerable, said Auler, considering the vast number of informal workers and the role that micro and small businesses play creating jobs.
The situation is also uncertain for the region’s smallholder farmers, who supply produce to local restaurants and schools. Buyers have disappeared, said Marcelo Toledo, President of the Rural Association of Amparo.
The Present—and Future—is Digital
On Amparo’s main shopping street, every day there’s a new “Passo o ponto” sign going up on a shop door, indicating that the business is for sale, Fernanda Barbosa told me a few days ago. She’s a family friend who works as the sales manager at BA Barbosa Supermercado Limitada, a regional chain with five stores. It’s one of the rare companies doing well. Barbosa said the group’s sales are rising as more people buy food and cleaning products.
Inside the Guarani supermarket, the use of face masks is mandatory for staff and customers. Photo: Fernanda Barbosa
That doesn’t mean things have been easy, though. Barbosa said the company had to reorganize quickly to adapt to the new reality. In the flagship 5,000-square-meter supermarket, only 100 people are allowed in at the same time. Face masks are mandatory, and hand sanitizer is offered at the entrance. Adjacent restaurants and snack bars have been temporarily shut down.
Barbosa explained to me that the most remarkable shift has been behavioral. Online ordering has skyrocketed. The store now receives up to 200 orders a day through its website, by email, phone, WhatsApp, and even hand-written notes.
“Many customers are enjoying home delivery and getting used to it. We think this is a trend that will continue, even after the pandemic,” Barbosa said. The company, too, is doing more of its wholesale purchases online.
The group is also planning to make changes to its restaurant when it reopens. “People used to come here not only to eat, but to get together, talk, and we think this will change, too,” said Barbosa—a remark that points to the profound cultural changes ahead and will likely upset many in town, including my parents.
Inaê Riveras, who is from Brazil, is an IFC communications officer currently on assignment at the World Bank.
Published in May 2020