Clearly global experience shows that it is best to ensure the withdrawal of workers is that it rests on a private pension system. One could ask: not have failed perhaps regulations imposed by the Government? Have do not you given the instability of the country, the mortal blow to private retirement and pension system? Therefore, I think that not worth discussing if the Argentine private pension system turned out to be ineffective or not, but making progress in the analysis and try to investigate a little further about the real reasons why the Government is interested in reestatizar to the pension system. On this, I think that there is almost unanimous agreement that behind the Government's decision there is a need and an interest in the box generated by the system. The AFJP receive an annual flow of $15 billion (about US $4,600 million), which would be useful for the Government in a 2009 in where markets will be closed for finance to the Argentina. But the fears generated by this decision go beyond and there are those who think from the opposition that parts of these funds could be used to increase public spending in an election year. Thus, can condemn the squandering of funds raised by the system failure in a short time. The truth is that beyond everything, there is no guarantee that the Argentine Government can improve the efficiency of the retirement system. Worse, for the attentive decision against the development of the local capital market.
This is because, although the contribution of the AFJP in the local stock market was not be too relevant, generated an increased flow of funds and an increased liquidity in the market. With the improvement in the economic situation of the country, which could translate into an improvement in the qualification of listed companies, the AFJP could have contributed an increased flow of funds to finance the business sector through the capital market. AND not only the decision would hit the stock market, but also the banking sector would be affected by the departure of deposits owned by the AFJP. The AFJP have placed 7.47% of its portfolio in fixed term deposits, amounting to $7,054 million. If I have to give an opinion on the decision to fully nationalize the pension system and Argentine pension, I would say that here might be sowing are the cause for a future crisis of the ec economy.
Most likely is that the poor management of the new system, resulting in a systematic deficit and in growth that any negative shock that may suffer the economy, can it transform into something untenable. Finally, I must say that clearly isn't a good decision which just take the Argentine Government at a time in which must exit to curb layoffs at companies, as it was the case with Easy, to the deterioration of the economy. The country needs, in addition to restore confidence in its economy, a greater volume of productive investment to grow, but the constant message of the Government discouraged both local and foreign entrepreneurs embark on the adventure of betting on the country.
This is because, although the contribution of the AFJP in the local stock market was not be too relevant, generated an increased flow of funds and an increased liquidity in the market. With the improvement in the economic situation of the country, which could translate into an improvement in the qualification of listed companies, the AFJP could have contributed an increased flow of funds to finance the business sector through the capital market. AND not only the decision would hit the stock market, but also the banking sector would be affected by the departure of deposits owned by the AFJP. The AFJP have placed 7.47% of its portfolio in fixed term deposits, amounting to $7,054 million. If I have to give an opinion on the decision to fully nationalize the pension system and Argentine pension, I would say that here might be sowing are the cause for a future crisis of the ec economy.
Most likely is that the poor management of the new system, resulting in a systematic deficit and in growth that any negative shock that may suffer the economy, can it transform into something untenable. Finally, I must say that clearly isn't a good decision which just take the Argentine Government at a time in which must exit to curb layoffs at companies, as it was the case with Easy, to the deterioration of the economy. The country needs, in addition to restore confidence in its economy, a greater volume of productive investment to grow, but the constant message of the Government discouraged both local and foreign entrepreneurs embark on the adventure of betting on the country.
