What is worse than putting a fox in a henhouse? That's what millions of Argentines are asking these days. And the question is not random, especially after its president, Cristina Kirchner has decided to send a bill proposing the nationalization of the pension system, the Pension Funds. No doubt a controversial measure that goes against the American tendency to hand over private management of these funds, an idea born in the Chilean military dictatorship.
The Argentine pension system is in trouble, there's no doubt. It is estimated that the loss of savings the system would reach 50%, mainly due to fluctuations that have occurred in the markets in times of crisis. Given this scenario, Argentina creativity knows no bad times and the order of a federal judge has stopped savers withdrawing their funds, ie money.
In addition, Mrs. K, as Chavez in their approach and as capitalist in your shopping list, has decided to solve its cash shortage with a booty that is clearly attractive: pension funds. It is not illogical to think that a fund of such proportions to give you more liquidity to the government, and last, we can handle a bulging current account. Better or for worse, not all Argentines are going to retire today, so that several million dollars available. The concern is that there are a number of questions that arise from the measure, and have not been completely resolved by the Government. First, it is not clear the criteria by which the Government intends to manage that money, do not know whether to make it profitable, keep it fixed or other funds. We do not know what will be the amount which will ensure the state nor the mechanism of contribution. Moreover, there is no clarity of the system to take to seize the funds. It could be an expropriation AFJP, a compulsory purchase or another alternative.
If we are dealing with a country which has not been achieved due to retire even the first generation of people under this system, we can try to evaluate it badly seriously. In addition, those who suffered the change of regime and suffered the first loss for it, and with this, assume a new one without guarantee anything in return. In my opinion, this measure is due solely and exclusively, to a whimsical populist maneuver worthy of financial and political mess that reigns beyond the Andes. It remains surprising that a country with more resources in the region have very high levels of poverty and corruption, where its citizens do not trust in the destination state to give their money and have never raised their retirement based on their life savings. Argentina is not an example to follow, at least in this area, but no shortage of nostalgic voices that want to return to the model where the state claimed all, taking himself out of business and away from the desired sustainability.
The Argentine pension system is in trouble, there's no doubt. It is estimated that the loss of savings the system would reach 50%, mainly due to fluctuations that have occurred in the markets in times of crisis. Given this scenario, Argentina creativity knows no bad times and the order of a federal judge has stopped savers withdrawing their funds, ie money.
In addition, Mrs. K, as Chavez in their approach and as capitalist in your shopping list, has decided to solve its cash shortage with a booty that is clearly attractive: pension funds. It is not illogical to think that a fund of such proportions to give you more liquidity to the government, and last, we can handle a bulging current account. Better or for worse, not all Argentines are going to retire today, so that several million dollars available. The concern is that there are a number of questions that arise from the measure, and have not been completely resolved by the Government. First, it is not clear the criteria by which the Government intends to manage that money, do not know whether to make it profitable, keep it fixed or other funds. We do not know what will be the amount which will ensure the state nor the mechanism of contribution. Moreover, there is no clarity of the system to take to seize the funds. It could be an expropriation AFJP, a compulsory purchase or another alternative.
If we are dealing with a country which has not been achieved due to retire even the first generation of people under this system, we can try to evaluate it badly seriously. In addition, those who suffered the change of regime and suffered the first loss for it, and with this, assume a new one without guarantee anything in return. In my opinion, this measure is due solely and exclusively, to a whimsical populist maneuver worthy of financial and political mess that reigns beyond the Andes. It remains surprising that a country with more resources in the region have very high levels of poverty and corruption, where its citizens do not trust in the destination state to give their money and have never raised their retirement based on their life savings. Argentina is not an example to follow, at least in this area, but no shortage of nostalgic voices that want to return to the model where the state claimed all, taking himself out of business and away from the desired sustainability.
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