Double coverage in the pension system is growing

In the list of topics proposed by the government to be agreed with the political parties, one key point is to give sustainability and equity to the pension system. Though there are several problems, one particularly destabilizing factor is the sustained increase in double coverage in pensions. (more…)

The zero deficit target is not enough to put an end to the crisis

Even though the primary deficit has been falling, the rise in country risk reflects a deep distrust in Argentina’s ability to repay its public debt. The way out is not to change the cabinet or the candidates for the polls, but to take steps in the direction of structural reforms demonstrating the decision to build fiscal solvency.

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Instead of abandon it, the fiscal consensus should be deepened

The government announcements to alleviate the crisis include re-freezing utility prices. Thus, a pillar in the goal of reducing public spending and eliminating inequities is canceled. Instead of regressing in such a strategic issue, such as utility prices, a deepening of the Fiscal Consensus should be worked.

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Public revenues in Argentina are higher than in Chile and Uruguay

The IMF expressed concern because tax revenues grow below the projected. This is contradictory given the very high tax pressure of Argentina. The experience of neighboring countries suggests that with less but better-managed public spending, the fiscal deficit can be reduced and the social situation improved.

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Inflation reduced jobs destruction

Surprise prevailed given that the crisis has not generated a higher rise in unemployment. The main explanation is that the acceleration of inflation caused a deep loss in the real value of labor costs. This fact, together with the increase in informal jobs, was the rudimentary way by which the labor market adjusted.

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Reducing the gender gap reduces the income gap

Women’s Day calls for reflection on the multiple facets that women´s discrimination take shape. A particularly important one is in the access of women to the labor market. If many poor women who do not work today could do it, poverty could be cut by half.

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Argentina needs to export to the level of Chile and Uruguay

The concern about the price of the dollar is a constant in the lives of Argentines. The dollar will stop being a problem the day that Argentina substantially increases its exports. Neighboring countries are achieving this on the basis of exporting much more than Argentina measured in terms of inhabitants.

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80% of investment in education goes to public schools

Accepting that public schools are for the poor and private schools for families with medium and high incomes deepens social fragmentation. It would be more equitable and efficient to give the lower income families the possibility of also choosing a private school with financing and controls of the state.

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To reduce taxes, it is necessary to improve the vat management

The government ordered a reduction of distortionary taxes for certain sectors of production. This is a good sign, but it is insufficient to get out of recession and risky for the goal of fiscal balance. Improving VAT management is the way out of this challenging trade-off.

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Tax collection could be doubled without raising rates

Only half of the potential resources are collected with VAT. Therefore, instead of continuing to increase taxes that discourage production and employment, efforts should be concentrated on better VAT administration. To this end, a profound transformation of the tax administration is unavoidable.

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