THE ROLE OF SOCIAL SECURITY PRIVATIZATION IN ARGENTINA'S ECONOMIC CRISIS (original) (raw)

Political Economy in Argentina: The 2002 default-causes and remarks.

the currency board. 12 2.1. What a currency board is. 12 2.2. Evaluating a currency board. 17 2.3. The currency board in Argentina. 20 3. The events which lead to the 2001 crisis. 24 3.1. 1994: the "tequila crisis". 24 3.2. The late 90's: the depreciation of Real. 27 3.3. Menem's proposal: dollarization. 28 3.4. The excessive vulnerability to external shocks. 32 3.5. 1999-2001: De La Rua's attempt to stop the crisis. 35 4. Concluding remarks. 38 References 43 left wing peronism. The nomenclature "peronism" is just a populist term to attract the masses and win the election. 1.1. From the end of WWII to 1983.

On the closure of the Argentine fully funded system

Pensions: An International Journal, 2010

With an early welfare system, Argentina's demography is more similar to the South European countries than to the majority of Latin American ones. The country reformed its old fashioned Pay-As-You-Go system in the 1990s, introducing a Fully Funded scheme, which was intended to solve the financial stress of the social security, as well as to yield positive externalities on the financial system, the savings rate and economic growth. After 15 years of functioning, the system was closed, their affiliates sent to Pay-As-You-Go again, and the accumulated savings went to the public social security administration, which is in charge of future benefits. The official explanation for such an ending was that the international financial crisis was a peril for future pensioners, and also that the (private) pension funds administrators were not the proper managers of the funds. In the Congress, the political majorities for this reform were remarkable strong in both chambers. Protests of the saving accounts owners were not loud, in a country with a tradition of mass demonstrations.

Historical causes of the Argentine crisis (1)

According to the great French historian Pierre Vilar, 'Only a comparative, complete history (economy, societies and civilizations) .. .'is the appropriate instrument to provide us with an understanding of the complexities of a society. More precisely,' ... to distinguish among the many combinations of the old and the new, what is a promise, what is a threat. Among the sciences of man the most illusory', continues Vilar, 'are those that promise to discover a single aspect of reality in isolation-'economy' on the one hand, 'mentalities' on the other-as if all sectors were not always interdependent'. 1 It is on the basis of this all-embracing view (economic, political, social, ideological, national and international) that we will analyse the historical causes of the Argentine crisis of 2001-2002, the most profound in the country's history. The explanations given for the crisis are varied and they are linked with both exogenous and endogenous factors. However, there is a prevalence of unilateral approaches, which concentrate on some factors or others, thus losing the unity of the process. There are those who believe that it is exclusively a question of external factors, such as the effect of the crises that occurred elsewhere from the mid-nineties on: the Mexican crisis (socalled Tequila), the SouthEast Asian crisis (the most important one) in 1997, the Russian crisis, or the Brazilian devaluation of 1999. From a different ideological position, but also stressing external events, the Argentine crisis is apparently a result of globalisation and of policies imposed by international financial bodies responding to the interests of the 'central' countries. Now, since the internal causes are avoided, these views are incapable of explaining why these same phenomena produced different effects on countries with similar characteristics, even within Latin America. At the opposite extreme, that is, where local factors are considered to be the determining factors in the crisis, there are also different approaches. Orthodox thinking blames excessive public spending and the fiscal deficit. However, empirical evidence shows that Argentina tends to have a minimal State and that foreign public indebtedness played a central role in providing the currency required to maintain the convertibility scheme, also

Argentina's Pathway Through Financial Crisis

SSRN Electronic Journal, 2000

ABSTRACT Political support for Argentina's currency board rested on distributing the early gains from ending hyper-inflation and the spending made possible with access to external credit. When these gains were exhausted and external shocks left the peso overvalued, neither Argentina's political system nor its economy could adjust. The needed adjustment went well beyond simple fiscal tightening: it required deciding who would incur the financial losses associated with the deep contraction needed to correct a real over-valuation in a heavily indebted economy. By 2000, Argentina faced the prospect of further economic contraction, a banking crisis and an external sovereign debt crisis. Even if none of the three crises was avoidable, preemptive action might have made one or more of them less severe. Yet preemption was a political orphan - no political constituency in Argentina argued to bring some pain forward for a chance of less pain down the road, and the IMF and G-7 preferred continued financing to the political risk of supporting a new macroeconomic strategy.