Argentina reforms advance but carry political cost

2017 ◽  
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Public Spending ◽  
Fiscal Deficit ◽  
Content Type ◽  
Pension Reforms ◽  
Debt Default ◽  
Political Cost ◽  
The Government

Significance Following its strong results in the October mid-term election, the government has been pressing tax and pension reforms and a new fiscal accord with provincial governors; all except the pension reform must now go to the Senate. The measures may ease investor concerns that the government’s inability to reduce the fiscal deficit could end in a new debt default. Impacts The tax reform’s effect on high tax pressure will be moderate at best. Provinces’ ability to reduce distortive taxes will depend on their ability to cut public spending. Changes to the pension system will prove especially conflictive politically.

Argentine debt success does not eliminate doubts

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Policy Making ◽  
Fiscal Deficit ◽  
Bond Issue ◽  
Content Type ◽  
Fiscal Adjustment ◽  
Debt Default ◽  
Political Cost ◽  
The Government ◽  
Do So

Subject Economic policy-making. Significance The government in April successfully ended the long-running debt default through an agreement with the most intransigent holdout creditors and a bond issue worth 16.5 billion dollars, the largest in Argentina's history. Despite this step, doubts remain concerning the government's ability to reduce the huge fiscal deficit and even its willingness to do so, as renewed access to lending will allow it to ease fiscal adjustment, reducing the high political cost involved. Impacts There is a risk that, with the return of global lending, the government will choose to postpone fiscal adjustment. In the absence of a clear stabilisation plan, efforts to slow inflation will take time. If the economy does not rebound in coming months, the government's performance in October 2017 mid-term elections will be undermined.

Monetary tightening carries high cost in Argentina

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Current Account Deficit ◽  
Public Spending ◽  
Medium Term ◽  
Content Type ◽  
Financial Volatility ◽  
Fiscal Adjustment ◽  
Debt Default ◽  
Floating Exchange Rate ◽  
The Government

Significance Despite its commitment to a floating exchange rate, the government has been forced to prioritise exchange rate stabilisation. After the change of Central Bank (BCRA) authorities in mid-June failed to stop the latest currency run, the government further tightened monetary policy. Aiming to alleviate fears of a new medium-term debt default, the government is emphasising its commitment to fiscal adjustment, even including the possibility of new taxes, which runs counter to efforts to reduce tax pressure. Impacts Interest rate rises and closer control of monetary aggregates may prompt a recession. Depreciation will help to reduce the current account deficit in 2018 but will worsen debt indicators. Growing political uncertainty and difficulty in cutting public spending will sustain financial volatility.

Policy will strain the German pension system

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Pension System ◽  
Pension Reform ◽  
Government Policies ◽  
Occupational Pension ◽  
Content Type ◽  
Low Interest Rates ◽  
Old Age Poverty ◽  
The Government ◽  
Pension Liabilities

Subject Germany’s pension system. Significance The pension system is under increasing pressure from demographic change, low interest rates and generous government policies. Impacts Increasing tax liabilities on pension incomes could increase the prevalence of old-age poverty. Rising pension liabilities in the occupational pension pillar could dampen business investment in years ahead. The question of pension reform could be the undoing of the government when the coalition parties meet to evaluate their work in late 2019.

Chile pension reform will not address grievances

2018 ◽  
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Public Spending ◽  
Fine Tuning ◽  
Living Standard ◽  
The Political ◽  
Retirement Age ◽  
Content Type ◽  
The One ◽  
Chilean Population

Subject Pension reform plans. Significance A pension reform, announced by President Sebastian Pinera on October 28, treads a cautious path between the conflicting pressures of public anger with low pensions and the lack of legitimacy of Chile’s private pension system, on the one hand, and the political difficulty of increasing the retirement age and constraints on public spending, on the other. Impacts With the Chilean population ageing rapidly, pensions will become an ever more important election issue. The left argues that the proposed reform will represent only a fine-tuning of the structurally flawed AFP system. Despite the proposed measures, retirement would still mean a significantly lower living standard for much of the middle class.

The road ahead: should Hong Kong develop five pillars of old age protection?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gigi Lam
Keyword(s):  
Hong Kong ◽  
Old Age ◽  
Pension System ◽  
Pension Reform ◽  
Critical Time ◽  
Welfare System ◽  
Low Fertility ◽  
Content Type ◽  
The Government ◽  
Familial Dependence

PurposeThis paper demonstrates that Hong Kong currently provides four pillars of old-age protection: a publicly managed and noncontributory social security system (zero pillar), a funded contribution scheme (the second pillar), voluntary personal savings (the third pillar) and informal support, formal social programs and other individual financial assets (the fourth pillar). This paper aims at evaluating current four pillars of old-age protection and unraveling the deep-seated causes underlying the current old-age protection model by tracing a short history from 1965 onward. This paper aims at making recommendations about the current old-age protection model.Design/methodology/approachThe paper analyzes the current four pillars of old age protection. A comprehensive literature review was conducted covering relevant government reports, academics' journal papers and nongovernmental organizations' reports concerning the development of old age protection system from 1965 to the present.FindingsThe poverty rate of elderly residents was approximately 44.5% between 2009 and 2018, indicating that the four pillars of old-age protection had been unable to alleviate poverty in the aging population. The development of the current four pillars is attributed to a residual welfare system, the effectiveness of which is further dependent on familial dependence or welfare financialization. However, the reliability of familial dependence is affected by the declining coresidence rate and low fertility rate, whereas welfare financialization not only predominately favors financial institutions but also exacerbates income polarization. Therefore, the University of Hong Kong (2014) introduced an additional pillar of noncontributory social pension and assistance, which generated a contentious debate. The Hong Kong Special Administrative Region (HKSAR) government initiated a public engagement exercise on retirement protection in 2015 to assess public opinion on old-age protection. These consultation exercises were met with broad public disappointment because of the explicit reservations imposed by the government on the proposals.Practical implicationsAlthough the government's resistant attitude can be attributed to the residual welfare system, pension reform needs to be urgently implemented at three levels, namely strengthening of each pillar, emphasis on the pillar's interrelatedness and introduction of the first pillar.Originality/valueThe poverty of the elderly population is serious in Hong Kong. It is important to solve the deep-seated problems faced by the current old-age protection model. Hence, it comes a critical time to design a sustainable old-age protection model despite the heated discussion on the establishment of a central provident fund and pension system among officials since 1960s.

scholarly journals You Win Some, You Lose Some: Pension Reform in Bachelet’s First and Second Administrations

2019 ◽  
Vol 11 (2) ◽  
pp. 204-230 ◽  
Author(s):  
Silvia Borzutzky
Keyword(s):  
Political Ideology ◽  
Pension System ◽  
Pension Reform ◽  
Presidential Power ◽  
Pension Policy ◽  
The Will ◽  
The Government ◽  
The Impact ◽  
Government Coalition

This article analyses and compares President Bachelet’s successful efforts to reform the Chilean pension system in 2008 and her failure to achieve the same objective in 2017. The article addresses the impact of electoral promises, policy legacies, policy ideology, presidential power, the role of the private sector, and the role that the government coalitions had in the process of pension reform during the Bachelet administrations. We argue that the 2008 reform was possible because of Bachelet’s personal commitment to reform and the presence of a stable governing coalition that had the will and capacity to legislate. In the second administration, although the policy legacies and ideology had remained the same, the reform did not materialise due to intense conflict within the administration and within the government coalition, as well as conflict between the administration and the coalition. These conflicts, in turn, generated a vicious cycle responsible for Bachelet’s declining popularity, limited political capital, and reduced support for reform. A stagnant economy further undermined these efforts. In brief, this article argues that when assessing success and failure in pension policy reform it is important to analyse not only policy legacies and political ideology but also the strength of the executive, the cohesion of the governing coalition, and the country’s economic performance.

Pension Reform Options in Hong Kong

2018 ◽  
Vol 29 (2) ◽  
pp. 245-258
Author(s):  
Che Cheong Poon ◽  
Fuk Kin Joe Wong
Keyword(s):  
Hong Kong ◽  
Interest Rates ◽  
Pension System ◽  
Pension Reform ◽  
Average Length ◽  
Pension Plan ◽  
Defined Benefit ◽  
System Research ◽  
Retirement Benefit ◽  
The Government

This article argues for the establishment of a defined benefit and partially funded universal pension system. The characteristics of this system represent a publicly managed mandatory contributory pension plan and the coverage of its benefits for all Hong Kong elderly aged above 65. By applying a mathematical model which links up the periodic savings during people’s working life, level of interest rates, average length of time in retirement, and the amount of retirement benefit payments, we calculated the possible scenarios for Hong Kong to reform its pension system. Research results suggest that the proposed system will be financially viable and sustainable provided both the government and its citizens are willing to pay for it.

Brazil faces stagnation risk in 2017

2017 ◽  
Keyword(s):  
Government Spending ◽  
Pension Reform ◽  
Investment Decisions ◽  
Fiscal Crisis ◽  
New Wave ◽  
Short Term ◽  
Business Investment ◽  
Content Type ◽  
The Government

Subject The risk that the Brazilian economy will stagnate, rather than recover, this year. Significance The recent passage of legislation freezing government spending and the ambitious pension reform currently under discussion in Congress are the flagship policies of the government of President Michel Temer. Both seek to defuse Brazil’s fiscal time bomb in the long term. However, they offer little support to immediate expansion in an economy that not only has been in recession since the second quarter of 2014 but is also locked in a low-growth trap will few apparent short-term escape routes. Impacts Popular dissatisfaction may trigger a new wave of demonstrations, further weakening the government. As long as the fiscal crisis persists, the government’s ability to stimulate the economy will be limited. Political risk will be a crucial factor in business investment decisions in Brazil.

Oreskovic government in Croatia may prove short-lived

2016 ◽  
Keyword(s):  
Political Instability ◽  
Public Spending ◽  
Economic Restructuring ◽  
Right Wing ◽  
Case Scenario ◽  
Content Type ◽  
Growth Prospects ◽  
The Government ◽  
Social Conservatism

Significance After protracted negotiations, Croatia, at last, has a government, comprising the conservative Patriotic Coalition -- the Croatian Democratic Union (HDZ), plus a few small parties -- and the centre-right Bridge ('Most') of Independent Lists. The government is unusual because it is led by a non-partisan figure, Tihomir Oreskovic, a businessman who grew up in Canada and has only a shaky grasp of the Croatian language. In a best-case scenario, the government could deliver important and necessary reforms. Impacts Efforts to cut public spending will reduce the risk of a damaging financing crisis. A programme of economic restructuring will boost Croatia's long-term growth prospects. The election of two right-wing parties will consolidate the drift towards social conservatism. Tensions in the coalition will perpetuate political instability and could precipitate new elections.

Fiscal adjustment may prove painful in Uruguay

2016 ◽  
Keyword(s):  
Trade Union ◽  
Public Spending ◽  
High Income ◽  
Content Type ◽  
Public Finances ◽  
Fiscal Adjustment ◽  
Economic Climate ◽  
The Government ◽  
First Time ◽  
Economic Outlook

Subject Uruguay's economic outlook. Significance The government has determined a fiscal adjustment, with tax increases for middle- and high-income earners, delays in public spending plans and a reform of military pensions, in a bid to address worsening public finances. It is the first time that the leftist Frente Amplio (FA), in government since 2005, has faced an adverse economic climate. Impacts Austerity in a context of 'stagflation' will generate political and trade union tensions. Rising unemployment will drive a deterioration in real family incomes. Growth will remain paltry this year and next.

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