At a conference in the University of CEMA, Libertad y Progreso’s representative Marcos Hilding Ohlsson participated in a debate alongside Instituto Amagi’s economist Roberto Cachanovsky and Acton Institute’s Cecilia Vázquez Ger. The debate focused on how to make social programs more effective and the promotion of their replacement by producing jobs in the private sector. Concluding remarks were carried out by Gustavo Lazzari, director of the Atlas Foundation. Economic analyst Iván Carrino moderated.
Lecturers highlighted that the Argentine government needs to change the incentive system that governs social programs so it becomes more efficient. Cachanovsky gave the example of a small town in the province of Córdoba where 120% of the population receives a disability pension. In this town, it is so easy to carry out the procedure to get this pension that it attracts people from other places and enables some doctors to create a business out of keeping the first few months of the pension in exchange for signing a disability certificate.
Experts emphasized that social public spending has multiplied 7 times over the last decade – growing from 27,000 million to 80,000 million. However, poverty levels did not decrease substantially. Hence, the system needs to be changed urgently. One of the most significant issues is that many social programs are managed by the same “puntero” (political leader) who uses them for political gain. Some of these programs have the power to distribute thousands of plans. Thus, during the conference, a proposal to put the Ministry of Social Development in charge of this distribution was introduced. This would be particularly effective if done through municipalities, which have closer contact with the recipients and know the particulars of each case better.
Another proposal introduced at the conference was to create a register including all the beneficiaries of the programs in order to retrain them so that they can find a job in the private sector. They would still receive their social plan for a certain period of time so they can survive until they find a new job, but an incentive to actively look for employment would still exist. Limiting the number of plans received to 1 per person is also key for the success of this plan, since the money received from additional plans can be supplemented for the one received from the main plan, which is used to make a living. Therefore, receiving more than 1 plan can disparage the need to look for work. In Argentina, there are 1,800,000 individuals who receive more than 1 plan.
According to these lecturers, the incentives mentioned here have to be complemented with labor legislation that allows businesses to hire (and fire) employees easily, to reinforce their demand for new hirees and more people can find jobs. “Only 1% of businesses in Argentina are big multinationals. The other 99% is made small businesses who are responsible for 64% of the jobs in our country, we should help them grow.” We should help people to express themselves and develop their best qualities, we should see them as the solution rather than the problem” Hilding Ohlsson concluded.