Policy brief on Poverty and Development in Argentina - Assignment Example

Policy brief on Poverty and Development in Argentina College Introduction Argentina, despite being a relatively rich nation still remains a country having a relatively high rate of poverty. It will therefore be prudent for the President and all the relevant stakeholders to understand that since the year 1991, Argentina as a nation has undergone a period of adjustment which has resulted to a significant drop in the inflation rate, the opening of the country’s economy to external or foreign commerce and the privatization of the country’s state owned industries1. As a result, these adjustments have had a great impact on the poor people in the country especially because of their significant impacts on the labor demand. There are various strategies that the Argentina government can adopt in order to reduce poverty levels in the country. The growth process of Argentina has further been slowed down due to the recurrence of the financial economic crisis that happened in the year 1995 and 1998. Despite the fact that initial methods made to enhance the economy through numerous progresses on the economic front led real gains in terms of both enhancing welfare and reducing poverty in Argentina, the government should note that since the year 1995, there has been a slight growth in poverty levels which has led to the deterioration of income distribution2. Mister President, to ensure that poverty issues in Argentina are well addressed, strong measures have to be adopted by the relevant people in the country. For example, anti-poverty efforts need to focus on broad areas. Policies and reforms in Argentina ought to result in a pattern of growth which will generally be more rapid and feature a higher rate of employment in the country per unit of output. The Argentinean government should also ensure that access of the poor country in the nation is enhanced since this will ensure that the poor population’s welfare in the country is raised and their productivity and human capital is improved. In addition to that, this will greatly reduce the poverty levels of the country’s population because the ability of the poor population to compete in an economy which has become increasingly globalized will be improved3. In order to fix the poverty issues in the country, the government should reduce the vulnerability of its poor population to losses and shocks in income. This can be well achieved through enhancements or improvements in the safety nets which are aimed at both protecting the poor people during periods of economic downturns and also ensuring that the poor population is kept from entering into short-term adjustments which will have a negative effect on their long term potential of reducing or minimizing their poverty levels. In addition to that, the Honorable President should also ensure that his government comes up with macroeconomic policies which will ensure that there is stable and rapid growth in the country without the need for inflation. Indeed, the generation of labor intensive growth in the country will be so beneficial because they will become an important first stage towards ensuring that there is a significant decline in poverty rates or levels in the country4. For example, the government of Argentina should aim at achieving a “sustained growth per capita income of approximately 1.8 per since this could ultimately minimize poverty in the country by 35% in a period of ten years so all as all these benefits are channeled or directed towards all parts of the country’s economy. This could easily be achieved if your government ensured that the country’s labor markets efficiently operated5. Given the fact that Argentina’s labor market is known to be one of the most regulated and rigid in the developing world, this makes it very easy for prevention of the wage adjustments to occur. As a result, there is great need for your government to initiate some of the relevant short-term reforms which could ensure the facilitation of a more orderly operation in the market place. This can easily be achieved through numerous mechanisms like for example through the elimination of sectoral collective or centralized bargaining agreements that will be extended automatically to all the employees in a given sector regardless of whether they have been signed or expired6. Other significant reforms that can be implemented by the Argentinean government to ensure that poverty issues in the nation are fixed include reducing the high labor costs through reduction of severance payments and labor taxes and also moving towards an unemployment insurance system that is fully funded and which is based upon individual accounts. In addition to that, the Argentinean government should ensure that there is the prevalence of temporary employment in the country which is not subject to payroll taxes like it was initially done under the former “promovidas” and “modalidades” and also ensure that there is extending programs like the PYMES which allow exceptions for people in the small scale enterprises7. Fixation of poverty issues, Mister President should also be based on long term strategies. As a result, there is great need for your government to realize that the major problem facing the country lies in the fact that a huge chunk of its labor force, especially that in the informal sector actually lacks any form of unemployment or pension insurance coverage. As a result, the government should ensure that major reforms are conducted in the labor laws to ensure the reduction of high levels of protectiveness that are currently being experienced in the country. This should then be followed through an extension of minimum coverage to the small enterprises in the country8. Despite the fact that the government has been providing access to various services for its people, this needs to be increased so that poverty levels in the nation are significantly reduced or minimized. As a result, major efforts should be undertaken by the Argentinean government to ensure that the quality and level of education are not only raised but also availed to the poor population in the country. This is because education is the key to a country’s growth and therefore ensuring its availability to the local population in Argentina will have a positive outcome on the country’s economy. Access to both secondary and higher education should therefore be increased to the Argentinean people since it is plain fact that a major problem in Argentina is that children coming from poor families in the country stand higher chances of dropping out of schools due to numerous reasons9. The poor enrolment rate of the poor population in Argentina was further worsened by the recent economic recessions that occurred in the years 1995 and 1999. There are viable strategies that could be adopted by the Argentinean government to ensure that this problem is arrested once and for all. The government should ensure that there is extension of greater investments in educational facilities, for example, extending the “Plan Social Educativo” that is currently in place. In addition to that, the government should also grant cash grants to its poor populations to ensure that their children are kept in school especially at the secondary level as this will greatly offset some of the economic incentives arising from leaving school and also cope with the impacts associated with unemployment10. There is actually a lot that the government of Argentina could do to arrest poverty issues in the country. The establishment or the creation of a system that will entail cost recovery from public university students who at most times tend to come from poor families and the creation of a nationwide system comprising of scholarships for students coming from poor families will be a great step in poverty reduction11. Indeed, hope is not lost for Argentina as a country and therefore the adoption of the above strategies will greatly make the country to become a great economic hub in the world. Bibliography Franko, Patrice. The Puzzle of Latin American Economic Development, 15-17. New York: Rowman & Littlefield, 2007. Katowice, Arie. Globalization and the Distribution of Wealth..., 23-24.New York: Cambridge University Press, 2013. Legge, Stefan. Effects of Minimum Wage Policy on Poverty in Argentina, 20-21. New York: Diplomica Verlag, 2009. Martin, Will et al. Agricultural Price Distortions, Inequality, and Poverty, 32-33. New York: World Bank Publications, 2010. MercoPress. “Official Poverty in Argentina 2.5 Million People: Private Estimate: 11 Million.”MercoPress. http://en.mercopress.com/2013/04/25/official-poverty-in-argentina-2.5-million-people-private-estimate-11-million (accessed October 22, 2014). Summer, Andrew & Jones, Nicola. Child Poverty, Evidence and Policy..., 12-17. New York: Policy Press, 2011. Wodon, Quentin & Cruces Guillermo. Risk Adjusted Poverty in Argentina: Measurement and Determinants, 60-61. New York: United Nations Publications, 2006. World Bank Publications. The Invisible Poor: A Poor Portrait of Rural Poverty in Argentina, 22-24. New York: World Bank Publications, 2010. Read More