A new withdrawal would generate greater lack of social protection for the elderly, the head of the MEF pointed out, among one of the reasons for not approving this provision promoted by Congress.
The head of the Ministry of Economy and Finance (MEF), Alex Contreras, stated that the approval of a seventh retirement of the AFPs by the Congress of the Republic would be the worst measure. He assured that this is an issue that worries even foreign investors, during an interview with Punto Final. It should be noted that bills have been presented in Congress to approve a new withdrawal of up to 4 UIT.
“My vision is that it would be the worst measure. It would not only have an impact on affiliates, it would have an impact on the country, on the ability to fairly finance all the infrastructure that we want to finance. It will also have an impact on the country’s saving capacity, because in the long term what is invested in the country depends a lot on both internal and external savings,” Contreras said.
The minister recalled that the first withdrawals took place in exceptional circumstances, due to the COVID-19 pandemic. Today we are in an open economy where you can work. “It is true, the conflict has an impact, but it does not compare with the impact of the pandemic,” he said.
On the other hand, he indicated that he expects Congress to consider that the population structure by age is going to change “dramatically.” Thus, the percentage of older adults will increase in the next 30 yearsTherefore, new withdrawals would expose them to a situation of lack of social protection.
The minister pointed out that foreign investors have two concerns, the first is the definition of the date for the elections and the second is a new withdrawal from the AFPs.
“Because when the country goes out to take on a debt, investors say, ok, I’ll buy this asset, but if something happens, I want to be sure that I’m going to sell this asset. The natural buyer of Peruvian bonds are the AFPs. So what has happened to the size of the AFPs’ funds? In other words, the possibility of investors to be able to sell Peruvian bonds and leave the country is more limited,” explained in the interview.
In short, for the head of the MEF, a new withdrawal would generate greater vulnerability in a context where there will be a larger Peruvian elderly population; second, we would have less borrowing capacity and third, less saving capacity that will impact growth capacity.
Source: Larepublica
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