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Evaluation of four decades of pension privatization in Latin America, 1980-2000 : promises and reality
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1. Authoritarian or Manipulative Regimes under a Quasi-Democratic Regime or an Incipient Democracy The structural reform processes that are discussed below are ordered according to the current political regime at the time of the reform, from the most author­itarian regime with absolutely no social dialogue to the least authoritarian, but with manipulation and little social dialogue. Chile The Augusto Pinochets dictatorship abrogated the constitution, dissolved the congress, repressed political parties, disbanded unions, and suspended civil and political rights. Under these autocratic conditions, the Minister of Labor, a neoliberal economist who had supported the new labor regulations(includ­ing limitations on the rights to form unions and to strike), prepared the sub­stitutive system bill. The Military Junta imposed this system, with no public debate, through emergency decrees. Due to the political situation, there was little opposition to the reform by several pension-fund administrators, expert scholars, and some military who opposed privatization 6 (political parties and the unions were dissolved), therefore, there was no social dialogue. Peru President Alberto Fujimori carried out a self-coup that dissolved the con­gress, suspended the constitution, and established an authoritarian gov­ernment. The reform was opposed by the workers, the pensioners, and the employees of the public pension system(IPSS). In a political compromise, Fujimori proposed the parallel system(but with no parametric reform of the public system) that was approved by congress, where he had a large major­ity in 1992, without prior social dialogue. As very few insured had switched from the public to the private system, the government enacted additional legislation to promote the change: it eliminated the employer contribution, increased the worker contribution in the public system, and prohibited that 6 For a discussion on the various positions taken by the generals of the Military Junta see Matus, 2020. 26