Mexican Social Security
Mexico plans to give Congress proposals soon for a major reform of its social security system. The plan, says Finance Secretary Guillermo Ortiz, is to switch from the "pay as you go" system to individual, capitalized accounts. Ortiz says the government will initially have to fund the new system to the tune of 1% of domestic output per year for the next 5 to 6 years. But he hopes the change will eventually raise the low domestic savings rates that figured in the peso crisis.
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