Inter-American Development Bank (IDB) on Wednesday highlighted the role to be played by reforms to the social security system in Peru's and other Latin American countries' public policy.
"Social security reforms will be one of the cornerstones of public policy in coming decades," IDB Labor Market and Social Security Unit senior specialist Mariano Bosch affirmed.
In this sense, the IDB economist noted said reforms will be governed by two major forces operating in the world, and particularly in Latin America.
"The first is population aging, which will triple over the next 30 years, and the other one comprises major changes in the mechanics of labor markets," the officer explained.
Both factors will determine how to effectively provide social security in health, pensions and unemployment insurance.
"Countries of the region have not been able to provide proper coverage for these risks, and have only focused on wage earners," he observed.
On average, less than 50% of workers in the region make pension contributions at a given time.
"That means around 170 million people in Latin America are not contributing to pensions, in a system based almost exclusively on getting wage earners to make contributions," he pointed out.
Lastly, the IDB representative stressed social security requires a comprehensive approach with a target-oriented vision and internal consistency.
"It is important that each and every one of the elements of social security —whether pensions, health or unemployment insurance— present internal consistency; that is, not promising pensions one may not be able to pay or health services one may not cover in the future," he concluded.