Mercosur Shares Social Concerns, Diverges on Economy

by Dave

Politicians, stuck in an industrial era mindset, love to “protect jobs” since that plays well among interest groups like unions, while they completely neglect skill-building, the key to not only citizens being eligible for many jobs in the knowledge era, but also in a position to create jobs as entrepreneurs.

Unlike someone who has been a freight elevator operator on a construction site (inside source: on chicago construction sites, a $70,000+ salary), shielded from reality by a union contract, a person like Ronaldinho whose skills with a soccer ball are superhuman, doesn’t need his “job” to be protected by Lula. With skills like that, he can get a “job” at any top European club. Clubs he’s had a job with include Gremio, PSG, FC Barcelona and now, AC Milan.

I am amazed at how the private insurance markets have not been tapped to provide for “occupational loss insurance” in many countries. It makes more sense for government to subsidize individual contributions to those types of policies than protect particular jobs.

Modeled on long-term disability insurance,  the payments can cover 60-70% of salary for upto 2 years worth of job loss and the necessary retraining. Employees can choose to supplement this salary by purchasing additional coverage.

In the example below, it is better to beef up the employee safety net than provide blanket company loan guarantees.


Brazilian President Luiz Inácio Lula da Silva highlighted the formalisation of preferential tariff agreements between Mercosur and India, and Mercosur and the Southern Africa Customs Union (comprising Botswana, Lesotho, Namibia, South Africa and Swaziland), as well as the expansion of the trade agreement with Chile to include services, as is also being pursued with Colombia.

The creation of a fund to guarantee loans taken out by small and medium companies, set up to stimulate this sector especially in Paraguay and Uruguay, is part of Brazil’s commitment to “strengthening the smaller economies,” said Lula, who announced that in 2009 “Brazil will double its contribution to FOCEM” (the Mercosur Structural Convergence Fund), created in 2005 to mitigate the asymmetries within the bloc.

“Protecting jobs and social inclusion”
(??) was a concern expressed by several of the presidents, in the context of a crisis which, in Lula’s view, reflects the “perversions of the dominant economic system.”

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