Private savings to government
Financial analyst Alejandro Fernandez Whipple makes an important point in a contribution to today’s Diario Libre on how pension plan savings by Dominicans have been invested in government securities.
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Money belonging to Dominican workers is being invested to sustain government deficits, contributing very little to the creation of value in the Dominican economy, he points out. He said that the government instead needs to reduce its spending.
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According to Fernandez, of the RD$44 billion in the accounts administered by the pension plan companies (AFPs), as of September 2008 more than half (47%) or RD$20 billion is invested in financial instruments issued by the Central Bank, the governmental Banco de Reservas and the Banco Nacional de la Vivienda. Other complementary funds add on another RD$8 billion, for RD$28 billion in the hands of government entities. He expects the figure to have increased 30% by now. In the last three [...]
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