Argentina — страница 6

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eliminating the need for the inflation tax. This involves efforts to raise the primary balance from about $3.3 billion in 1991 to about $4. 1 billion in 1995. The success of this program will largely depend on medium-term reforms to improve the structural underpinnings of public finance, such as social security legislation, labor reforms, and the evolution of the fiscal relationships with the provinces, given the increasing decentralization of power and responsibilities from the center to provincial governments . This scenario is attainable if the government continues to improve its fiscal position, and if private markets generate a smooth transition to a sustainable balance of payments and growth path. There are significant risks to this program. The probability of adverse

events affecting the convertible peso declines, however, as the government progresses on reforms that improve the fundamentals of public finance. Past reforms in the public sector anchor stabilization and are unlikely to be reversed during any financial turbulence. Also, reserves are the highest in a decade and cover the monetary base (although not the deposit base), which would deter a speculative attack on the peso. Even if problems give rise to pressure to alter the policy framework, in all likelihood any emerging policy regime would of necessity focus on maintaining fiscal balance and policies conducive to private investment. Over the last few years Argentina has enacted serious and difficult structural reforms with considerable public support. The lack of alternatives to

fiscal discipline and price stability, and memories of the hyperinflation of 1989/90, have made stability politically popular. These facts are powerful ballast that is likely to keep the ship of structural adjustment headed in the same direction, even in a financial storm.