44. What do you think about big public institutions?
Social Security and ISSSTE (Social Security Institute for Government Employees, as per initials in Spanish) represent very severe problems derived from the retirement age. It was established that workers would retire while still very young, and then life expectancy increased from 50 to 85, or 80, right? When you are born your life expectancy is 76 or 77 years old, but when you turn 60, you have made it and then life expectancy is 85 years.
Therefore when a worker retires from the Social Security at 45 years old, I believe they retire after 25 years of work, they are supported 35 or 40 years and it is too much for a person to live 35 years without working, but besides that, they do not pay fees from 45 to 60 years of age.
Then, I believe that an important step has been taken at the Social Security and I believe that this is not only an important problem for Mexico, but for the entire world, including the United States and the developed countries, namely changing the retirement age, that is that people continue to retire and even better off than before, but at an older age. This means, I believe that the time will come when we should retire at 70. I believe we should retire at 65, maybe 70, but let’s say 65.
Social Security members retire at age 65, yes at 65, but I believe that the solution is to change the retirement age. It is not possible to make tax reforms to solve the retirement problem, it would be very foolish, and it would be an aspirin but would not cure the disease.
The important thing is that the country does not have a limited public investment capacity.
Yes, you invest 10 to 15 per cent with private investment. I do not know, I will try to get the data of how much should be invested for each growth percentage point in the economy, right? I believe that structure wise it should be approximately three or 4 per cent, in investment so that it grows that percentage point.
If we could invest for it to grow two more percentage points, we could have a 3 per cent growth. How can this be achieved? Well, with private investment.
Public services can be financed with public investment, they are the PPPS, (as per initials in Spanish), and they are Public-Private Associations, right? Then, when are you going to build public services, a jail will cost 20 million dollars, so instead of taking this money from the budget, you pay it in 20 years and then you invest one twentieth, because it can do 20 things.
Or for example, if the water problem is managed efficiently, even if it is a public service, the public or private sector can provide it. Most of the population has to be subsidized, but big consumers should be charged with a profit. For example, let us assume that the cost of water per cubic meter is ten or 12 pesos, and you charge nothing to the person for the first 15 cubic meters or you charge a peso or two per meter, and all those consuming more than 15 cubic meters are charged 20 or 25 pesos per meter.
I believe that Pemex is self-sufficient and can be managed as a company. I also believe that Comisión Federal de Electricidad can be more efficient, with the investment that is going to be financed by the markets it does not require tax revenues and then Pemex and CFE become taxpayers and they are not a burden.
The ideal in some things is to subrogate services a little.
There is another health problem asides from retirement that is very serious and can be very important, and it is that there are no more cheap diseases. Vaccination; it is cheap to inoculate the entire population; gastrointestinal, etcetera have been extinguished and now diseases are the result of longevity, heart, kidney disorders, cancer. Then the public health services will be very expensive. Hence the project to have specialized medical units that give private and public service, or the public medical units that can also provide other kinds of service to generate revenues.
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