Although pensions and retirement plans represent the largest contingent liability for many states, the Fund to Support Pension Restructuring (FARP) is virtually intact four years after it was created, because states won’t comply with the strict requirements to gain access to it, according to the chief of the Finance Secretariat’s state coordination unit, Carlos Alberto Garza.

The three main requirements to obtain access to FARP funding, according to Garza, are: establishing a system of individual accounts for pension recipients; create mechanisms that would enable an employed person switch over to the new pension system; and third, reduce the state’s liabilities on pensions by implementing a self-financing scheme. The fact that not a single state has complied with the three norms is evidence that those rules are difficult indeed to meet.

According to Garza, the state of Sinaloa is the only one that has achieved real advances in the process, but that doesn’t mean it will fulfill all steps. It only means it’s trying. Other states are already having to finance pension plans with budget resources, meaning they’re far from being self-sufficient. Nuevo León, for example, this year will have to earmark 2.6 billion pesos, or 5% of all the federal revenue sharing it gets, to fund pension obligations.

Also, check out the following opinion columns:

“Rich and Powerful”, by Marco Mares

The 16th edition of the Pan American Games Guadalajara 2011 have generated another fierce confrontation, and not exactly on the sporting terrain but in the thorny arena of telecommunications. Television broadcasting of the sporting event, allegedly being carried out by Telcel, has generated the decision by Grupo Iusacell and TV Azteca to file a legal claim against Teléfonos de México. Elsewhere, it seems very likely that Televisa will also sue the telephone carrier. The lawsuits against Telcel are on two separate fronts: one, along the lines of Administrative Law; the other, based on Civil Law. In the first case, the lawsuit would be based on the premise that the telephone carrier is violating its own concession title, since Telmex is expressly forbidden from directly or indirectly broadcasting video signals. And in the second instance, the argument is that it is broadcasting an event for which it has no contract or signed authorization from the Pan American Sports Organization.

“The Great Depression”, by Enrique Campos

Let us not aim for a recovery of the Mexican markets when we ourselves internally go around sowing the seeds of doubt about the shape of the Mexican economy. These are times when investors are extremely suspicious when they perceive any type of movement that could mean risking stability, and what they’re doing right now in Congress does not contribute greatly to our own stability. When there is evidence of serious financial illnesses in Europe or the United States, the last thing we want to portray is symptoms of disease, and fiscal relaxation in times of prudence is not a desirable symptom that is being exposed by Mexican legislators. Not, mind you, that it’s necessarily a bad thing to modify the budget bill so that the fiscal deficit can be 0.5% of GDP instead of the administration’s proposed 0.2%. Rather, it’s a sign than rather than instead of correcting structural failings in the economy, it’s a lot easier to turn to paper revenues, or rather revenues that were dreamed up on paper.

“Strongbox”, by Luis Miguel González

The movie that started off with Occupy Wall Street has not ended. There is a contagion process that is ongoing and that foresees a swelling river. The increase in youth unemployment is one of the most painful symptoms of the economic disease we suffer in this 2009-2011 eclipse. Joblessness has reached levels that constitute an assault against equanimity; 43% in Spain, 40% in Greece, 38% in Croatia, 29% in Ireland, 27% in Portugal, 24% in Italy, 14% in the United States. In Mexico, 7 million youths don’t work or go to school. Worldwide, it’s 78 million, says the U.N. The figures are terrifying, but big numbers are like porn: they don’t scare anyone any more. Youth protests are something that cannot be ignored. One of their most poignant slogans is: “We were trained for a world that doesn’t exist any more”. It’s too early to tell where all this will lead, but we must heed the call and come up with the impossible: new ideas to fix the world.

rmena@eleconomista.com.mx