Structural Heterogeneity and Poor Microenterprises in Argentina
Marta Bekerman and Cecilia Rikap
National government programs ( ...continuation )

One of the challenges of social assistance programs is achieving the insertion of beneficiary homes into the productive system. On the one hand, this implies that the people involved can receive the assets they need to strengthen their offer on the labor market (through training, access to credit, etc.) and, on the other, it implies generating the necessary demand on the labor market or for their products (in the case of microenterprises).

There are different social programs along these lines oriented to achieve reinsertion to the market economy through the development of productive microenterprises. Within this group of programs, the National Plan for Local Development and Social Economy “Manos a la Obra” (“Lets get to work”) promoted by the Ministry of Social Development stands out from the rest.

This plan has three components: economic and financial support for microenterprises (through subsidies and credits); institutional development through training and technical assistance from different government agencies and nongovernmental institutions; and support for productive projects. By 2007, only 2.4% of this Ministrys budget was allocated to this plan. In 2004, the simplified singletax scheme for small contributors (Monotributo Social), issued by the National Registry of Performers of Social Economy, was sanctioned in accordance with the “Manos a la Obra” Plan. This scheme allows enterpreneurs to depart from informality to be able to issue invoices, access social programs and credit years towards retirement.

Consistent with the “Manos a la Obra” Plan, in mid 2006, the Argentine Congress sanctioned Law 26117 entitled “Financing Social Economy” (Financiamiento de la Economia Social) which is also known as “The Microcredit Law.” The first article of this law indicates that its main objective is, “to regulate, promote and develop a support system for Social Economy that stimulates the comprehensive development of economically disadvantaged individuals and groups.” That is to say it is a law that is essentially designed to strengthen existing microfinance institutions (MFIs). Among the actions proposed in the original bill, this law provided for the creation of the National Fund to Support the Social Economy. This fund grants subsidies and loans to MFIs and works to strengthen them by providing training and technical assistance. In a complementary manner, the National Office for Commercialization was created in 2006, which assists microenterpreneurs to hold fairs and negotiations and to garner financing to bolster their commercialization. In 2008, the Collective Trademark Law (Marca Colectiva) was adopted to distinguish products developed and/or services provided by associative enterprises linked to the social economy.

With these kinds of policies oriented to production, a new program has recently been implemented by the Ministry of Social Development in conjunction with the Ministry of Labor entitled “Argentina Trabaja”: The Social Income through Work Program (“Argentina Works”). The only requisite for entering this program is to have a single source of income; it is aimed at both cooperatives and individuals. The budget foreseen for 2011 was $3.345 million dollars.

From our perpsective, social policy should address a combination of the three aforementioned strategies. On the one hand, we cannot speak of a strategy for economic growth without considering the quality of said growth. Economic policies must emphasize equity and social inclusion. They should also allow for incorporation to the formal market and should distance unemployed workers from precariousness.

Nonetheless, reality reveals the existence of socalled “core” unemployment, making it impossible to end exclusion in the shortterm. This requires guaranteeing a minimum income for all citizens linked to improvements in housing, education and health infrastructure. In this context, the Universal Child Allowance implemented in Argentina is a pertinent measure.

But policies oriented to intensify strategies aimed at providing economic solutions to sectors in situations of structural marginalization, that will not easily be taken in by the formal labor market, are also necessary. To this end, additional specific productive policies are necessary to address the specificity of certain populations.