Fujimori health care plan sweetens budget

September 4, 1998

PAY rises for lecturers and professors at Peruvian state universities were ruled out this year by the president at the same time as he revealed the introduction of free health insurance for students.

In his annual speech to the nation, President Alberto Fujimori said the budget could not cope with an immediate pay rise for public sector workers including teachers, lecturers or the police, although he admitted that their wages are meagre.

He insisted, however, that the reason for the miserable salaries of this country was a direct result of the size of the budget and nothing to do with the attitude or the wishes of the finance ministry.

The president said he would like to increase the benefits of retired public sector workers, such as lecturers, because he feels the size of their pensions are unfair.

Yet to raise their benefits by 300 soles ($100) would mean an annual payout of 1,800 million soles ($600 million), which represents 10 per cent of the state's annual budget.

He said that the creation of a National Fund of Public Savings, into which the government is putting 40 per cent of the income it receives from privatisation, will in time lead to small increases in the retirement pensions of lecturers, teachers and all other public sector workers.

He blamed the problem on the Peruvian Institute of Social Security which he believed held about $18,000 million when he came to power eight years ago, but in fact was almost bankrupt.

In the meantime he announced that a free health insurance scheme would be extended to students at state universities.

"We recognise the need for a health service for young people which is why we are extending our free insurance scheme to students of higher education. We are certain that this effort will help to deal with the health requirements of students," said Mr Fujimori.

The scheme will allow the poorest students at state universities to benefit from free health checks at doctors, dentists and opticians. Until now they have had to pay for any consultations and health checks.

The scheme for university students is to be organised through low-cost insurance policies that each institution will negotiate with the government. Although few details have been given, it is expected that some of the fees paid by wealthier students at state universities will go towards the cost of these policies, while those who are unable to pay any fees will have free health insurance.

There are more than 50 private universities in Peru and only 30 state-funded universities, which cater for students from poorer families.

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