Argentina's new president, Javier Milei, has introduced economic reforms to tackle high inflation and poverty.

His policies, including slashing state spending and privatizing state-owned entities, have sparked controversy and protests.

Milei's plan includes replacing the peso with the US dollar to curb hyperinflation and stabilize the economy.

Argentina's plan to replace pesos with US dollars lacks funds and requires congressional approval and a constitutional change.

Dollarization may take up to two years to implement and could increase Argentina's inflation rate.

Milei's government has introduced a decree deregulating the economy, repealing over 350 regulations, and allowing privatization of 40 public companies, sparking widespread protests.

The government's economic reforms have been praised for liberalizing the economy, but criticized for threatening social welfare and workers' rights.

The success of Milei's economic reforms will depend on effective implementation, opposition response, and their economic and social impact.

The government's privatization plans and subsidy cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Reducing subsidies and privatizing state-owned companies may increase prices, exacerbate poverty, and lead to job losses and declining public services.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

The success of Milei's economic reforms depends on balancing growth with protecting workers' and vulnerable groups' rights and welfare.

Milei's economic policies have sparked controversy, with some seeing them as a path to growth and others as a route to increased poverty.

The government's spending cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Privatization of state-owned companies can lead to job losses, reduced public services, and higher prices for essential goods.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Milei's economic policies may reduce the state's role and increase private sector activity in Argentina.

Privatization and reduced subsidies may worsen public services, poverty, and inequality, especially for vulnerable groups.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Milei's economic policies have sparked controversy, with some seeing them as a path to growth and others as a route to increased poverty.

The government's spending cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Privatization of state-owned companies can lead to job losses, reduced public services, and higher prices for essential goods.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Milei's economic reforms will succeed if they balance growth with worker and vulnerable group protections and equitable benefit distribution.

Milei's economic policies may reduce the state's role and increase private sector activity in Argentina.

Privatization and reduced subsidies may worsen public services, poverty, and inequality, especially for vulnerable groups.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Milei's economic policies have sparked controversy, with some seeing them as a path to growth and others as a route to increased poverty.

The government's spending cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Privatization of state-owned companies can lead to job losses, reduced public services, and higher prices for essential goods.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Milei's economic reforms will depend on balancing growth and stability with protecting workers' and vulnerable groups' rights.

Argentina's new president, Javier Milei, has introduced economic reforms to tackle high inflation and poverty.

Argentina's new president, Javier Milei, has introduced economic reforms to tackle high inflation and poverty.

Argentina's new president, Javier Milei, has introduced economic reforms to tackle high inflation and poverty.

His policies, including slashing state spending and privatizing state-owned entities, have sparked controversy and protests.

His policies, including slashing state spending and privatizing state-owned entities, have sparked controversy and protests.

His policies, including slashing state spending and privatizing state-owned entities, have sparked controversy and protests.

Milei's plan includes replacing the peso with the US dollar to curb hyperinflation and stabilize the economy.

Milei's plan includes replacing the peso with the US dollar to curb hyperinflation and stabilize the economy.

Milei's plan includes replacing the peso with the US dollar to curb hyperinflation and stabilize the economy.

Argentina's plan to replace pesos with US dollars lacks funds and requires congressional approval and a constitutional change.

Dollarization may take up to two years to implement and could increase Argentina's inflation rate.

Dollarization may take up to two years to implement and could increase Argentina's inflation rate.

Dollarization may take up to two years to implement and could increase Argentina's inflation rate.

Milei's government has introduced a decree deregulating the economy, repealing over 350 regulations, and allowing privatization of 40 public companies, sparking widespread protests.

The government's economic reforms have been praised for liberalizing the economy, but criticized for threatening social welfare and workers' rights.

The success of Milei's economic reforms will depend on effective implementation, opposition response, and their economic and social impact.

The government's privatization plans and subsidy cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Reducing subsidies and privatizing state-owned companies may increase prices, exacerbate poverty, and lead to job losses and declining public services.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

The success of Milei's economic reforms depends on balancing growth with protecting workers' and vulnerable groups' rights and welfare.

Title:

Content: BUENOS AIRES, Argentina — President Javier Milei of Argentina kicked off a visit Wednesday to the United States, where he'll meet with tech billionaire Elon Musk, as his government seeks an infusion of cash to overhaul Argentina's embattled economy.

The populist president started his four-day trip in Miami, home to one of the largest populations of Argentines in the U.S., where he received an honor from the Jewish community Wednesday at an Orthodox synagogue. Milei will meet with Musk on Friday in Texas, his spokesperson said, where he will also tour a factory for Tesla, Musk's electric car company.

Milei's third trip to the U.S. in merely four months as president comes as he reshapes Argentine foreign policy in line with Washington. Standing beside Gen. Laura Richardson, head of the U.S. Southern Command, at the southernmost tip of South America last week, Milei vowed to boost the nations' ''strategic alliance'' — underscoring how he sees U.S. support as vital to the economic overhaul on which he has staked his presidency.

''We took advantage to present a new foreign doctrine for Argentina,'' Milei wrote Wednesday on social media platform X of his meeting with Richardson. In the same post, apparently directed at Musk — a self-declared free speech absolutist — Milei said he promoted ''true freedom of expression'' and slammed journalists critical of his administration as trying to ''stop us from speaking."

''We are not going to remain silent in the face of slander, insult or defamation,'' he wrote.

Milei's plan to drastically cut public spending has inflicted economic pain and encountered resistance in a nation where annual inflation tops 276%. On Wednesday, police forcibly dispersed anti-government protestors blocking a main Buenos Aires artery.

Not only is the U.S. the biggest investor in Argentina, it also has the most influence over the International Monetary Fund, to which Argentina owes $42 billion. The IMF has endorsed Milei's shock therapy for Argentina, agreeing to disburse $4.7 billion from a bailout package the country took out six years ago.

The State Department's investment climate statement last year noted ''capital controls, trade restrictions, and price controls'' as factors hampering investors in Argentina. Milei has vowed to roll back those interventionist policies with market-oriented changes favored by business leaders, like Musk, one of the world's richest men who leads rocket company SpaceX, social media platform X and Tesla.

Milei and Musk — who both share a brash personality-driven style and distaste for government overreach — have expressed mutual admiration. Ahead of his inauguration last December, Milei praised Musk as an ''icon of freedom in the world." Musk gushed over Milei's speech lambasting socialism at the World Economic Forum in Davos, Switzerland, commenting ''So hot'' with a meme of a couple having sex while watching Milei speak.

With its vast lithium reserves, Argentina has much to offer Musk, a dominant player in the electric auto industry who has dubbed the metal, an indispensable ingredient in electric car batteries, "the new oil."

Milei's free-market policies have raised hopes in the U.S. that the metal and other badly needed raw materials can be extracted closer to the U.S., breaking China's dominance of the battery supply chain. The Biden administration said it was exploring investment opportunities in Argentine lithium earlier this year.

Milei's economic policies have sparked controversy, with some seeing them as a path to growth and others as a route to increased poverty.

Title:

Content: December 16, 2023

As Argentina’s new president, it took only one day for Javier Meili to get rid of the Culture Ministry. Miley was inaugurated on December 10, and the next day, the liberal economist and former television commentator delivered on her campaign promise with characteristic bravery. Also on the chopping block – or, rather, in the path of her chainsaw, which Miley wielded throughout her campaign to symbolize her intention to cut government spending – was the Ministry of Women, Gender and Diversity.

Many other ministries were reduced in size and transformed into new entities. The Ministry of Social Development, the Ministry of Education and the Ministry of Labour, Employment and Social Security will be divided into a newly formed Ministry of Human Capital headed by former TV producer Sandra Pettovello. Meanwhile, the ministries of public works, transport, energy, mining and communications will be merged into a new infrastructure ministry. (It appears that the Ministry of Culture and the Ministry of Women, Gender and Diversity will be dissolved entirely.)

Coming out on top after a runoff election against Argentina’s former economy minister Sergio Massa, Miley is keen to show her supporters she is serious about austerity measures. The self-described “anarcho-capitalist” cut widespread subsidies for gas and electricity and canceled public projects, considering these actions necessary to bring Argentina’s economy under control. Additionally, Miley announced a plan to devalue the Argentine peso against the dollar to half its current value in an effort to prevent hyperinflation, a move lauded by the International Monetary Fund, which has held Argentina’s debt to the tune of $40 billion. More is due. Prices in Argentina have more than doubled in the past year, and 40% of the population lives below the poverty line.

Although Miley’s actions are presented as economic policy, they are also a means of exerting control. A fan of Donald Trump and Jair Bolsonaro (former presidents of the US and Brazil, respectively), Miley has a history of blustering, ignoring reporters, and promoting far-right views on issues such as abortion, immigration, climate change, and gun ownership. He also regularly attacks his political rivals, labeling socialists “trash” and “human excrement”. (Bolsonaro also fired his country’s cultural ministry when he took office, and Trump congratulated Miley on her victory, saying he would “make Argentina great again”.)

Miley has referred to his country’s Ministry of Education as “the Ministry of Education”, and his disparaging view of the arts and humanities extends back to history – to the public accounts of those executed and disappeared by Argentina’s 1970s military junta. Casting doubt on the numbers and mocking human rights activists. Miley’s vice president, Victoria Villarruel, a regular supporter of the junta, in September called for a tribute to the “victims” of leftist groups of the 1970s and the dismantling of the ESMA Museum and Memory Site in Buenos Aires. , a former junta prison and torture center, has recently been named a UNESCO World Heritage Site.

Source: www.theartnewspaper.com

The government's spending cuts may significantly impact healthcare, education, energy, low-income households, and the overall economy.

Title:

Content: International News

Who Is Javier Milei?

Alex Paszkowicz

Brandishing a chainsaw throughout his electoral campaign, the libertarian and self-proclaimed ‘anarcho-capitalist’ Javier Milei won the Argentine general election on 19th November 2023. Milei’s policies and personality cause controversy, so who is the television pundit turned politician?

Beating his rival Sergio Massa with 14.4 million votes to Massa’s 11.5 million, Milei will begin his 4-year mandate starting on 10th of December. After winning a majority of just 4 out of the twenty-four Argentine provinces, Massa conceded defeat at the Unión por la Patria‘s campaign house before the results were officially published.

The centre-left finance minister admits that “obviously these are not the results we hoped for, and I have spoken to Javier Milei to congratulate him because he’s the president that the majority of Argentines have chosen for the next four years”.

Massa has also hinted that he will retire from front-line politics.

The Peronist political movement has been pushed out of government

Milei’s victory has dismantled the left-wing political establishment, even ending Argentina’s 2-party political system. Created in the 1940s by Juan and Eva Perón, the Peronist political movement has been pushed out of government, despite ruling for sixteen out of the last twenty years. His campaign fell short despite Massa continuously appealing to voters’ fears surrounding Milei’s volatile character and risky economic policies.

Compared with Massa, and judging by the election result, Milei is seen as the lesser of two evils in Argentina, as the previous Peronist government could not provide economic stability.

The third-largest Latin American economy has almost reached inflation of 150%, and 40% of Argentina’s 45 million population is in poverty. Furthermore, the International Monetary Fund has rescued the Argentine state twenty-two times, with the most recent loan of $44 billion in 2018.

Milei used his platform […] to circulate conspiracy theories

Economist Sergio Armella believes, “it is indisputable that a swift change from the failed economic policies of the past is imperative. The accumulated economic imbalances have grown too large and must be addressed promptly”.

Nicknamed ‘El Loco’ and before running for president, Milei used his platform on television to circulate conspiracy theories around election fraud and Argentina’s economic problems.

Combined with his extravagant personality and viral TikTok videos, he targeted a younger audience who had grown up through economic hardship and strict Coronavirus lockdowns. Milei’s camp is also known to question the national consensus, which has lasted four decades, over the crimes of its 1976 to 1983 dictatorship, which killed around 30,000 people.

“The reconstruction of Argentina begins” [Milei]

The man with five cloned dogs, each named after a different right-wing economist, claims that with his new mandate, ‘“the reconstruction of Argentina begins”. Calling the result a “miracle” in his victory speech, he says that the result “marks the end of decadence in Argentina”.

He believes Argentina will return to being a “global power”, while alluding to those conspiracies he supported in his past where previous governments, “shared the state amonpoliticians and their friends”.

Although he abandoned his chainsaw to improve his public image, the symbol refers to his promise to decrease inflation by cutting public spending by 15% and privatising state companies, while reducing fuel and electricity subsidies.

Milei wants to abolish the central bank and adopt the US dollar as its official currency, to stop the country from printing more money like previous governments. If the dollar’s value continues to devalue, then inflation could rise with a risk of hyperinflation, which could return after three decades.

Aims to sever ties with China

Milei has no interest in joining the BRICS alliance, and aims to sever ties with China to help move towards privatising state-led companies like the oil industry.

According to economist Elizabeth Bacigalupo, this includes an estimated $10 billion in annual savings on energy imports through a new gas pipeline in Vaca Muerta. Also, this year, the drought in Argentina reduced its agricultural exports from $39 billion in 2022 to $23 billion. But with next year’s predictions, exports could be up to $40 billion.

The problem Milei faces is how fragmented the Argentine Congress is. The coalition he formed with the conservatives after the first round only has 10% of the Senate and 15% of the lower house, meaning he will have to negotiate with his political rivals to push through his complicated reforms.

Any delay in economic progress could lead to more inflation and social unrest.

Despite insults hurled at Brazil’s President, Luiz Inácio Lula da Silva, by Milel throughout his campaign, he wished him support on social media, saying “democracy is the voice of the people and must always be respected”.

Donald Trump believes Milei will “Make Argentina Great Again”

Former US president Donald Trump believes Milei will ‘Make Argentina Great Again’. Businessman Elon Musk expressed a similar sentiment and posted, ‘prosperity is ahead for Argentina’.

Reactions from Milei supporters are varied, with voters desperate for change. A supporter named Michelle Chelsea in Buenos Aires says, “economic policies have led us to this situation. Today, more than half of the population has voted for a different option, and I hope that things will change a lot”.

A Food Service Worker, Alejandro Bravo, is hopeful for the future. “It’s an incredible joy. It’s the end of a never-ending decline, so to corrupt politicians, we say, “get lost”‘.

“We’ve had enough corruption, enough insecurity, enough inflation, enough poverty. We were very tired, we wanted something new, we wanted to see new faces”, states supporter Barbara Rubin.

Alex Paszkowicz

Featured image courtesy of Angelica Reyes via Unsplash. Image license found here. No changes were made to this image.

For more content including Uni News, Reviews, Entertainment, Lifestyle, Features and so much more, follow us on Twitter and Instagram, and like our Facebook page for more articles and information on how to get involved.

To keep up to date with all the latest Impact News, you can also follow us on the Impact News’  FacebookInstagram and Twitter page.

Categories
International NewsNews

Privatization of state-owned companies can lead to job losses, reduced public services, and higher prices for essential goods.

Title:

Content: Milei Experiment

In the tangled web of Argentine politics and economics, one figure has emerged as both a lightning rod for controversy and a beacon of hope ~ President Javier Milei.

In the tangled web of Argentine politics and economics, one figure has emerged as both a lightning rod for controversy and a beacon of hope ~ President Javier Milei. His first 100 days in office have been marked by a whirlwind of fiscal manoeuvres, bold policy shifts, and commitment to economic reform. But as Argentina teeters on the edge of uncertainty, Mr Milei’s ambitious agenda raises questions even it offers solutions. At the heart of Mr Milei’s strategy lies a radical departure from conventional wisdom.

Brandishing a chainsaw as a symbol of fiscal austerity, he has pledged to slash spending and achieve a budget surplus, a feat unheard of in a country plagued by decades of fiscal mismanagement. His unorthodox approach has garnered both praise and scepticism, as Argentines grapple with the harsh realities of rising poverty and economic contraction. The cornerstone of Mr Milei’s economic vision is the elimination of money-printing and the pursuit of a unified exchange rate. By devaluing the peso and cutting interest rates, he aims to rein in inflation and restore confidence in the economy.

Yet the path to stability is fraught with pitfalls, as the spectre of recession looms large and investors remain wary of the government’s opaque monetary policies. While Mr Milei’s commitment to reform is commendable, his political isolation poses a significant obstacle to meaningful change. With little support in the Argentine Congress and a fragmented coalition, he faces an uphill battle. The recent defeat of a sprawling omnibus bill highlights the challenges ahead, as competing interests and entrenched political factions threaten to derail Mr Milei’s ambitions. Moreover, the uncertainty surrounding Argentina’s future monetary regime adds another layer of complexity to the equation. Will Mr Milei pivot towards dollarization or pursue a more gradual approach to currency reform? The lack of clarity on this front only serves to fuel investor anxieties and exacerbate economic volatility. Amidst these challenges, Mr Milei’s fate hangs in the balance. How much economic pain can Argentines endure before turning on their unconventional leader? And can Mr Milei muster the political support needed to navigate the treacherous waters of Argentine politics?

Advertisement

In the end, the trajectory of Mr Milei’s presidency hinges on the delicate balance between economic resilience and political manoeuvring. Should he manage to maintain public support and secure crucial alliances, Mr Milei could emerge as a formidable force in next year’s mid-term elections. However, any slip in popularity could spell disaster for his ambitious agenda, opening the door for his adversaries to dismantle his presidency. Whether Mr Milei’s gamble will pay off remains to be seen. But one thing is certain. In a country accustomed to political upheaval and economic turmoil, the journey towards reform is bound to be fraught with uncertainty and adversity. Only time will tell whether Mr Milei’s vision for Argentina’s future will lead to prosperity or further hardship

Advertisement

How will Milei's reforms impact workers?

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

Title:

Content: Argentina election: Javier Milei's radical proposals face test of reality

  • Oops!
    Something went wrong.
    Please try again later.

Javier Milei, the anti-establishment politician who cruised to victory in the Argentine presidential election last week, has courted intense controversy with radical, provocative policy proposals and statements.

This led many detractors of the self-styled "anarcho-capitalist" to call his candidacy a "leap into the void".

Now, with the mop-haired president-elect only two weeks away from taking over Latin America's third-largest economy, many are asking, how will his policies and positions face the test of reality?

Taming inflation takes time

Javier Milei had proposed to dollarise the economy and eliminate the Argentine Central Bank as a strategy to "kill" hyper-inflation. This meant making the US dollar the national currency in place of the Argentine peso, whose value, Mr Milei said, had been "melting like blocks of ice in the Sahara".

One obstacle is that ditching the Central Bank and making the US dollar legal tender would need approval from the Argentina's Congress and could even require changing the constitution.

Although Mr Milei convincingly won the presidency, his Libertad Avanza (Freedom Advances) movement is barely the third largest political force in Congress. This suggests difficult negotiations might be in store.

Some economists have also questioned whether Mr Milei's plans are feasible, saying they would weaken his government's ability to manage domestic monetary policy.

Having the US dollar as the Argentine currency would effectively leave interest rate policy in the hands of the US Federal Reserve. Argentina's economy would be more vulnerable to external shocks involving the US dollar, for example sudden rises in prices for oil and fuel imports, which could make internal adjustments even more painful inside the country.

Sceptics also point out that Argentina would need to have in hand the US dollars to replace the pesos. Experts believe this could require anywhere between US $35bn to $50bn which indebted Argentina currently does not have and may not be able to borrow easily.

Mr Milei himself has admitted his "shock adjustment" economic stabilisation recipe could actually take up to two years to bring down inflation. "Saying anything else is lying," he said.

A climate sceptic?

Another topic that had made media headlines was Mr Milei's apparent declaration of himself as a climate change "sceptic", that is, someone who denies the role of humans in global warming.

"I do not deny climate change. What I am saying is that there is a temperature cycle in the history of the Earth... Therefore, all those policies that blame humans for climate change are false," Mr Milei said during a presidential debate last month, causing much commentary and criticism.

In his proposed government programme, one of the numerous ministries he had said he planned to axe would be the existing environment ministry.

Such apparent climate scepticism risked putting Mr Milei sharply out of tune with an international majority of governments and leaders who plan to gather at the COP28 climate conference in Dubai soon to seek urgent solutions to the problems of climate change and global warming.

Pragmatism and the Pope

Before he was elected, Mr Milei virulently attacked Argentine Pope Francis, calling him a "Jesuit who promotes communism", and even the "representative of the evil one [the Devil] on Earth".

Such statements caused frictions with the local Catholic Church and the Vatican.

However, this antagonism appeared to miraculously dissipate only days after his election win, when Mr Milei had what he called a "very friendly" phone call with the Pope, whom he addressed as "Your Holiness", inviting him to visit Argentina in 2024.

Asked in a TV interview about this change of heart, Mr Milei conceded that, when one is president, "there are some things that require greater doses of pragmatism".

No break with China and Brazil

Before his election, Milei had signalled he could freeze ties with Brazil and China, Argentina's two top trading partners, on the grounds that he did "not make pacts with communists".

"I am going to be aligned with the United States, Israel, and the free world," he said.

Not surprisingly, this assertion caused consternation in Beijing and Brasilia, as well as in Argentina.

A Chinese foreign ministry spokesperson was quoted as warning that it would be a "huge foreign policy mistake" for Argentina to cut ties with countries such as China and Brazil.

Mr Milei's predecessor, outgoing left-wing President Alberto Fernández, had carefully nurtured ties with Beijing and had welcomed an invitation to join Brics, the China-led group which also comprises Brazil, Russia, India, and South Africa.

Experts questioned the wisdom of dismantling a relationship that clearly brought benefits to Argentina, and not only by China being a top market for Argentina's soybean, meat and grains.

China was also helping to prop up Argentina's financial reserves with a major currency swap deal - significant support for a country already heavily indebted to the International Monetary Fund (IMF).

Days after the election, however, there seemed to be clear signs that no major break in relations was planned. The president-elect received a personal letter of "congratulations and good wishes" from Chinese President Xi Jinping and Mr Milei himself made a point of thanking Xi on social media.

Mr Milei's pick for foreign minister, Diana Mondino, also dismissed as "nonsense" any suggestion that there would be a rupture in "commercial relations" with China or Brazil.

In Brazil, Mr Milei's invitation for former President Jair Bolsonaro to attend his 10 December inauguration was interpreted as "unfriendly" towards Brazil's current left-wing President Luiz Inácio Lula da Silva.

But Milei has since said Lula would be "well-received", if he wanted to come.

Dictatorship denial

Mr Milei and his vice-presidential running-mate Victoria Villarruel also ignited intense controversy during the campaign with their position regarding Argentina's 1976-83 military dictatorship.

Defying traditional positions held by Argentina's government and society for the last 40 years, Mr Milei caused outrage by contesting the generally accepted estimate of those abducted and "disappeared" in the dictatorship - 30,000 - asserting the actual number was closer to 9,000.

The candidate argued that the political violence of the 1970s in Argentina was a two-sided "war" in which "the forces of the state committed excesses but the terrorists [anti-government guerrillas] ... [also] committed crimes against humanity".

This equivalence of presentation of the two sides raised howls of protest from groups like the Plaza de Mayo mothers and grandmothers of disappeared persons.

This was just another striking way in which the Milei-Villarruel duo were trying to shake up the political status quo in Argentina. The next four years will show if they can do it.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

Title:

Content:   1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Argentina presidential election: A runoff of economic ideals

Tobias Käufer
November 17, 2023

Argentina's Economic Minister Sergio Massa and libertarian Javier Milei face off in a nail-biting presidential runoff. The two candidates have radically different solutions to Argentina's economic woes.

https://p.dw.com/p/4YuiH

Economic policy is the key issue in Argentina's runoff election on Sunday, as voters decide between the economic policy of current Economy Minister Sergio Massa and his rival Javier Milei, a far-right libertarian economist known for his radical free-market liberalism.

Argentina's dire economic figures recently reported by the National Statistics Institute (INDEC) may speak for a change after the depressed Latin American country's cost of living surged a staggering 142.7% over the year. The poverty rate in September stood at 38.9%, according to the Buenos Aires-based Pontificia Universidad Catolica (UCA).

Argentina unveils new 2,000-peso bill as inflation bites

Milei's radical ideas for Argentina's economy

Argentina has for decades been plagued by financial chaos and weak economic growth which opposition candidate Javier Milei says is the result of successive left-leaning governments and their failed socialist economic policy.

"Those who have led us into inflation and poverty are now trying to instigate fear [among the population]. Argentina was a world power at the end of the 19th century, then came the decline under the socialist governments," Milei said this week at a campaign event in Rosario in the province of Santa Fe.

He's repeatedly accused his center-left rival of running a fear campaign that would denounce him as an ultra-right hardliner who would seek to undo basic rights and democracy in Argentina. In his campaign, Milei is styling himself as the defender of the country against populism as he aims to "reduce privileges, not rights."

Milei has attracted a lot of attention for his promises to radically overhaul the Argentine government and economy with a plan to eliminate the nation's central bank and replace its currency with the US dollar. He wants to significantly reduce the state apparatus, lift laws and regulations on the economy, and privatize state services. Other controversial proposals from his camp include liberalizing organ trade and privatizing Argentina's territorial waters.

With his radical free-market orthodoxy, Milei hopes to spur economic growth and subsequently lift more Argentines out of widespread poverty.

Massa's gentler economic reforms for Argentina

Sergio Massa is a veteran of Argentine politics and the new leader of the Peronist political movement which is based on the left-wing ideas of former President Juan Peron, who ruled Argentina several times between the 1940s and 1970s. The so-called Peronists have won nine of the last 12 free and fair presidential elections.

Massa has replaced Alberto Fernandez as the Peronist frontrunner after the hapless president voluntarily resigned in April this year. He was the winner of the first round of voting in October after making a surprise comeback from poor pre-election polls capturing nearly 37% of the vote, compared with 30% for Milei.

Massa, who has led Argentina's economy for more than a year, pushed through several policies in support of his candidacy, including programs that return sales tax to certain workers and eliminate income tax for others. He has promised to maintain some economic policies that conservative economists criticize, such as large subsidies for Argentines' energy costs.

In addition, he hopes to generate enough tax and trade surpluses to help negotiations with the International Monetary Fund (IMF) on restructuring Argentina's massive debt.

Argentina's untapped economic potential

Argentina has much to offer to the rest of the world but has yet to leverage it for the benefit of the entire population. This includes large lithium deposits crucial for the transition to e-mobility, as well as offshore oil reserves and abundant natural gas reserves. Moreover, it has the potential to produce green hydrogen, its farming sector is competitive, and the country has a young, well-educated population.

"The biggest challenge for the next government is to develop an initial stabilization plan and then push through a series of structural reforms to profoundly change the economic system," Agustin Etchebarne, director of the Libertad y Progreso Foundation in Buenos Aires, told DW.

Etchebarne is part of a group of economists who condone radical structural changes to the economy to lift Argentina out of its current crisis. Others, including about 100 renowned international economic experts, are more skeptical.

In an open letter recently, some high-profile economists the likes of Thomas Piketty from France, Jayati Ghosh from India, and the former Finance Minister of Colombia, Jose Antonio Ocampo, have warned Milei's proposals are "full of risks that could potentially be very harmful to the Argentine economy and the Argentine people."

This article was originally written in German.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Title:

Content: Argentina’s Javier Milei Attempts To Turn Back the ‘Pink Tide’

Election Sunday could elevate a radical libertarian, free marketeer, and advocate of sound money to the presidency of the country whose name means money.

It’s too soon to say whether tomorrow the arch-libertarian Javier Milei will be able to convert his place from leading contender to become Argentina’s president-elect. There might have to be a runoff. It’s not too soon, though, to savor the prospect of a free marketeer and sound money advocate acceding to the Pink House. Particularly in the land that spawned Perónism and whose name — Argentina —  means money.

The anarcho-capitalist is campaigning with a chainsaw, vowing to upend Argentina’s establishment, which he describes as a “political caste” of “useless parasites.” It’s “no time for nice words and good manners,” he avers, noting that, as the Wall Street Journal reports, “the caste is trembling.” The anger, if strident, is understandable, with Perónism, a leftist hybrid of nationalism and statism, having ravaged the once-thriving Argentine economy.

Poverty stands at 40 percent in a country that once vied with America as a contender for economic superpower status. Inflation is running at a catastrophic 138 percent, devastating Argentines’ buying power and driving a black market in dollars. No wonder Mr. Milei wants to ditch the country’s debased peso, which he calls “a currency emitted by Argentine politicians” that isn’t even “worth excrement,” because the pesos can’t be used as fertilizer.

The real path toward restoring sound money in Argentina would be to restore a peso convertible into gold or silver, as opposed to merely adopting a fiat dollar. Yet Mr. Milei’s proposed “dollarization” — making the greenback Argentina’s sole legal tender — is something of a step in the right direction. It would mark a sea change for a country that has been notorious for its lax monetary and fiscal policies after it abandoned its gold standard.

That was in 1929. Since then, Argentina’s currency has fallen in tandem with the country’s economic prospects. As the 20th century began, both America and Argentina “were young, dynamic nations with fertile farmlands and confident exporters,” journalist and historian Alan Beattie has observed, and “Argentina was among the 10 richest economies in the world.” Emigrants fleeing Europe were often torn, he noted: “Buenos Aires or New York?”

Argentina’s prospects dimmed during the Great Depression. Instead of following America’s path by embracing global trade, Argentina fell prey to the siren song of Perónism. This regime of corporate cronyism and big government, as economist Lawrence Reed explains, “expanded the power of labor unions, spent lavishly on welfare schemes and waged class warfare against the rich,” and drove Argentina’s economy into the ditch.

One of the most insidious aspects of Perónism is how it inverted the formula of “negative rights.” These are enshrined in America’s Constitution to protect against the predations of the government, as seen in, say, the First Amendment, which opens by saying “Congress shall make no law . . .” By contrast, Eva Perón justified the socialist takeover of the economy and a bloated welfare state by saying “Where there’s a need, there’s a right.”

Mr. Milei is, in the Financial Times’ telling, running on a platform that is as far from Perónism as it gets, calling for “unfettered free markets,” free trade, and “giving primacy to private property and individual freedom.” The fact that he has named his dogs after economists like Milton Friedman, Robert Lucas, and Murray Rothbard suggests he has an awareness that political liberty is not possible without economic liberty.

Whether or not Mr. Milei wins the presidency in Sunday’s first round of voting, as he suggests is a possibility, or at all, his candidacy is a bright spot on a continent that has lately drifted toward the shoals of neo-Marxism. Observers call it a “pink tide.” The Argentines have the opportunity at the ballot box to buck this leftward trend, choosing sound money and individual liberty and putting their country on the path to prosperity it left decades ago.

© 2023 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

Sign in or  Create a free account

By continuing you agree to our Privacy Policy and Terms of Use

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Title:

Content: November 20, 2023

Finally, when the results of Argentina’s presidential election became clear on Monday (November 20, 2023), the result was not at all surprising. However, the margin of victory was definitely there, and it is nothing less than a political earthquake.

Fed up with seemingly perennial economic malaise, lurking annual inflation hovering around 143% and widespread poverty affecting 40% of the population, Argentines turned in large numbers to 53-year-old economist and right-wing outsider Javier Miley.

The man often described by his critics and opponents as “El Loco”, or the mad man, came to power by winning a record 56% of the public run-off vote against Sergio Massa, an outgoing government minister and leftist rival. , with 44. ,

He won 20 of the country’s 23 provinces. Even the country’s capital, Buenos Aires, gave him preference over his rival and in some provinces Milley got as much as 70% of the votes.

His economic policies, many of which may be too strange for some, will undoubtedly be scrutinized ahead of his inauguration on December 10, 2023. But Miley’s core mission of “kicking the Keynesians and collectivists” may be paying off. He.

In addition to pledging to cut bureaucracy (a favorite of his fan base), the president-elect has also promised to “blow up” the central bank to stop it from printing more money, which he says is Argentina’s Increasing uncontrolled inflation. To mark some of the things said on the campaign trail. He also wants to abandon the local currency – the peso – in favor of the US dollar.

Will El Loco compromise Argentina’s energy policy?

Miley has also promised to cut public spending and privatize state-owned companies, which has inevitably increased interest in the energy world. According to the International Energy Agency (IEA), Argentina has the world’s second largest reserves of shale gas and the fourth largest reserves of shale oil worldwide.

In 2022, Argentina produced 706,000 barrels (bpd) of oil and 308 tcf of natural gas in its Vaca Muerta shale formation. The flag bearers of Argentina’s hydrocarbon wealth are the state-owned oil companies YPF and Ensarsa.

More from ForbesHow billions of dollars of investment in AI are fueling innovation in the oil and gas sectorMore from ForbesScaling technology and will is key to ‘fast-tracking’ global energy transition

Miley confirmed his intention to privatize YPF in statements following his election victory. That caused New York-listed shares of YPF (NYSE: YPF) to jump 39% from Friday’s closing price of $10.78 to $15 on Monday (15:00 PM EDT).

However, Miley also told Argentinian broadcasters that before privatizing YPF, his administration would have to “reconstruct” it. The President-elect did not specify how long it would take or what kind of streamlining of operations and processes he had in mind. The market will undoubtedly pounce on them as the details emerge.

It appears that luck is also somewhat on the incoming President’s side. In a desperate attempt to curb crippling energy imports, his predecessor built pipeline infrastructure to monetize Vaca Muerta’s natural gas.

After an economically distressful and nearly 20-year long hiatus, energy exports have finally increased, including to neighboring Chile. In 2022, Argentina had an energy deficit of $5 billion and the current year is probably an exercise in balancing. But government data points to an energy surplus of $4 billion in 2024.

Depending on market direction, windfall profits could ultimately amount to $20 billion by 2030. Many people, perhaps including Miley herself, are hoping that Argentina’s energy exports will also help reduce the country’s overall trade deficit.

And the president-elect, who is proud to declare himself a climate skeptic, has also promised to free Argentina’s energy industry from red tape. This broad omnibus pledge appears to range from closing the country’s Ministry for the Environment and Sustainable Development to encouraging private sector investment in renewables, if there is a buyer.

There are also high hopes that efforts to explore for commercially viable oil and gas in the Falkland Islands – a British overseas territory 300 miles off Argentina’s southern coast, which Buenos Aires claims – could be more favorable and cordial. .

The two countries went to war over the islands in 1982, during the UK premiership of the “Iron Lady” Margaret Thatcher. A British expeditionary force recaptured the islands in June 1982, following a brief occupation by Buenos Aires following the Argentine invasion of the islands in April.

Successive leftist Argentine governments in recent decades have used the controversy for political gain, but Miley caused a political stir earlier this month by describing Thatcher as “one of humanity’s great leaders” in a televised debate. Created a stir.

While Miley, in line with many predecessors, still views Argentina’s sovereignty over the islands as “non-negotiable”, his tone is likely to be more cordial and could promote a gentler level of economic dialogue.

Don’t forget lithium

It is often said in politics that timing is everything and the broader energy complex also seems to be in Miley’s favor. According to the US Geological Survey, Argentina has the world’s second largest lithium reserves, estimated at 20 million tonnes.

Domestic production of the metal, vital to the world’s energy transition, is growing rapidly, and could reach 120,000 tonnes/year in 2024 (from current levels of about 60,000 tonnes/year). Miley’s encouragement of private sector investment could further up the game with about 40 projects under development in three active mines.

The only major detail in the energy policy actions is that Miley spent his entire presidential campaign attacking almost Argentina’s entire political class and politicians, especially those on the left.

But his party has very few seats in Argentina’s Congress. Despite her powerful mandate, Miley will now have to negotiate with the very people she attacked during the campaign to advance her agenda. This will not be easy. Although it is too early to say how this will all play out, there are solid grounds for cautious optimism.

Milei's economic policies may reduce the state's role and increase private sector activity in Argentina.

Title:

Content: The content originally appeared on: Al Jazeera – Latin America News

Argentines are voting in a presidential election that might see a far-right populist leader, who has vowed to overhaul the Latin American country’s ailing economy, emerge victorious.

Polling stations opened their doors at 8am local time (11:00 GMT) and are expected to accept voters until 6pm local time (21:00 GMT), with results to come by late Monday.

During Sunday’s ballot, voters are also selecting members of the Congress and provincial governors, specifically 130 lower house representatives and 24 national senators.

Decades of economic decline and record inflation have propelled libertarian outsider Javier Milei, the 52-year-old far-right populist leader of the Liberty Advances party, to the front of a tight race.

The eccentric economist and first-year lawmaker, who has described himself as an “anarcho-capitalist”, had emerged as an unexpected frontrunner in the August primary election.

Milei has been compared to controversial leaders like Donald Trump in the United States and Jair Bolsonaro in Brazil, and has been winning support among some Argentinians by promoting radical policy changes.

Voters are angry at traditional parties for failing to address the Latin American nation’s ailing economy for decades.

Milei has mostly focused on the economy, which experts agree is perhaps the most severe challenge facing Argentina right now, with inflation standing at a whopping 138 percent in September and only expected to grow by the end of the year.

To fix the economic issues, Milei has proposed eliminating the central bank, replacing the local currency with the US dollar as Ecuador and El Salvador have done, and slashing public spending.

He has also promised cultural reforms as he has presented himself as an opponent of socialism at home and abroad, and is a staunch critic of abortion, which he has described as “murder” even though it was legalised by the country’s Congress in 2020.

Milei’s main rivals are Patricia Bullrich, a 67-year-old former security minister who is the candidate for the centre-right Together for Change coalition, and Sergio Massa, the 51-year-old incumbent economy minister who represents the governing Peronist coalition.

To win the presidential election, a candidate must secure 45 percent of the vote, or 40 percent plus a 10-point lead over their closest competitor.

Pre-election polls give Milei the best chance of winning, but they have proven notoriously unreliable in past elections.

So, it is possible that there will be two winners, which would force a second round of voting in November.

A new president and vice president are expected to take office on December 10.

suspended 366 decrees to ease economic controls and reduce spending.

Privatization and reduced subsidies may worsen public services, poverty, and inequality, especially for vulnerable groups.

Title:

Content: Javier Milei is elected president of Argentina.
Libertarian Javier Milei, who won the presidency of Argentina on Sunday, promised a radical overhaul to address decades of policy mismanagement, but his radical and bold ideas also raised doubts.
According to the official electoral body, after Sunday ’ s runoff, 99% of the votes were counted, and Milei received 56% of the votes, beating the 44% of the votes of Sergio Massa, the current economy minister.
The number of votes he won was unexpected, and Massa conceded the defeat before the results were announced.
Speaking to Argentines on Sunday night, Milei said his victory marked the beginning of "the reconstruction of Argentina."
“Today Argentina ’ s decline is beginning to end, ” he said.
“Today, the pattern of poverty in a country that is everywhere is over, one that benefits only a part of the population, while the majority suffers. ”
In the capital, Buenos Aires, hundreds of Milei ’ s supporters honked their horns, set off fireworks and sang his popular song against the political elite, “Get them all off! ”.
Milei ’ s main campaign promises include abandoning the peso and switching to the dollar and shutting down the central bank, while slashing public spending in an attempt to get the country of 46 million people out of trouble.
However, Milei ’ s shock therapy could also set Argentina on an uncertain path, with some economists warning that dollarizing the $622 billion economy while international reserves run out could plunge the South American country into another round of hyperinflation.
At the same time, IMF officials called on the next administration to restart the economy quickly, stressing that there was no time for progressive policies.
Argentina last week released its latest October inflation figures, which rose more than 140% a year to a 32-year high.
Milei will take office on December 10.
Related Posts

How will Milei's reforms impact workers?

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

Title:

Content: Javier Milei against democracy

Argentines must be patient since Javier Milei can only rely on them, not on all those supposed representatives of the people.

The Argentine president suffered a setback again after the Senate rejected the mega-decree to deregulate the country. However, for the package aimed at removing the suffocating state bureaucracy to be effectively rejected, it would also have to be rejected by the Chamber of Deputies.

As expected, the libertarian targeted the senators who voted against the decree, who were not only Peronists of various currents but also some radicals.

"Let the political class decide which side of history they want to be on," said the president. He added that it is an attempt to undermine the so-called May Pact, an agreement that Javier Milei seeks to reach with the governors of the provinces and the mayor of the city of Buenos Aires so that economic freedom reigns in Argentina instead of socialism, which has destroyed the country's economy and isolated it from the world.

Milei knew that rectifying the economy would not be a walk in the park since, although he is president, his party does not have a governor, a mayor, or a majority in any chamber. This is all amid a tough but necessary adjustment to settle the country's accounts and allow it to grow again. Therefore, if it had not been for the support of the citizens, it would surely have fallen by now.

The president, a complete outsider, must have a "political waist" to reach consensus. That is, he must enter the thick, contaminated and cumbersome mud of Argentine democracy in order to implement his plan.

But who makes up this democracy that they ask so much to respect? With whom do they ask you to reach a consensus? Well, with the same ones who have trampled on the constitution, the forms, the division of powers, etc. Those who went for everything without respecting absolutely anything today whiningly ask to be taken into account when making decisions. However, if any of the measures are effectively unconstitutional, it is not something that a legislator should decide since that is what the Supreme Court is for, right?

Javier Milei has to fight against all who make up this democracy, go through the impassable swamp that the Argentine bureaucracy represents, and that many need him to continue, even if that means hyperinflation, misery, unemployment, crime, etc. We could say that the ideal slogan for socialism would be "the worse, the better." In this way, they have the perfect excuse to intervene in the economy and in the lives of everyone in order to maintain the power and business of politics. That is, they want a country of militants, not workers. A country of officials who "love" the poor but not enough to lift them out of poverty. A country where resentment is more important than self-improvement,  where restrictions are more important than freedom and crime is justified and success demonized.

In the government, there is now an honest man who makes mistakes, whose ways are, at times, questionable, but who sincerely wants to fix the country. Who is a great economist and was able to predict with impressive success all the disasters that were coming to Argentina in previous administrations. Who has enough courage to confront the interventionist dinosaurs who seek to repeat failure, using democracy or the constitution as an excuse when it suits them, despite the fact that the majority of the supposed representatives of the people are the same ones who stand in the way of the president carrying out the changes that the majority of Argentines voted for. What democracy are they talking about?

Javier Milei, with his mistakes and successes, is on the side of the free world at a global level. He is cleansing the State of wasteful militants, reducing spending and stopping emissions. He is trying to repeal laws that have been resounding failures while being mercilessly attacked by the press, by opposition politicians who are actually coup plotters, by artists and leftist militants who only seek to continue parasitizing.

Argentines must understand that if the economic improvement takes longer than desired, it is because the dinosaurs that make up this democracy are muddying the playing field, so progress cannot be made, and they have to go back.

Argentines must be patient since Milei can only rely on them, not on all those supposed representatives of the people. The solution may take a while, but don't let it fail. This government is the last hope for Argentina. Do not miss such an opportunity, which may occur only once in history.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

Title:

Content: Argentine President Pledges Economic Reform in a Passionate Speech to Congress | Deutsche Welle Introduces Germany | DW | 02.03.2024
1.
Inhalt
2.
Navigation
3.
Weitere Inhalte
4.
Metanavigation
5.
Suche
6.
Choose from 30 Languages
The political climate of the times
Argentine President vows to push for economic reform
In a speech to the National Assembly on Friday, Argentina's new president, Miguel Millay, vowed to continue to push for economic reform, whether or not he has the support of the National Assembly.
He said that if the economic model is not transformed, "Argentina has no future."
Milley told lawmakers he would continue to push through reforms with or without congressional support.
Argentina ’ s new liberal president, Javier Milei, delivered a passionate speech to Congress on Friday (March 1).
He said he "will continue to push" for economic reform.
The Argentine leader, who describes himself as an "anarcho-capitalist," promised to slash state spending and reduce the government's fiscal deficit.
“We ’ re going to completely change this country. ”
Millet told lawmakers that he would continue to push ahead with reforms, whether or not he had the support of Congress.
He said "we will not back down, we will continue to move forward...
Whether it is through laws, presidential decrees or amending regulations, "he added," We will change this country forever...
with or without the support of political leaders, with or without all the legal resources of the executive branch ".
"I ask for patience and trust... It will take a while for us to see the results of the economic restructuring and the reforms that are being implemented," he added.
If the economic model does not change, "Argentina has no future"
Millay said he would introduce a bill that would penalize anyone — including the president — who financed the deficit by issuing additional money.
When he takes office, Mile will devalue the peso by about half.
"If we don't fundamentally change the economic model, then Argentina has no future," he said.
How will Argentina choose between China and the EU?
Milley's speech was repeatedly interrupted by cheers from supporters, who told Congress they would face "another animal" if they opposed his reform efforts.
Miley's Shock Therapy
After taking office in December last year, Millet issued decrees repealing or amending hundreds of laws aimed at curtailing the power of trade unions and deregulating state interference in the economy.
However, his claims met with resistance, and the court issued a ruling halting these measures.
Miller proposed a comprehensive reform plan, seeking to privatize state-owned entities and weaken labor protection.
The bill was voted down by lawmakers last month.
It includes the power to delegate to the executive branch for one year and the power to pass laws by decree on the basis of "economic emergencies".
Millet ’ s shock economic measures boosted the market, but sparked nationwide protests and strong opposition from labor unions.
Trade unions say the reforms will hurt the poor.
Despite his harsh words to lawmakers, the Argentine president struck a more conciliatory tone in his interactions with governors, proposing a 10-point “social contract ” agreed by May 25 that includes a“ rediscussion ” of the current tax distribution between the federal government and provincial governors.
Mire and the provincial governors have also been at loggerheads over the issue of funding cuts.
This week, when the governor threatened to cut off energy supplies to the rest of Argentina due to a funding dispute, the dispute heated up.
(Reuters, Associated Press, Agence France-Presse)
© 2024 Deutsche Welle Copyright Notice: All content in this article is protected by copyright law and may not be used without special permission from Deutsche Welle.
Any misconduct will lead to recovery and criminal prosecution.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Title:

Content: Streets of Argentina Ablaze with Dissent as Milei’s Controversial Reforms Ignite Outrage

In a stunning turn of events, Argentina has become a battleground for public discontent following President Javier Milei’s introduction of a series of controversial proposals. Thousands of Argentinians have taken to the streets, enraged by the president’s push for drastic cuts to public spending.

Milei’s latest measures, unveiled on Wednesday evening, aim to revolutionize Argentina’s struggling economy through a variety of initiatives. These include deregulating the government and opening up state-run industries for privatization in order to spur both exports and investment.

However, the people’s outrage has manifested in widespread protests, often met with a heavy police presence. Gathering in front of the Argentine Congress, hundreds of demonstrators made their opposition to Milei’s proposals known.

Undeterred by the dissent, Milei appeared on national television to defend his agenda and offer reassurances of a prosperous future. He asserted, “Our objective is to rebuild our nation, restore individual freedom and autonomy, and dismantle the myriad of regulations that have impeded our economic growth for far too long.”

Acknowledging the mounting protests, Milei’s security minister, Patricia Bullrich, announced new measures aimed at maintaining public order. These measures grant federal forces the power to disperse protesters blocking streets without requiring a judicial order, and authorize the police to use video or digital evidence to identify and hold accountable those obstructing public thoroughfares. Moreover, the legislation empowers the state to apportion the costs of mobilizing security forces to the protesters themselves.

Milei’s presidential victory was built upon a campaign centered around reducing public spending. Since assuming office, he has already made significant changes to the country’s financial landscape. The value of the Argentinian currency has been adjusted, contracts of public employees with less than one year of service have been terminated, and the prices of basic services and public transportation have seen notable increases.

FAQ:

Q: What are President Milei’s proposals?

A: President Milei’s proposals include deregulating the government and allowing the privatization of state-run industries to boost exports and investment.

Q: Why are Argentinians protesting?

A: Thousands of Argentinians are protesting against Milei’s proposals due to their belief that the drastic cuts to public spending will adversely impact their lives.

Q: How is the government responding to the protests?

A: In response to the protests, the government has announced new measures to maintain public order, empowering federal forces to disperse protesters without a judicial order and enabling the identification of those obstructing public thoroughfares through video or digital means.

Q: What changes has Milei already implemented?

A: Since taking office, Milei has adjusted the value of the Argentinian currency, terminated contracts of public employees with less than one year of service, and increased the prices of basic services and public transportation.

(Sources: Information gathered from local news outlets)

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Title:

Content: Argentina’s New Libertarian President, Javier Milei, Is on a Collision Course With His Country’s Powerful Labor Unions

Unions have promised a ‘total strike’ across the country Wednesday to protest Mr. Milei’s efforts to rein in a once-powerful central government and put Argentina on a path to prosperity.

Argentina’s new Libertarian president, Javier Milei, is on a collision course with his country’s powerful labor unions, a conflict that will come to a head Wednesday when the unions have promised a nationwide “total strike” to protest austerity measures enacted by Mr. Milei since he took office last month.

Union leaders speaking to the Financial Times say they expect as many as 200,000 people to take to the streets of Buenos Aires because the new president is “breaking the social contract” by passing an emergency decree that rolled back worker protections, deregulated many industries and began allowing employees to opt out of union-provided health care.

Around 40 percent of the country’s 13 million workers belong to labor unions that have for decades enjoyed considerable political clout under successive governments headed by leaders of the Peronist movement launched by strongman Juan Peron in the 1950s. That power evaporated overnight when Mr. Milei moved into the Casa Rosada, Argentina’s equivalent of the White House, on December 10.

The leader of Argentina’s Construction Workers Union, Gerardo Martínez, told the Financial Times that he hopes the strike —the earliest ever faced by a newly elected president — will force Mr. Milei to roll back some of his reforms and come to the bargaining table with the unions.

“We are aware that inflation [needs to come down.] We are embarrassed to have a country with this level of poverty,” Mr. Martínez said. “But we can’t accept that the cost of reaching economic stability falls solely on the backs of workers and the middle class.”

The tousle-headed Mr. Milei, who famously brandished a chainsaw during the campaign while promising to slash government spending and eliminate entire departments, has made good on some of those promises early in his tenure. He has slashed energy and transport subsidies and sent a bill to Congress that would privatize many of Argentina’s poorly managed state-run enterprises.

Mr. Milei already has backtracked on other issues, however, in an effort to secure the support of moderates in Congress, including taking off the table a plan to privatize the state-run oil giant, YPF.

While perhaps not exactly enamored by some of his fellow countrymen, Mr. Milei has become the darling of international free-marketeers since his full-throated defense of capitalism and the power of entrepreneurship to lift countries out of poverty during the annual World Economic Forum at Davos last week.

In a speech that has since been translated into dozens of languages, Mr. Milei stunned the normally left-leaning audience at Davos by blaming the decades of economic malaise that has plagued Argentina on the “collectivist” policies of his predecessors. Government, he said, is not the solution to what ails societies. Government is the problem, he said.

“The case of Argentina is an empirical demonstration that no matter how rich you may be, how much you may have in terms of natural resources, how skilled your population may be, how educated, or how many bars of gold you may have in the central bank — if measures are adopted that hinder the free functioning of markets, competition, price systems, trade and ownership of private property, the only possible fate is poverty,” he said.

As much as 40 percent of Argentina’s population is described as living in poverty, and inflation is currently running at a rate of 211 percent annually, the highest rate in 32 years. In Latin America, only Venezuela faces worse inflation than Argentina.

© 2024 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

Sign in or  Create a free account

By continuing you agree to our Privacy Policy and Terms of Use

Title:

Content: 'No obstacle' to Argentina mega reform bill in Congress, government says

By Walter Bianchi

BUENOS AIRES (Reuters) - Argentina's government said on Tuesday that it was confident its sprawling economic reform bill, known as the "omnibus bill", would gain approval in Congress after it made concessions removing some divisive sections from the legislation.

The bill is a central plank in libertarian President Javier Milei's aims to overhaul the South American country's economy that is buckling under high debt loads, inflation running at over 200% and myriad capital controls to protect the peso.

"There should now be no obstacle for the law to be approved," presidential spokesman Manuel Adorni said in a daily press conference on Tuesday. "As we understand it is going to get approved, with the first half of that this week."

Milei took office in December after a divisive campaign in which he pledged a "chainsaw" plan to slash back the size of the state and cut spending with an austerity drive he argues is necessary to put the country's finances back on a firm footing.

That has gone down well with markets and investors, including major creditor the International Monetary Fund (IMF), though he has warned of tough months ahead for regular Argentines with a likely economic contraction this year.

The omnibus bill - a major part of Milei's reform plan - is expected to be debated in the lower house of Congress on Wednesday after the government yanked the key fiscal section following opposition to tax hikes and pension reforms.

While marking a significant concession by the government -- which still intends to push those fiscal plans separately -- the move was seen as likely to help avoid the bill failing in Congress where Milei only has minority support.

That helped the S&P Merval stock index edge up 1% on Tuesday, with sovereign bonds very slightly up on average.

The government still faces a major challenge to meet pledges for a zero deficit this year, while turning around an expected economic contraction estimated by the IMF at 2.8%.

"As soon as reality and the situation allows it, of course we are going to reverse this drop," Adorni added.

In popular parallel currency markets, used to get around strict capital controls and where people pay a large premium for dollars, the exchange rate was over 1,200 pesos per dollar on Tuesday, well away from the 826 peso controlled official rate.

In futures markets dollars were trading at 1,273 pesos by the end of June, reflecting expectations of a sharp slide.

(Reporting by Walter Bianchi; Editing by Adam Jourdan and Alison Williams)

Advertisement

Title:

Content: Argentina markets edge lower after Milei's key reform bill diluted

Credit: REUTERS/AGUSTIN MARCARIAN

By Walter Bianchi

BUENOS AIRES, Jan 29 (Reuters) - Argentina's bond, currency and stock markets edged lower on Monday, though they avoided a sharp slide after the government was forced to pull a key fiscal section from its major "omnibus" bill aimed at reforming the country's embattled economy.

The South American country's libertarian President Javier Milei agreed on Friday to yank changes to taxation and pensions from the mammoth bill that is working its way through Congress, where the government's minority bloc faces stern opposition.

That should make passing the bill easier, but it also removes key reforms aimed at cutting spending and boosting state revenues to help meet a zero-deficit target this year as the government looks to trim high debts and bring down inflation that is running above 200%.

"We consider that with the exclusion of the fiscal package it is more likely Congress will approve the 'Omnibus Law'," Portfolio Personal Investments said in a note, adding that the hit to markets should be limited as long as the bill moved ahead.

"We would hope that there are no major points of conflict and that it can be approved quickly. Otherwise, it will be a very bad sign for markets."

Argentina's S&P Merval stock index .MERV was down more than 1% on Monday, led by energy and financial sectors, while sovereign bonds also slid around 1.1% on average. The peso currency in parallel markets widely used to access dollars also edged lower.

"The attention this week will remain on the politics, as the extraordinary sessions in Congress move ahead and with the expectation of possible announcements," local settlement and clearing agent Puente wrote.

Congress is set to discuss the omnibus bill on Tuesday.

Milei took office in January pledging to revive the country from its worst economic crises in decades with tough austerity and cost-cutting measures, but he faces a major challenge from opposition lawmakers and street protests.

(Reporting by Adam Jourdan; Editing by Paul Simao)

((adam.jourdan@thomsonreuters.com; +54 1155446882; Reuters Messaging: adam.jourdan.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.

Title:

Content: BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Argentina’s Javier Milei Is Looking To Bluff His Political Rivals

Following
Click to save this article.
You'll be asked to sign into your Forbes account.
Got it

And just like that, Argentina’s ultra-libertarian president, Javier Milei, sent the whole socio-political-economic ecosystem into disarray

Praised for his moderation and pragmatism during the first few weeks of his presidency, the self-proclaimed anarcho-capitalist has now put in place a series of controversial measures which have divided public opinion, generating a new iteration of Argentina’s infamous “grieta,” our very own version of the polarization that has now become the norm across the so-called ‘Western World.’ But, it’s no longer about the antagonism between Kirchnerites and their opponents, mainly represented by Mauricio Macri and the Juntos por el Cambio coalition, but about those blindly in favor of the wild-haired economist and those denouncing his every move as a diabolic, anti-democratic part of a ferocious plan to tear down the tenets of Argentine society.

Both sides seem to agree that he is executing a carefully crafted plan that will either elevate Argentina back to the lost status of “global power” of the late 19th century or ravage the nation in order put it on the chopping-block and conduct a fire sale to hand over the crown jewels to global financial elites. Those with access to the Casa Rosada tell a different story though, one of amateurism and incomplete staffing that would suggest the La Libertad Avanza coalition is acting more out of necessity than Machiavellian genius.

Milei finally broke out of his honeymoon period with those who didn’t vote for him after launching a massive package of reforms through a “decreto de necesidad y urgencia,” an emergency decree (DNU) which has become the standard practice for presidents seeking to bypass Congress and is generally used for less ambitious projects. The DNU is truly massive, with 366 articles including the repeal of multiple laws which call into question the constitutionality of the measure, even if governing via DNU is already contrary to the spirit of the Constitution and something that has happened in each of the last several administrations. It was quickly followed by the Omnibus law, equally as massive in its scope and ambition, and its capacitiy to divide the political field.

Put together by liberal economist Federico Sturzenegger, who ran the Central Bank under Macri and helds no role in the Milei-Villaruel administration until after the project was presented, the “mega-decree” was announced by national (and obligatory) broadcast several weeks in a dramatic scene that had Milei as the protagonist in the foreground and his whole team standing behind, statue-like, as the president read sternly.

Earlier that day they had scored a political victory with Security Minister Patricia Bullrich’s “anti-picket” protocol making its debut, effectively diluting the first public protest against the government. Some reports indicated there was more security than 'piquetero' protesters. Weeks later, the General Confederation of Labor united the pan-Peronist opposition in a massive march that managed to remain cordial, respecting Bullrich's protocol by trying to show political muscle in the streets.

The reform package conformed by DNU and Omnibus bill immediately generated the reaction of Milei's political opponents, along with a substantial portion of the population who took to the streets for a traditional “cacerolazo,” a protests with pots and pans reminiscent of the worst days of the 2001 crisis. There are no coincidences. Congressional leaders from the pan-Peronist Unión por la Patria coalition spoke with union strongmen from the General Confederation of Labor (CGT) umbrella union group. Members of the Unión Cívica Radical (UCR) warned of unconstitutionality and specialist lawyers indicated Milei was trampling all over the Constitution by failing to respect the separation of powers. Buenos Aires Province governor Axel Kicillof, probably the leading member of the Peronist opposition, and his government decided to ignore Bullrich’s “anti-picket” protocol claiming it violated the constitutional right to protest. A few weeks before, Economy Minister Luis ‘Toto’ Caputo unveiled the government’s initial economic plan, generating a similar reaction in the political field which didn’t seem to make its way to the general population. The situation is beginning to change and as the actual implications of the Milei administration’s actions make an impact, social and political actors will begin to respond.

There should be few doubts that one of the strongest points of La Libertad Avanza’s electoral strategy had to do with communications, particularly on social media. These early moves suggest they will try and double down, betting on the use of their skills to try and compensate for the lack of political support, despite a strong victory over both Sergio Massa and the Peronists, and Bullrich and Juntos por el Cambio. Toto Caputo, however, is known to be particularly uncomfortable with the media. His pre-recorded message several weeks ago announcing tough economic measures — many of which contradicted Milei’s campaign promises, particularly tax hikes — was delayed several times reportedly due to the need for multiple takes and Milei’s direct involvement (or maybe indirectly through sister Karina). The second measure he announced, for example, was a year-long reduction of government advertising to zero – a direct strike to the beleaguered media industry and a measure that has practically zero impact on the deficit but high popular approval. The over-dramatization of the security operation to contain a moderate-to-small protest early into the presidency, together with pictures of Milei and Bullrich supervising from police headquarters, allowed them to take advantage of the far-left Partido Obrero to score an easy win and show his electorate that they can control the streets. Yet, controlling a couple of thousand protesters is one thing. The CGT protest that brought together the political and social power of the unions remained under control, and that's a win for the government, but it was a political protest. If the middle class begins to lose its temper, and expectations, Milei could face a much more difficult scenario.

The “basis for the reconstruction of the Argentine economy” reform package could be another attempt to win the communications game and take the spotlight to appear active in the eyes of the public opinion. With absolute minorities in both chambers of Congress and several controversial reforms included in a massive package passed by Milei’s mega-DNU, it's difficult to imagine that it will quickly pass in the Chamber of Deputies, despite an early win at the commission level with the help of the former Juntos por el Cambio coalition. Furthermore, several interest groups are putting together legal arguments to dispute the issue in court, especially the labor reform which has been stayed. It could quickly make its way to a Supreme Court that has already proven eager to interject politically.

Ultimately, most, if not all, of the regulations, laws, and measures included in the decree will have to make their way through Congress and will therefore be subject to negotiations and amendments. Yet, Milei has shown initiative and wants to maintain, or extend, the popular support which took him to victory in the run-off and has already generated a circumstantial majority in the Senate to defeat the Peronist caucus and at the commissions to get the Omnibus bill past the first obstacle.

There are risks that the ultra-libertarian could prove authoritarian and anti-democratic. He’s shown some of that in the past, particularly by claiming he would govern by plebiscite if he didn’t have the support of Congress (something Hugo Chávez did to amend the Venezuelan constitution) and by picking a dictatorship denialist as his running-mate. Many of his detractors have pointed to signs that suggest Argentina could descend into a state of totalitarianism, and this emergency decree fuels their suspicion.

It’s not clear whether the conditions for such a situation are in place. For now, he seems to be bluffing his political opponents. We’ll see if someone calls his hand.

This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.

Follow me on Twitter

How will Milei's reforms impact workers?

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

Title:

Content: Skip to Content

In initial victory for Argentine President Milei, Senate gives overall approval to key reform bills

By ISABEL DEBRE
Associated Press

BUENOS AIRES, Argentina (AP) — Argentina’s Senate has approved key state overhaul and tax bills proposed by President Javier Miliei, delivering an initial legislative victory to the libertarian leader in his efforts to deliver on his promises of radical change.

Senators voted 37 to 36 late Wednesday to give their overall approval to the overhaul bill after 11 hours of heated debate as protesters urging lawmakers to reject Milei’s harsh austerity clashed with police outside Congress. The lawmakers still must approve individual measures in an article-by-article vote that will stretch throughout the night.

In a reflection of the fierce backlash to the legislation and deep polarization gripping Argentina’s Congress, Vice President and head of the Senate Victoria Villarruel cast the tiebreaking vote in favor of Milei’s agenda.

The legislation delegates broad powers to the president in energy, pensions, security and other areas and includes several measures seen as controversial, including a generous incentive scheme for foreign investors, tax amnesty for those with undeclared assets and plans to privatize some of Argentina’s state-owned firms.

If the Senate approves the articles with modifications, the lower house still has to okay them before Milei can claim passing his first law since entering office last December.

As Senators pored over the bills, protesters in downtown Buenos Aires hurled sticks, stones and Molotov cocktails at police who fired water cannons and tear gas to disperse the crowds.

The fiery right-wing economist rose to power on promises he would resolve Argentina’s worst economic crisis in two decades, with annual inflation climbing toward 300% and a recession deepening.

But his political party of relative novices holds just a tiny minority of seats in Congress and he has struggled to strike deals with the opposition.

Senators approved two bills, a tax package that lowers the income tax threshold and a 238-article state reform bill that passed the lower house of Congress in late April after weeks of negotiations.

Initially dubbed the “omnibus bill” because of its more than 600 articles, the watered-down version at hand still delegates broad legislative powers to the president in energy, pensions, security and other areas.

The proposal’s immense scope — and staunch opposition to it — has limited progress.

“We have the weakest president we’ve ever seen who is trying to pass the biggest bill we’ve ever seen,” said Ana Iparraguirre, an Argentina-based analyst at Washington strategy firm GBAO. “That’s the contradiction.”

Unlike previous Argentine leaders since the return of democracy in 1983, Milei has failed to pass a single piece of legislation during his first six months in office. Instead, the populist outsider has relied on executive powers to slash state spending and sweep away economic restrictions.

“Today, it’s almost more important for Milei to demonstrate that he can pass laws in Congress than what he passes,” said Lucas Romero, director of Synopsis consultancy.

The package has faced tough resistance from the left-leaning Peronist movement loyal to former president Cristina Fernández de Kirchner, which has dominated Argentine politics for the last two decades and holds sway over the country’s powerful trade unions.

Thousands of bankers, teachers, truckers and workers from a range of other unions converged around Congress throughout the day, banging drums, blasting trumpets and chanting, “Our country is not for sale!” and “We will defend the state!”

“If this law passes, we are going to lose so many of our labor and pension rights,” said 54-year-old teacher Miriam Rajovitcher protesting alongside her colleagues, middle-class Argentines who say they’ve had to reconfigure their lives since Milei slashed their school budgets and devalued the currency, sending inflation soaring. “I am so much wor0se off.

The rally took a tense turn when hundreds of riot officers pushed back with their shields against angry protesters trying to surge through a barrier.

Police used pepper spray, water cannons and tear gas against the huge crowds while demonstrators set two overturned cars ablaze and threw Molotov cocktails.

Dozens of protesters were being treated by medics in the streets and police said 20 officers had been injured in the clashes. At least five Peronist lawmakers said they were hospitalized after police sprayed pepper spray in their eyes.

“Today the government is declaring war on the Argentine people,” Peronist lawmaker Cecilia Moreau told reporters outside Congress.

The presidency called protesters “terrorists” and accused them of “attempting to carry out a coup d’état” by disrupting Congress.

The Peronist bloc controls 33 out of 72 seats in the Senate while Milei’s party, Freedom Advances, holds just seven seats. The bill needed 37 votes from the 72 total legislators in the Senate to get a majority and ended up with a 36-36 tie.

Analysts say that foreign investors and the International Monetary Fund, to which Argentina owes a staggering $44 billion, are closely watching Wednesday’s vote to see whether Milei can build consensus with his opponents to deliver on his ambitions.

Wednesday’s article-by-article vote will stretch for hours, with analysts expecting lawmakers to further weaken the most divisive sections of the bills.

One of the most contested measures is an incentive program to spur foreign investments that offers lucrative tax breaks for 30 years, no import tariffs and other perks for big corporations that critics say go too far.

“What this law is hurting most are the pockets of workers, not the big companies that are just going to get richer,” said 36-year-old Juan Barreto, a bank employee jostling amid crowds of his fellow union members.

Argentina’s unions have also voiced vehement opposition to measures that would make it easier for companies to fire employees as well as plans to privatize some state-owned companies. The question of which ones will head to auction has generated intense debate.

Backlash to the tax bill has centered on an amnesty that would allow Argentines to register undeclared assets at home and abroad without paying heavy taxes, as well as a lower income tax threshold to boost revenue.

Frustrated by legislative resistance, the president has moderated his previous all-or-nothing approach. Earlier this month, in a bid to break the impasse, Milei fired his politically inexperienced Cabinet chief and replaced him with Interior Minister Guillermo Francos, a career politician skilled at congressional wheeling and dealing.

In recent weeks, Argentina has gotten a taste of what awaits if Congress fails to pass the bills.

Sovereign bonds have tumbled. The country’s currency, the peso, has depreciated as well, widening the gap between the official and black market exchange rate to nearly 40%. The peso was trading at 1,255 per greenback on the informal market Wednesday, a rate far lower than earlier this year.

Even as the IMF has praised Milei’s agenda and released tranches of frozen loans, the fund has held back from striking a new deal with Argentina.

Meanwhile, Milei has been in Silicon Valley rubbing shoulders with billionaire tech executives Elon Musk, Tim Cook and Mark Zuckerberg. The meetings however, have not produced any announcements of substantial investments.

“What you’re seeing in the last three weeks is the market and investors getting a little nervous,” said Marcelo J. García, Americas director at geopolitical risk firm Horizon Engage. “The market is saying, ‘Show me that you can govern.’”

Article Topic Follows: News

Jump to comments ↓

Associated Press

BE PART OF THE CONVERSATION

News Channel 3 is committed to providing a forum for civil and constructive conversation.

Please keep your comments respectful and relevant. You can review our Community Guidelines by clicking here

If you would like to share a story idea, please submit it here.

Skip to content

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

Title:

Content: Argentina’s Javier Milei’s “Instant Democracy” and Neoliberalism

Javier Milei, YouTube screen grab.

Self-described “anarcho-capitalist,” Javier Milei became the president of Argentina in December 2023 promising “drastic” measures to temper the inflation crisis that has gripped the country. In the weeks since his election, Milei has brought forward an ambitious neoliberal restructuring program encompassing almost every aspect of the government.

Milei’s agenda confronts considerable opposition in Congress, where his governing coalition, Libertad Avanza, holds only a fraction of the seats. To adjust to these circumstances, Milei has cultivated a strategy of “turbo-politics,” bypassing legislative processes that risk delaying the implementation of his state reorganization plans.

Milei’s approach to Congress is symbolic of a decades-old strategy I have elsewhere called “neoliberal parliamentarism.” This concept describes a pattern of deliberate efforts to reform or subvert legislative institutions as a means of facilitating neoliberal reforms that do not have sufficient popular support to be actualized through usual democratic channels. These changes, even when temporary, often leave long-term scars on institutions by weakening norms of institutional forbearance.

The Emergency Decree and the Omnibus Bill

Milei has followed this blueprint, insulating the core elements of his agenda from democratic influence. The dismantling of the Argentine state began in earnest in mid-December when the executive branch presented an 83 page Necessity and Urgency Decree (NDU) aimed at repealing over 300 various laws and regulations, facilitating the privatization of core public assets.

This “mega-decree,” Milei claimed, was necessary to “start to undo the huge number of regulations that have held back and prevented economic growth”. It includes sweeping economic deregulation, such as the elimination of regulations on Argentina’s supermarket laws, which required the guarantee of low prices on basic products. It also includes measures to eliminate rent controls. Suggested labour reforms to cut pregnancy leave and increase the job probation period were suspended by the courts in January 2024.

Less than a week after issuing the NDU, the executive branch sent a massive omnibus bill titled Foundations and Starting Points for the Freedom of the Argentine People to Congress for consideration. The bill bundles the major elements of Milei’s neoliberal restructuring initiatives under the heading of a single piece of legislation with 664 articles. It will enable the government to carry out, in a matter of weeks, what would normally take years to achieve if these reforms were considered independently and subjected to the usual legislative scrutiny.

Reforms from the 351 page bill include an extraordinary provision declaring a state of public emergency on matters related to the economy, fiscal balance, social security, defence, health, and administration.

The emergency declaration delegates more than 1,000 extraordinary powers from the legislative to the executive until December 31, 2025, with the possibility of a two-year extension. This provision would enable Milei to make major reforms without having to consult Congress, thus eliminating a major hurdle to the implementation of neoliberal reforms.

Authors of the bill are attempting to facilitate the privatization of 41 state-owned companies across various sectors including energy, aviation, port administration, and agriculture. They also enable the reorganization of public administration, including embedding regulatory cuts from the NDU into law.

Additionally, the omnibus legislation proposes substantial reforms to environmental protection laws. These changes include the weakening of the Glacier Protection Law, allowing the mining of sensitive “periglacial” areas. The bill is presently being rushed through the legislative process by way of Extraordinary sessions of Congress, leading to marathon sittings during Argentina’s usual summer recess period.

“It’s impossible for people to have an idea of the enormous number of proposals Milei has sent,” said Ricardo Gil Laverda, a constitutional lawyer and former Argentine Justice Minister. “They cover dozens and dozens and dozens of laws, often on deep topics.”

To influence negotiations, Milei has threatened to put forward a non-binding referendum if the opposition parties do not agree to the main terms of his restructuring plan. Milei has also threatened to take away social welfare rights from protesters who block streets.

Despite these efforts, however, the reality of Milei’s lack of Congressional support has led him to compromise on some elements of his agenda as it makes its way through the legislative process. Although the structure of the bill remains, opposition politicians have made more than 100 changes to it, including curtailing the scope of the President’s emergency powers to one year rather than two, and retaining YPF, the national oil and gas company, in public hands, despite allowing most other state-owned companies to remain subject to privatization.

Neoliberalism and the Decline of the Legislature

Argentina is not unique. This most recent example of legislative subversion is a familiar tactic used to accommodate neoliberal restructuring, that has been utilized repeatedly by neoliberal reformers in recent decades, including the IMF-sanctioned omnibus bill rammed through Greece’s parliament in 2014.

This approach to the legislature is the consequence of the political limitations of neoliberal policy, which is opposed by considerable segments of society. A blueprint for this strategy is spelled out by former New Zealand Minister of Finance Roger Douglas in his 1993 book, Unfinished Business. The book recalls lessons from his experience implementing a neoliberal agenda dubbed ‘Rogernomics’ in the 1980s against the headwinds of widespread social and political opposition.

Douglas claimed it is “uncertainty, not speed, that endangers the success of structural reform programmes.” Neoliberal reforms should not be passed incrementally, but as a rupture, moving in “quantum leaps” to overcome popular opposition.

Democratic processes are typically slow and deliberate, designed to enable the legislative body to scrutinize the executive, foster compromise, and encourage debate. It was necessary, therefore, to streamline the democratic process to ensure that politicians could neither interfere with, nor demand meaningful changes to, neoliberal reorganization efforts.

Neoliberal governments should confront the legislature, not as an essential element of the process of democracy, but an instrument used by politicians and vested interests to interfere with the operations of the marketplace. “Speed is essential. It is almost impossible to go too fast,” Douglas said. “Once the programme begins to be implemented, don’t stop until you have completed it.”

This tactic did not occur in a vacuum, but emerged intrinsically from the content of a neoliberal theoretical framework that views democratic institutions as an additional layer of state administration to be overcome. Neoliberal thought is deeply skeptical in the capabilities of reason to infer or predict causality. Given the limitations of the mind, society should be governed, not by conscious modelling and careful planning, but according to spontaneous or “invisible hand” forms of social organization, which are the outcome of independent, unplanned individual decisions.

This position is most clearly expressed by Friedrich Hayek, who claimed that parliamentary sovereignty was in fact the “root of the evil” in modern society, since it facilitated the growth of the state. Legislatures constituted one limb of what Milton Friedman called the “iron triangle” of politicians, bureaucrats, as well as corporate and individual special interests that were perpetually reliant upon the government for rents, and therefore had an interest in obstructing market reforms.

‘Instant Democracy’ and the Rise of ‘Neoliberal Populism’

What should we make of Milei’s approach to Congress, then? Is it reflective of a new pattern in neoliberal governance, or merely the extension of an old one? The answer is both. While Milei’s approach clearly shares categorial similarities with the neoliberal legislative blueprint built for speed, his blending of these ideas with a coarse, populist rhetoric grounded in anti-statism, signifies an intensification of these patterns.

Milei’s populist neoliberal worldview contributes to a rising trend among far-right governments around the world to use this rhetoric to rationalize the subversion of democracy. This kind of “neoliberal populism” conflates democratic institutions with political actors, claiming that they are instruments of obstruction for self-serving politicians and bureaucrats.

This is a view Milei has proudly declared. “For me, the state is an enemy, as are the politicians who live off it,” he said. “We will put an end to the parasitic, stupid, useless political caste that is sinking this country.”

Grounded in the same logic as neoliberalism’s conventional demand for freedom from the state, democratic institutions increasingly appear as impediments to the logic of the marketplace. The elimination of cumbersome legislative processes, then, removes the obstacles that restrain market forces, generating popular economic independence, and restoring common-sense. This inverts the logic of democracy, making it appear as though executive rule is necessary to protect the interests of “the People” from Friedman’s “iron triangle.”

The anti-parliamentarism at the core of the neoliberal theoretical outlook has increasingly transformed into a populist program that mobilizes a general dissatisfaction with politicians against democratic institutions as such. Neoliberal politicians, such as Milei, use this reasoning to manufacture the conditions for the ongoing use of emergency powers and the concentration of authority in the executive branch.

The global elite, sensing “the smell of a big privatization wave coming,” are said to be “infatuated” with his take-no-prisoners approach to Congress. Thus, although not a new phenomenon, Milei’s brand of “instant democracy,” which conceives of speed and flexibility as the essence of legislative governance, has the support of both the financial elite as well as a growing populist dimension, giving it the hallmarks of a burgeoning political movement of the most regressive kind.

As the institutional forbearance that restrained most neoliberal governments to stay within the confines of liberal democratic constitutional structures continues to give way to a logic that sees the legislature as subordinate to the market, it is likely that we will continue to see the erosion of democratic standards.

Tom McDowell is a Lecturer in the Department of Politics and Public Administration at Toronto Metropolitan University. He is the author of Neoliberal Parliamentarism: The Decline of Parliament at the Ontario Legislature (University of Toronto Press, 2021).

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Title:

Content: This website uses relevant technologies to provide a better reading experience, while respecting the privacy of users. Click here to understand the privacy statement of the Central News Agency. When you close this window, you agree to the above regulations.
Your browser does not appear to support Traditional Chinese.
Would you like to go to CNA ’ s English website, “Focus Taiwan ”?
Koko Koko Koko Koko Koko Koko
"日本語版「フィーカス」について" (in Japanese).
Central News First-hand News APP
Download
Argentina ’ s economic reform bill sent back to congressional committee for review
2024 / 2 / 7 16: 13
Please agree to our privacy policy in order to enable news listening.
Please agree to our privacy policy in order to enable news listening.
Argentina ’ s liberal president Javier Milei ’ s party said today that a major economic reform package proposed by Milei would be sent back to a parliamentary committee for review, symbolizing a major setback for the bill.
After the lower house of parliament voted last week to approve the so-called “omnibus ” proposal, many of the bill ’ s provisions were vetoed by lawmakers during an article by article review.
The bill, which has been substantially amended by members of Congress, still includes provisions allowing for the privatization of state entities, changes to hundreds of regulations, and measures to reduce state subsidies.
Mirei won the two-man presidential runoff last November with about 56 percent of the vote, but the party ’ s congressional candidates did poorly in the previous round.
Because of his party ’ s relative weakness in parliament, Mirei has sought the support of lawmakers from the main conservative coalition, Juntos por el Cambio.
Mirei ’ s ruling Libertad Avanza, which has just 38 seats in the 257-seat lower house of parliament, today slammed lawmakers who opposed the bill on social media X, saying they committed treason, but admitted the bill must now be sent back to the committee for review.
Later today, Mr. Miley took to social media to criticize lawmakers who blocked the reform package, calling them part of a political “hereditary bloc ” that has made the country sick.
"We don't want to negotiate a bill with the people who destroy this country," Mirei wrote on social media X during a diplomatic visit to Israel.
Argentina is in dire economic straits with an inflation rate of more than 200%, a situation that Mirei blamed on excessive spending by previous governments, especially those led by the center-left Peronist Party.
Some opposition lawmakers today called for a compromise among his colleagues who supported Mirei.
"We implore the ruling party to show some flexibility," Miguel Pichetto, an opposition lawmaker, said during a session of parliament.
The bill must be passed by the lower house before it can be sent to the Senate for final legislative review, with Mirey holding only seven seats in the 72-seat Senate.
Central News Agency "First-hand News" app
The text, pictures and audio and video of this website shall not be reproduced, broadcast or transmitted or used without authorization.
172.30.142.223

Milei's economic reforms will succeed if they balance growth with worker and vulnerable group protections and equitable benefit distribution.

Title:

Content: Argentina's Senate in Deadlock: Economic Reform Bill Ignites Protests

Argentina's Senate is deeply divided as it debates President Javier Milei's economic reform bill aimed at privatizing state entities and boosting investment. Protests erupted outside Congress, leading to clashes with police. The bill requires 37 votes to pass the Senate, with a tie possibly broken by the vice president.

Reuters | Updated: 13-06-2024 04:50 IST | Created: 13-06-2024 04:50 IST

Argentina's Senate began debating a sprawling bill on Wednesday that is key to libertarian President Javier Milei's economic reform plans, while protesters set fires and clashed with police in the streets outside Congress. The upper house, which is divided almost down the middle over the bill, which is designed to boost investment by privatizing state entities and providing incentives for businesses, is set for a marathon debate. The bill passed the lower house of deputies in April following many changes after it was rejected in a first vote in February.

Milei's government, which controls only a minority of seats in both chambers, has been bargaining to win over allies. It knows the bill will be modified, but is hoping to at least get general approval. Outright rejection would be a major blow. Local legislators and media outlets estimated that senators were evenly split. The bill needs 37 votes out of the 72 total legislators in the chamber to get a majority.

"It is a very even vote: it's 36 and 36," Guadalupe Tagliaferri, a conservative lawmaker from the government-allied Together for Change, told reporters. She said the vote could come down to the vice president, who presides over the Senate, to break the tie. The main left-leaning Peronist opposition bloc, closely allied to the unions, is likely to vote down what is known as the "bases" bill and a separate fiscal package. The main bill includes plans for privatizing public firms, granting special powers to the president and spurring investment.

"Argentine people's lives are at play. We've drunk this poison several times: to have zero inflation with zero economic activity," protester and social leader Luis D'Elia said as thousands protested the planned reforms. "This poison has failed several times in Argentina and we won't allow this to carry on."

Reuters footage from the streets of Buenos Aires showed a car set on fire, with scattered protesters throwing rocks and bottles, while police with riot gear used tear gas, water hoses and rubber bullets. Milei's office issued a statement congratulating the security forces for holding back "terrorist groups" armed with sticks and grenades who "tried to perpetrate a coup d'etat." It did not provide further evidence.

'CHANGE ARGENTINA' Milei, a brash economist and former pundit who has clashed with lawmakers and regularly called Congress a "nest of rats," has tied a lot to the bill. His government says it is key to undoing a major economic crisis that it inherited.

"We are going to change Argentina. We'll make a liberal Argentina," Milei said on Wednesday, adding that if his reforms didn't get through Congress now he'd try again in 2025. A government official speaking on condition of anonymity said that they expected the bill to get general approval in the Senate, but would be "more altered than we would like". If it is approved with changes it will go back to the lower house.

"If the Bases law is passed, it accelerates the growth process, mainly by getting investment into the country. If it is not passed, we keeping going, though perhaps more slowly," the person said. Argentina has annual inflation near 300%, myriad capital controls that stymie business and trade, depleted foreign currency reserves and a high debt load that needs servicing. The economy is in recession and poverty is rising.

The Senate debate is expected to continue late on Wednesday, with voting potentially set to take place in the evening. "They are going to have to buy popcorn," La Libertad Avanza Senator Francisco Paoltroni told local channel C5N. "It is going to be a long night of trying to break the deadlock."

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback

Milei's economic policies may reduce the state's role and increase private sector activity in Argentina.

Title:

Content: Argentina sees the light with Maverick Javier Milei – Ivo Vegter

In a surprising turn, libertarian firebrand Javier Milei secured Argentina’s presidency after a second-round victory against his left-wing rival. Vowing to end decades of socialist mismanagement, Milei, an outspoken economist, faces challenges in implementing radical reforms, including abolishing ministries and dollarising the economy. While hailed as the world’s first libertarian president, Milei’s uphill battle involves legislative opposition and managing economic pain amid promises of a freer, market-oriented Argentina. Skepticism remains, awaiting the true impact of his ambitious plans in a nation grappling with deep-rooted economic struggles.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Argentinians see the light

By Ivo Vegter*

It took a second round of voting, but the libertarian Javier Milei has defeated his Peronist rival to become president of Argentina.

A month ago, Javier Milei unexpectedly lost the first round of the Argentinian general election to his left-wing Peronist rival, Sergio Massa, after the latter had cynically promised zero taxes as a way to bribe voters.

In my column on the lessons South Africa could draw from that election, I said: ‘Let’s hope Argentinians see the light before Massa and Milei face off in the run-off election.’

Happily, they did see the light.

After decades of economic malaise under a government that for most of the last 30 years has been socialist, corrupt, wasteful and incompetent, leaving Argentina eighth from last in the Fraser Institute’s Economic Freedom of the World Report 2023, they elected Milei, a libertarian firebrand, in the biggest landslide since Juan Perón’s election in 1973.

Milei becomes the first libertarian president, not only of Argentina, but in the world. The closest precedent that comes to mind is that of Calvin Coolidge, the small-government conservative president during the Roaring Twenties in the US, but Milei is far more radical than that.

‘“oday the reconstruction of Argentina begins’, he said, after winning 56% of the vote in the head-to-head race. That was also his first lie as president-elect, since he doesn’t actually take office until 10 December, but we’ll let that slide.

Radical

To describe Milei as radical would be putting it mildly. He has described the country’s ruling elite as thieves and the government as ‘a criminal organisation’. He has promised to abolish ten of the government’s 18 ministries. He said he would do away with the central bank and dollarise the Argentinian economy.

‘The model of decadence has come to an end’, he told his supporters. ‘There’s no going back. We have monumental problems ahead. Inflation, lack of work, and poverty’.

Milei is an accomplished economist, and largely follows the Austrian School of individualist free-market economics. He has variously described himself as an anarcho-capitalist and a minarchist (an anarchist who accepts the legitimacy of a small government dedicated to protecting life, liberty and property).

He has been extraordinarily outspoken on the evils of socialism and statism, and how they turned Argentina from a once-wealthy world power into an over-indebted, poverty-stricken, underdeveloped basket case.

Mainstream media

The mainstream media, with its largely left-leaning bias, has compared Milei to former presidents Donald Trump of the US and Jair Bolsonaro of Brazil.

‘Argentina set for sharp right turn as Trump-like radical wins presidency’, trumpeted the Washington Post

‘Argentina Elects Javier Milei in Victory for Far Right’ was the headline in the New York Times, which added: ‘Argentina’s next president is a libertarian economist whose brash style and embrace of conspiracy theories has parallels with those of Donald J. Trump.’

The ‘embrace of conspiracy theories’ is a particularly vicious jab. Readers would have to follow a link to find an explanation, and it turns out that the Times only referred to Milei’s allegations of polling irregularities, which have not been tested.

It is entirely plausible that Argentina’s electoral system is less secure than that of the United States, and that the incumbents – who went as far as abolishing taxes in order to engineer a win – might have been involved in some electoral skulduggery.

Allegations of election fraud are very common on all sides of the political spectrum, and do not, in and of themselves, rise to the level of the debunked claims of Trump, and his attempt to derail the orderly election of his rival.

Authoritarians

More importantly, both Bolsonaro and Trump are alt-right populists. They are moral authoritarians – not liberals – and appeal to collectivist – not individualist – principles such as nationalism and protectionism. They have often, rightly, been described as fascist, which is just as antithetical to libertarians as is left-wing socialism.

That both former presidents expressed their support for Milei has a lot more to do with shared anti-socialist positions than any real congruence in their political philosophy.

Milei has himself rejected the right-wing label, and indeed, his classical liberalism (for which ‘libertarian’ in the American sense is a synonym) does not yield to a simplistic left-right analysis. Rather, it falls on the liberal end of an authoritarian-liberal scale, and on the progressive end of a conservative-progressive scale.

Sour-grape-ish

Milei does have some views that are questionable, or traditionally associated with the conservative right, such as his anti-abortion stance and his rejection of climate alarmism.

Neither define him, however, and both are issues on which libertarians can and do disagree.

By similar logic, Milei’s promise not to dismantle Argentina’s extensive social welfare programmes does not make him some sort of left-winger.

In focusing on incidental agreements between Milei and leaders like Trump and Bolsonaro, and ignoring the fundamental philosophical differences between the former’s individualist, free-market, small-government ideas and the authoritarianism, nationalism, populism and protectionism of the latter, the media does both Milei and their readers a great disservice.

That a politician does not perfectly reflect all one’s personal political or moral views is in any case far less of a concern when that very politician proposes as far as possible to keep government out of people’s personal affairs and to leave most of the world’s problems to the private sector.

‘When your response to everything that is wrong with the world is to say, “There ought to be a law,” you are saying that you hold freedom very cheap’, said Thomas Sowell.

Moreover, it seems extraordinarily petty and sour-grape-ish to complain about a few differences of opinion with a candidate who promises radical change in a country that is mired in economic crisis, thanks to the policies of its incumbent rulers.

Music to the ears

Sniping from the mainstream press aside, the rise of a truly libertarian president in one of the world’s most economically unfree countries should be music to a classical liberal’s ears.

Who doesn’t want to radically slash the size of government? Who doesn’t question the inflationary monetary policy of highly indebted countries? Who doesn’t want to see free enterprise flourish, and witness the departure of a government that strangles business with red tape and taxes, and tries to pick winners by throwing subsidies at favoured companies?

On the face of it, this should be an excellent experiment to show whether the libertarian prescriptions for government do, indeed, produce a better outcome than the socialist quagmire in which Argentina has been stuck for so long.

Pain and gain

Practically speaking, however, there are reasons to remain skeptical.

First, we’ve only seen Milei’s talk, and not his walk.

Second, making drastic changes in the structure of a country’s government and economy, as Milei proposes, will be painful.

It is arguable that the short-term pain is justified by the long-term gain, but electorates are rarely forgiving to those who inflict necessary pain. Witness Margaret Thatcher, who saved Britain from the socialist economic malaise of the 1970s, but remains hated to this day by those who bore the brunt of her reforms.

Dollarising an economy does not produce immediate results, for example. It can take years before the stabilising effect of dollarisation filters through to low inflation rates. It can, however, immediately harm people and even increase poverty levels, depending on the exchange rate at which existing deposits are converted.

Drastically reducing the size of government will also face much immediate opposition, especially from civil servants who stand to lose their jobs.

Privatising healthcare, education or other government functions is also fraught with transition difficulties. Much depends on exactly how such privatisation is carried out. It can fail, and even if the eventual outcome is a success, it could cause years of disruptions and dissatisfaction.

Then there are the entrenched patronage networks of the incumbent socialist government, who will be highly upset – and fight back vigorously – when the taps of corrupt fiscal spending get turned off.

Finally, few voters have the patience to wait five or ten years for radical free-market reforms to have a positive impact, and Argentina’s president only serves a four-year term before facing the electorate again.

Legislative opposition

A further obstacle to Milei’s reforms is that he will not be the philosopher-king of every libertarian’s dreams. He will not be a dictator.

He will simply be the head of the executive in a constitutional parliamentary democracy, with strictly circumscribed powers.

And the elections did not result in a similar landslide in the legislature.

Argentina has a 72-seat Senate, or upper house, and a 257-seat Chamber of Deputies, or lower house. Together, they make up the Argentinian National Congress.

In both houses, Milei’s libertarian coalition, Liberty Advances (La Libertad Avanza, or LLA) took more seats from the conservative coalition, Together for Change (Juntos por el Cambio, or JxC), than from the socialist Peronista coalition, Union for the Homeland (Unión por la Patria, or UxP).

In the Senate, this leaves the Peronistas as the largest coalition, with 32 seats. It would need 37 seats to command an outright majority. The conservative coalition, JxC, retains only 27 seats. As the third-largest party in the Senate, Milei’s LLA only has six seats, which even in coalition with the conservatives is not enough for an outright majority.

In the lower house, the picture is similar. UxP has 104 out of 257 seats, JxC has 93, and LLA has 38. The only difference is that here, a JxC and LLA coalition can command a simple majority.

This leaves Milei at the mercy first of the conservatives, who would welcome market-oriented reforms and a departure from socialism, but by their very nature would be reluctant to endorse Milei’s more radical, disruptive proposals. Once Milei has cleared that hurdle, he needs to gather a majority in the upper house, which will be even harder.

Argentina is also heavily indebted, including to the International Monetary Fund, and creditors are likely to have a say in how the country is run. Anything that scares them will raise the cost of credit, which Argentina can ill afford.

Wait and see

Once the initial euphoria of seeing a true libertarian in power has cleared, then, we are left with the sobering realisation that Milei may not be able to achieve anywhere near as much as he has promised.

Turning failing countries around is not for the faint-hearted, and it always comes with social upheaval and economic pain.

Even if Milei gets the good ship Argentina pointed in the right direction again, the prevailing winds and currents may still dash it – and its captain – upon the rocks.

Read also:

*Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets.

This article was first published by Daily Friend and is republished with permission

Visited 57 times, 57 visit(s) today

suspended 366 decrees to ease economic controls and reduce spending.

Privatization and reduced subsidies may worsen public services, poverty, and inequality, especially for vulnerable groups.

Title:

Content: (Bloomberg) -- Argentina’s labor movement is testing popular support for President Javier Milei’s austerity blitz in a national strike less than two months into his presidency.

Thousands of Argentines flooded the streets and avenues surrounding congress during a mass protest Wednesday in Buenos Aires organized by the CGT, one of the South American nation’s oldest and most powerful union groups. The events of the day will help set the tenor of debate as the libertarian economist attempts to slash the size of the state in a bid to tame triple-digit inflation. A key vote on part of that agenda was postponed by lawmakers until next week.

The government projected a sense of calm from afar. “Some thousands striking, some millions working,” presidential spokesman Manuel Adorni tweeted, while Milei — from his official residence in the outskirts of the capital — posted a chart showing money in circulation and the central bank’s liabilities. Security Minister Patricia Bullrich was set to meet with the president later Wednesday about the security response, with her office estimating there were only 40,000 strikers in the street.

Protesters concentrated around Avenida de Mayo and cut off the city’s widest avenue, 9 de Julio, despite strict measures against street blockades Bullrich announced in December. The crowd gathered to watch the principal union leaders deliver a brief address in the early afternoon and began to disperse afterward. In attendance were various Peronist political leaders, including Buenos Aires Governor Axel Kicillof, and members of the country’s biggest unions carrying flags and playing drums.

“They devalued and tripled prices for food, gas, and now they tell us there won’t be pension raises,” Hector Daer, the umbrella labor group’s secretary general, told the protesters. “That’s why we are telling members of congress to act in line with their popular mandate.”

Truckers union leader Pablo Moyano sent a sterner message to Economy Minister Luis Caputo, who is helming the government’s aggressive spending cuts: “If he continues with these measures, Minister Caputo will be thrown to the Riachuelo,” a famous Buenos Aires river.

Moyano later backtracked on his comment, calling it a metaphor. Referencing the initial statement, Caputo said on social media that he hopes the justice system gets involved.

After taking office in December, Milei issued a decree deregulating vast swaths of the economy and sent a sweeping package of free-market reforms to congress. He unfroze prices for thousands of everyday products and is advancing steadily on the removal of generous electric, gas and transport subsidies, amid annual inflation hurtling beyond 211%. While the CGT successfully challenged labor provisions of the decree in court, a vote on the so-called omnibus bill is headed for the floor of the lower house.

Milei has stuck to the bombastic rhetoric of his campaign but also taken a pragmatic turn by withdrawing a proposal to privatize state-owned oil company YPF SA from his package of legislative reforms. The bill’s passage will be crucial for his government to meet targets laid out by the International Monetary Fund in its latest review of Argentina’s $44 billion aid program, the multilateral lender’s largest.

“Depending on how many people they mobilize, the union will be able to demonstrate how much weight it carries at the negotiating table,” political analyst Raul Timerman said in an interview. “If the protest is massive, lawmakers will have a harder time voting in favor of the government. But if the protest fails, it will make clear Milei still counts on the support of the population.”

How the authorities respond to the protest, the earliest strike ever called after a presidential inauguration in Argentina, will also be telling. In addition to the pre-emptive measures Bullrich announced in December, the Adorni said last week workers who participate in the strike would be docked a day’s pay.

Work stoppages began at noon and are set to last through midnight, while public transport is scheduled to run through the late afternoon in order to facilitate access to the demonstrations, although demonstrations blocked bus lanes in some parts of the city and TV reports showed some subway stations closures in the early afternoon. The protests are being led by unions representing truckers, sanitation, construction and gas station workers.

The strike has already disrupted transportation. Airlines including Gol Linhas Aereas SA, Aerolineas Argentinas SA and JetSmart have announced cancellations or delays for Argentina flights, while shippers including Agencia Maritima Nabsa SA told clients the protests will affect port operations.

Milei’s party holds just 15% of the lower house and 10% of the senate, while the Peronist movement it defeated and its left-wing allies have just under half of votes in each chamber. The libertarians are counting on the support of the main pro-business opposition bloc founded by former President Mauricio Macri and more moderate members of two other parties to push through their reforms.

The strike could tilt political will in Milei’s favor if it unites a fractured political group pushing for change, according to political scientist Gustavo Marangoni.

“Ultimately, politics boils down to rivalries,” said Marangoni, director of M&R Asociados in Buenos Aires. “The government will say to the different factions, ‘We may have our differences, but we are against the Argentina that today took to the streets.’”

--With assistance from Daniel Carvalho.

(Updates with comments made at protest by union leaders, street blocks)

©2024 Bloomberg L.P.

How will Milei's reforms impact workers?

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

Title:

Content: World News
Argentina's biggest trade union calls for strike
Argentina ’ s largest labor union called on Thursday for a general strike to protest economic reforms announced by ultra-liberal President Javier Mili.
General Secretary of the General Union of Workers Hector Dyer said the strike, scheduled for January 24, was in protest against a decree and a package of bills proposed by Milley that would give the president "all public powers".
Milley took office on Dec. 10 and took steps to deliver on his campaign promise to cut public spending and radically change an economy that is collapsing under the weight of 160 percent annual inflation.
Extraordinary session
Argentina's Congress is holding an extraordinary session this week to consider a package of bills to give effect to the decree, which was unveiled last week and will go into effect on Friday if lawmakers do not reject it.
The decree would change or repeal more than 350 economic regulations in a country accustomed to heavy government intervention in the market.
Javier Milley also submitted to Congress this week a package of legal amendments that would allow the privatization of more than 40 public companies and limit the right to assemble and demonstrate, among other things.
In the face of mounting protests, Mili ’ s government warned protesters that they would bear the costs of securing the demonstrations.
Thousands of demonstrators on Wednesday called on the judiciary to intervene to overturn the decree, which they say would undermine workers' and consumers' rights.
Advertisements
You may also read.

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

Title:

Content: Argentina's President Saves Economy, 5,000 Government Employees Don't Continue Inflation, People Crash
International Center Tsai Sha-ling / General Report
Javier Milei, a far-right liberal economist known as “Trump Argentina, ” announced a“ shock therapy ” after his election as Argentina ’ s president to rescue a serious economic crisis with drastic fiscal reforms, insisting that it is normal for things to get worse until concrete results are achieved, calling on people to survive the inflationary boom, and adding to a series of reforms, including the layoffs of more than 5,000 government posts, means that Thousands of government employees will not be rehired.
This is an advertisement, please continue reading.
Speaking to supporters, Mirei declared that he was “unwinding the suffocating web of government control ” and changing a large number of regulations that are hindering economic growth, stressing:“ We have no choice, no time, no room for meaningless discussion. ”
Our country needs to take immediate action, "he said.
In order to reduce government spending, Mirei announced that he will not renew the contracts of government employees hired before he takes office in 2023, and that he will be sworn in as president on December 10 this year; employees hired before 2023 will not be affected for the time being, but the related contracts will also be reviewed.
The report pointed out that the 2023 as the demarcation point, apparently in response to the former president's proposed salary increase in the last year of his term.
With inflation expected to reach 200% by the end of the year, Mirei intends to accelerate measures, including privatization of state-owned companies, in the hope of boosting exports and investment, easing labor laws, reducing protections for employees, making it easier for companies to lay off workers, and banning state intervention in the rental housing market.
In addition, energy and transportation subsidies will also be cut, and some government departments will be abolished.
Whether Mirey ’ s shock therapy will save the economy is still unknown, but people have taken to the streets to protest against soaring prices.
Some economists believe that although such measures may be necessary to solve Argentina ’ s long-term financial problems, without an adequate safety net, the poorest people in society may struggle to survive and may not be able to survive until the country ’ s economy returns to normal.
This is an advertisement, please continue reading.

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Title:

Content: The content originally appeared on: Al Jazeera – Latin America News

Argentine unions have begun a 12-hour strike in the capital to protest against tough economic reforms by President Javier Milei.

Wednesday’s demonstration is the most significant show of opposition to Milei’s spending cuts and privatisation plans since he took office last month and pledged to fix an economy dealing with 211 percent inflation.

The strike, coordinated by the umbrella union, the General Confederation of Labour (CGT), comes amid scrutiny of Milei’s two significant reforms: the “omnibus” bill going through Congress and a “mega-decree” deregulating the economy.

“Milei wants a country where poverty and informal work reaches 90 percent,” union member and national opposition deputy Hugo Yasky said on local radio station Radio Con Vos.

“Now there is no job creation. What there is now is widespread misery, people’s desperation, there are no measures to mitigate the damage they are causing.”

Demonstrators hold a placard that reads ‘down with the decree’ as they protest near the Pueyrredon Bridge during a one-day national strike, in Buenos Aires, Argentina [Agustin Marcarian/Reuters]

Earlier on Wednesday, the omnibus bill was approved by a committee in the lower congressional house, the Chamber of Deputies.

The mass strikes began at 12pm (15:00 GMT) and affected transportation, banks, hospitals, and public services.

Local airlines said they had been forced to cancel hundreds of fights due to the demonstration.

Protesters held placards that read “The homeland is not for sale” and “Eating is not a privilege” as some others held a giant puppet of Milei.

Another poster said, “Today’s retirees are yesterday’s workers, stop robbing them!”

Al Jazeera’s Lucia Newman, reporting from Buenos Aires, said it was “impossible” to determine the number of people attending the protest due to its scale.

“There seems to be a kind of unofficial agreement with the strikers and the security minister to allow these huge numbers of people to be here but only if they cannot disrupt traffic,” Newman said.

“It’s still very, very tense, and it’s an ongoing situation here, but it’s a huge turnout so far.”

Milei’s government said that the austerity measures are due to years of overspending that have left the South American country with huge debts to local and international creditors, including a $44bn deal with the International Monetary Fund.

“There is no strike that stops us, there is no threat that intimidates us,” Milei’s security minister and former presidential election rival Patricia Bullrich wrote on X.

“It’s mafia unionists, poverty managers, complicit judges and corrupt politicians, all defending their privileges, resisting the change that society chose democratically.”

Milei, an economist and former TV pundit, assumed the presidency after a shock win in last year’s general election.

Milei's economic reforms will succeed if they balance growth with worker and social welfare.

Title:

Content: Argentina ’ s new president: More than 5,000 civil servants will be fired
Written by external sources (international)
Published: Updated:
On December 26, local time, the current President of Argentina, Javier Milei, announced that he will not renew his contract with government employees hired before his inauguration in 2023.
The new government estimates that more than 5,000 workers have been laid off.
The decision quickly sparked a new round of protests against its economic reforms.
Millet said the decree was part of a plan to fight Argentina ’ s poor economy and rampant inflation.
There are reports that Argentina ’ s inflation rate is expected to reach 200% by the end of the year.
Millay believes Argentina ’ s already struggling economy can be transformed by sweeping cuts in government spending and a currency devaluation program.
Under the decree, the authorities will review the contracts of government employees hired before January 1, 2023 within the next 90 days.
The January 1, 2023 deadline will be set in response to his predecessor ’ s actions to raise wages for government employees in his final year.
In addition, the layoffs are not targeted at all government employees, and according to the relevant regulations, civil servants in the Argentine government who have a statutory quota or are considered "indispensable" civil servants will be exempt from the layoffs.
Members of the Argentine construction trade union UOCRA take part in a demonstration against the economic reforms of Argentina ’ s new president, Mirai, near the Justice Palace in Buenos Aires, Argentina, on December 27, 2023. (Reuters)
According to estimates by the Argentine Civil Service Union, the number of national employees will be higher than the government's figures, and the final number of employees will be more than 7,000.
It is expected that this change will have some impact on the national government of Argentina.
According to the latest data from the Argentine Ministry of Labor, there are nearly 3.5 million employees in the public sector in Argentina, of which the federal government has 338,000 employees, about a tenth of the total.
According to a report by consulting firm Ieral-Fundación Mediterránea, 2.2% of Argentina ’ s GDP is used to pay wages to federal employees.
That share has been declining since 2015, when it reached 3.3%.
According to the report, the proportion of government employee wage expenditure in the budget is similar to that of Nordic countries as well as Japan and Germany.
The order is part of a series of decrees signed by Millet.
He has depreciated the Argentine peso by more than 50% against the US dollar, slashing transport and energy subsidies and abolishing or suspending 366 decrees to ease economic controls.
Millet believes that by implementing “shock therapy ”, Argentina has the ability to deal with growing poverty and ultimately solve Argentina ’ s hyperinflation problem.
Millet ’ s new dismissal order further provoked a strong reaction from opposition parties, trade unions and social organizations, triggering a further escalation of protests in Argentina.
Argentina ’ s new president, Javier Milei, waves to the crowd on the balcony of the Casa Rosada after attending the inauguration ceremony in Buenos Aires, Argentina, on December 10, 2023. (Reuters)
Thousands of union members and activists took to the streets of Buenos Aires, Argentina ’ s capital, on Wednesday to protest against the government ’ s economic and fiscal policies. Argentina ’ s civil service workers described the layoffs as “aggressive ” and said public officials were“ carrying out their indispensable tasks. ”
“Don ’ t expect us to accept even if only one person is fired, ” the union ’ s secretary-general, Aguiar, warned.
Argentine activists have previously expressed doubts about the legality of Millet's decree during protests: whether Millet can bypass the legislature, which has few seats for his party, and implement these economic reforms and layoffs in the form of emergency decrees.
According to the latest election results, although Millet won the presidential election, his Liberal Progressive Party now has only seven seats in the Senate (26 seats for the ruling coalition, out of 72) and 40 seats in the House of Representatives (114 seats for the ruling coalition, out of 257).
Members of the Workers' General Confederation and other social organizations attend a demonstration outside the Justice Palace in Buenos Aires, Argentina, on December 27, 2023, against the economic reforms of Argentina 's new President Javier Milei. (Reuters)
Reports indicate that more than six people have been detained in Buenos Aires as a result of the protests.
In response to the ongoing protests, Millet said he was prepared to hold a referendum if Argentina ’ s parliament ultimately rejects a package of urgent economic reforms that includes the dismissal of the 5,000 civil servants.
In the interview, Millet insisted that his decree was supported by 75 percent of Argentinian citizens, but he did not specify which polling agency he cited.
According to the report of the local Argentine media Página / 12, more than half of Argentine citizens (54.4%) did not support the relevant policies proposed by Millet in a public opinion poll on the 22nd.
This opposition caused his approval rating to drop by 6% to 54% in just 12 days after taking office.
This article is authorized by the Observer Network

Title:

Content: International
2024-06-13 16: 06: 58
Argentine parliament passes economic reform plan, sparks violence
Share:
Argentina ’ s President Javier Milei ’ s proposed economic reforms, which were passed by a narrow margin in Congress, have sparked clashes outside the parliament, with protesters saying the reforms hurt millions of Argentines and local media describing the scene as a “battlefield. ”
Millet, who was elected president last year, is a right-wing economist in Argentina who was elected president at a time of severe economic distress.
Argentina ’ s annual inflation is close to 300%, leaving more than half of Argentines in poverty.
Among the reforms proposed by Millet are declaring the country into an economic emergency, cutting pensions and diluting labor rights.
Left-wing political parties, trade unions, and social organizations opposed it.
The bill was tied with 36 votes in favor and 36 against, but the Speaker of the House, Vice President Victoria Villarruel, voted in favor.
“For all Argentines who are suffering, waiting and don ’ t want to see their children leaving their country, my vote is decisive.
The motion will be considered on a case-by-case basis and is expected to be passed on Thursday (13), after which it will be returned to the next House for final implementation.
The president said protesters were trying to stage a coup.
However, demonstrators outside the parliament shouted "the country is not sold, it is to be protected", and said: "Why does the head of state hate his own country?" According to local media, the local "battlefield", demonstrators threw gasoline bombs and stones at riot police officers, and some observers and opposition lawmakers said that about 10 people needed medical treatment at the scene of the demonstration, including at least five anti-opposition lawmakers.
Argentine police said at least 20 officers were injured and 15 were arrested.
Argentina ’ s presidential office issued a statement thanking the defense forces and describing the demonstrators as “terrorists trying to launch a coup. ”
“We are going to change Argentina and make it the freest country in the world, ” he said. After he came to power, he cut cabinet posts in half and cut 50,000 civil servants, halted new public works contracts and eliminated subsidies for fuel and transportation.
By accepting the following privacy policy and disclaimer, you agree to the privacy policy and disclaimer contained in am730.
LEARN MORE
Acceptance

Title:

Content: Global Economic News
Millie's attempts to liberalize Argentina's economy
366 rules changed, including privatization, housing and work
Demonstration in Argentina against the decree of President Javier Milli.
"E.B.A."
Last week, Argentina ’ s libertarian president, Javier Milley, issued a sweeping decree to change or abolish 366 economic rules in a country accustomed to heavy government intervention in the market.
The move is the first of its kind in Argentina ’ s history, as none of its democratically elected presidents has attempted such a massive dismantling of the system.
That ’ s exactly what Milley promised during his election campaign, waving a chainsaw to symbolize his attempt to cut public spending as Argentina struggles with three-figure inflation after decades of fiscal mismanagement.
However, according to Argentine law, Congress still has the power to flood Melli ’ s program.
Change of daily life
Ten days after taking office, and on the eve of the holidays, Milley presented his "necessary and urgent" decree to loosen some of the rules governing the country's economy, where annual inflation has reached 160 percent.
One big change will be the removal of all restrictions between tenant and landlord, such as laws on increasing rents.
In recent years, landlords have increasingly priced their properties in dollars to avoid falling into the rental income trap that has long been overtaken by rising inflation.
This was a nightmare for tenants in a country where access to the dollar was tightly controlled.
Melli ’ s plan also loosened labor laws, increasing the probation period for new employees from three to eight months.
Compensation for Groundless Dismissal Laws have been amended in the interest of companies, and plans are being made to renegotiate labor agreements in force since 1975.
He also lifted export restrictions and said the internet market would be liberalized.
Milley also abandoned rules preventing the privatization of government institutions, already setting his sights on the national airline and the oil company.
He also moved to limit the right to strike enshrined in the constitution.
Purpose of the decree
Milley, a figure whose rise to the country ’ s highest office surprised most observers, blames the interventionist and protectionist policies of previous governments for stifling the economy.
Before the decree was announced, the new government had already devalued the Argentine peso by more than 50 percent and announced massive cuts in generous government subsidies for fuel and transportation starting in January.
“The goal is to begin the process of rebuilding the country, restoring the freedom and independence of individuals and beginning to dismantle the vast amount of systems that have halted and hindered economic growth, ” Milley said.
One protester said: "There may be people with Stockholm syndrome.
They are fascinated by a model that impoverishes them. ”
The opposition, who was recently ousted from the government, criticized Milley for the decree, seeing it as a way to overcome his lack of a majority in Congress.
Miley Libertad Avanza, who is only two years old, has only 40 of the 257 seats in the House of Representatives and seven of the 72 seats in the Senate.
German Martinez, speaker of the parliament of the Peronist coalition, said: "Uniting for the homeland is not the right way.
They sent the reforms as bills.
“Don ’ t be afraid of democratic debate. ”
Constitutional lawyer Emiliano Vitaliani said the country's highest laws state that "in principle laws cannot be amended by decree and the president cannot replace Congress."
Political scientist Lara Guiboro said the resolution "crosses all boundaries and rules out many issues that need political agreements from Congress and the provinces."
Vitalini said the decree could be revoked if it was rejected by both houses of Congress.
Otherwise it will come into force on December 29.
Constitutional lawyer Alejandro Carrillo said in an article in the Lanacion newspaper that "the president has made a very big bet, and his success will depend on his ability to obtain legislative support that is not yet known."
It comes at a time when Argentina is stuck in the grip of an economic crisis with the highest inflation in 30 years.
Cecilia Rojas is searching every store in the vast city of Buenos Aires to find affordable gifts for her children for what is expected to be a bleak Christmas day this year as Argentina faces its worst economic crisis in decades.
Rojas, 47, said: “Before, I used to buy from a well-known toy chain, but now I ’ m looking at smaller stores nearby to find a better price.
Rojas, a psychologist, has two sons, one aged 17 and the other eight.
This year, they will each receive one gift, knowing that they have received many gifts in previous years. ”
Argentina ends the year with the highest inflation rate in the past 30 years, over 160 percent year-on-year.
The 50 percent devaluation of the peso, approved by the government of liberal President Javier Milley on Dec. 12 two days after taking office, has led to a new price spike in a country where more than 40 percent of the population is poor.
Games prices have risen by 110 to 230 percent this year, according to figures from the Argentine Chamber of Gaming Industry.
Thus, shoppers on Christmas Day should be patient and seasoned.
Ogostina Jago, a 23-year-old mother of four, said: "If you walk a little, you can find the same product in different stores at different prices."
"This year, we will buy him a gift thanks to the help we get from grandmothers and fortunately, there are many of them."
The country is also under the brunt of the radical measures of President Javier Mille ’ s new government, which has issued hundreds of decrees to revive the ailing economy.
Milley, who has pledged to cut government spending, also announced deep cuts in subsidies on fuel and the transport sector starting in January.
His government also scrapped a programme to control the prices of some goods introduced by the previous government to try to soften the impact of inflation.
Milley warned that the country was on the brink of hyperinflation and that things would get worse before they began to improve.
Alexandra Mazi, a 49-year-old schoolteacher who took part in a protest against the new measures, said: “They are starving people, using policies that have been applied in the past and have not worked, and all they are doing is impoverishing the working class. ”
Milley ’ s government has forced organizers of its first protest to pay tens of thousands of dollars to cover the cost of deploying security forces to protect it.
Euronews reported that thousands of people took part in a demonstration on Wednesday against Milley ’ s austerity measures and to commemorate the bloody 2001 protests that followed the country ’ s economic collapse.
Government spokesman Manuel Adorney said the cost of the massive deployment of police and riot police was 60 million pesos ($73,000 at the official exchange rate).
“The bill will be sent to social movements ” as they“ bear responsibility for the cost that should not be borne by citizens, ” he said.
Publish it.
More Economic News - Global

Title:

Content: Millie is facing the minefield of the economy, politics and society of Argentina
Argentina ’ s president-elect Javier Milley ’ s sweeping reform package overcame the first parliamentary hurdle, winning public approval on the third day of debate in the House of Representatives, while the initiative, which included economic, social and political areas, sparked strong protests from the opposition and the Argentine street.
Argentina has been embroiled in a long-running conflict with severe economic crises that have led its citizens to turn their attention to Mili, who won a resounding victory in last October ’ s election.
As a result of public discontent over decades of economic instability, with annual inflation surpassing the 200 percent threshold and poverty levels rising to 40 percent, Milley embarked on a “bold path to redefining Argentina ’ s future. ”
Massive opposition.
Tens of thousands took to the streets in defiance of Milley ’ s austerity measures, which included cuts to the balance sheet.
The demonstrations disrupted parliamentary debates, leading to confrontations between law enforcement forces and protesters.
Police fired rubber bullets and tear gas, and sprayed protesters with water cannons, with reports of injuries and arrests among protesters.
The leftist opposition withdrew from parliament, denouncing what it saw as a severe police crackdown on protesters.
Opposition MP Mariano del Canio told the AP that "we can't work this way", stressing that protesters should be heard before they return to the hearing after a period of suspension.
Parliamentary manoeuvres
In a strategic move to bolster his program, Milley secured IMF approval to disburse nearly $4.7 billion to Argentina.
The package of reforms, dubbed Omnibus, spans across different sectors, from electoral and cultural reforms to privatization, penal code amendments, and changes to the status of football clubs.
The House of Representatives, by 144 votes to 109, granted general approval, paving the way for the next phase of negotiations in the Senate.
The bill ’ s 664 clauses, which sum up the complex fabric of Melli ’ s reforms, will be subject to close scrutiny and possible amendments.
Although the House of Representatives has generally approved Melli ’ s reform bill, negotiations are on the horizon.
The complex details of the bill, which include economic, administrative, criminal and environmental areas, will be subject to strict scrutiny, according to a pro-plan parliamentary description.
Lawmakers, some of whom have expressed reservations about specific articles on privatizing state companies and delegating legislative powers to the president, are due to participate in detailed discussions.
Milley ’ s challenge is not just to overcome ideological differences, but to build consensus within a fragmented political landscape.
The upcoming recess will provide a break before crucial negotiations resume, marking a pivotal stage in Milley ’ s ambitious agenda for his program.
Millie's presidency is at a crossroads.
Milley ’ s presidency, marked by libertarian principles and capitalist ideals, faces the complex challenge of balancing economic liberalization with societal expectations.
Austerity measures and privatization plans were not without opposition, leading to protests and even a general strike.
The president ’ s swift measures, including a 50 percent devaluation of the peso, cuts in subsidies, and deep cuts in ministries, reflect his confrontational approach to tackling the government ’ s budget deficit and fighting inflation.
However, these actions have aroused resentment, as protesters have questioned the potential impact on the most vulnerable groups in society.
The course of Melli's reforms will shape the country's economic and social landscape.
Experts say that the fine line between government initiatives, parliamentary negotiations and street reactions highlights the multifaceted nature of Argentina ’ s current socio-political reality.
As Argentina grapples with historic economic challenges, observers expect Milley ’ s presidency to be a decisive chapter, with the split between economic liberalization and social welfare taking center stage with every decision that resonates in the corridors of power and crowded streets.
Source: Al Jazeera + Associated Press

How will Milei's reforms impact workers?

The government's economic reforms also aim to promote growth, reduce poverty, and increase investment.

Title:

Content: November 25, 2023

Following Sunday’s election results, Javier Meili is set to become Argentina’s president on December 10. Among other things, President-elect Miley has vowed to replace the peso with the US dollar, a policy known as dollarization. Some critics have argued that dollarization would deplete the Argentine central bank’s US dollar reserves, making dollarization excessively costly and ultimately resulting in hyperinflation. However, in leveling this criticism, they misinterpret Argentina’s current economic situation and fail to consider real-world cases of dollarization during an inflationary crisis.

The risk of hyperinflation in Argentina is not due to Javier Miley’s advocacy of dollarization. Instead, it is the result of years of bad monetary policies. Inflation has been rising steadily since 2007, long before Miley proposed dollarization (and almost anyone in Argentina even thought about the possibility of dollarization).

Some experts argue that, by international standards, Argentina is already experiencing hyperinflation. According to Philip Kagan’s seminal 1956 study, most economists define hyperinflation as an inflation rate greater than 50 percent monthly. To put this in perspective, the average annual inflation rate in Europe between 1950 and 1955 was 5.1 percent. In Kagan’s words, a hyperinflation country experienced monthly price increases that were ten times greater than the price increases experienced by a typical European country in a normal year.

The monetary policy landscape is very different today than in the years immediately preceding Kagan’s study. Over the five-year period ending January 2020, just before the pandemic, the EU’s average annual inflation rate was just 0.98 percent. Using Kagan’s ratio, this would mean that a country experiencing at least 9.8 percent inflation per month has hyperinflation. Argentina saw monthly inflation rates of 12.7 percent and 8.3 percent in September and October, respectively. Therefore, adjusting Cagan’s hyperinflation threshold to reflect general improvements in monetary policy elsewhere would reveal that Argentina is already experiencing hyperinflation. While there is certainly potential for further decline, critics of dollarization need to acknowledge just how serious Argentina’s inflation is in the context of the modern global economy.

International experiences show that dollarization and hyperinflation are interconnected issues, but this is not the case according to critics of dollarization. For example, Ecuador adopted dollarization in January 2000 to prevent hyperinflation. Ecuador’s dollarization proved effective. Dollarization immediately brought Ecuador’s inflation rate into alignment with that of the US and then kept it stable over the next decade, despite economic challenges and two sovereign debt defaults. Another compelling example is Zimbabwe, which adopted dollarization in January 2009 to combat hyperinflation. The result was also successful, with inflation reaching US levels by January 2010. As these cases show, dollarization may be a solution to hyperinflation. Argentina could also either resort to dollarization to prevent hyperinflation, or avoid it if inflation gets out of control.

The risk of hyperinflation in Argentina stems not from an intention to create a dollar but from a central bank that appears unable or unwilling to exercise restraint. Argentina’s historical record shows that central bank independence is absent and not easily secured. For better or worse, dollarization offers the safest path to avoid monetary collapse. This provides Argentina with an opportunity to implement much-needed reforms and move forward on a sustainable development path. Dollarization may make things worse before they get better. But to argue that monetary reform that is supposed to tame inflation will lead to hyperinflation is a distorted view of Argentina’s economic reality.

nicholas kachanowski

Dr. Kachanowski is Associate Professor of Economics and El Paso Woody L. Hunt is the director of the Center for Free Enterprise at the University of Texas in the College of Business. He is also a Fellow of the UCEMA Friedman-Hayek Center for the Study of a Free Society. He served as President of the Association of Private Enterprise Education (APEE, 2021-2022) and on the Board of Directors of the Mont Pelerin Society (MPS, 2018-2022).

He received his Licentiate in Economics from the Pontificia Universidad Católica Argentina, his M.A. in Economics and Political Science from the Escuela Superior de Economía y Administración de Empresas (ESADE), and his Ph.D. M.A. in Economics from Suffolk University, Boston

Dr. Kachanowski is the author of Reflexions sobre la economia argentina (Instituto Acton Argentina, 2017), Monetary balance and nominal income targeting (Routledge, 2019), and co-author Austrian Capital Theory: A Modern Survey of Essentials (Cambridge University Press, 2019), Capital and Finance: Theory and History (Routledge, 2020), and Dollarization: Una Solution for Argentina (Editorial Claridad, 2022).

Dr. Kachanowski’s research has been published in outlets such as Journal of Economic Behavior and Organization, public choice, Journal of Institutional Economics, Quarterly Review of Economics and FinanceAnd Journal of the History of Economic Thought among other outlets.

Get notified of new articles from Nicholas Kachanowski and AIER.

Source: www.aier.org

The economic reforms will require careful planning to ensure equitable benefits and mitigated negative consequences.

Title:

Content: Updated 21 mins ago - Economy

Argentine President Milei's plan to remake the economy with a wrecking ball

If your economy is broken, you can try to fix it — or you can essentially just throw it in the trash and try to build something new from scratch.

Why it matters: The latter is, broadly, the plan of anarcho-capitalist Argentine president Javier Milei, while the former is the plan of Zambian president Hakainde Hichilema.

Where it stands: Milei came in like a wrecking ball after he took office in December. He slashed the official value of the currency in half, introduced a "mega-decree" scrapping 366 separate rules, and laid off 5,000 government employees.

  • Alejandro Werner, the former head of the International Monetary Fund's Western Hemisphere department, explains that this course of "shock therapy" carries enormous risks, both to the upside and the downside.
  • The devaluation, at least for the next few months, increases the Argentine inflation rate, which was over 200% in 2023. Milei's budget cuts will also cause a plunge in household income, as well as a deep recession.
  • The economic pain will embolden Milei's opposition — including in the courts, which have already suspended many of his early decrees. A general strike is planned for Wednesday.

What we're watching: Werner is hopeful that Congress will be at least minimally cooperative, that a good agricultural harvest will help replenish foreign reserves, and that inflation will fall to an annualized rate of 50% by the end of the year.

  • Argentina being Argentina, however, Werner notes, it's entirely possible that Milei's opponents in Congress will block most of his policies and devastating hyperinflation will result.

Reality check: Argentina's action stands in stark contrast to the zugzwang in Zambia, which is trying to restructure the old-fashioned way. There, creditors find themselves in a standoff without any obvious resolution — and where even the IMF seems powerless to move things forward.

Between the lines: Milei was quite the toast of the Davos elite this week, notwithstanding the fact that he's on the record calling climate change "a socialist lie."

  • "The Argentine economy is in such bad shape that it has to be shaken up. President Milei and his team are doing exactly that," said IMF chief Kristalina Georgieva in a CNN interview.
  • Milei returned the favor, saying that the CEOs assembled for his speech were "social benefactors" and "heroes."
  • "Let no one tell you that your ambition is immoral," he added.

The bottom line: For the time being, Milei seems to be able to draw on a wellspring of support and goodwill from the international community.

  • The IMF has restarted its program in the country, which means $4.7 billion in international funds have been unlocked and default isn't imminent.
  • All the same, Argentina's bonds are still trading at roughly the same level as those of Spirit Airlines. Some kind of default remains more likely than not — just pitched as part of a bold recovery plan, rather than being draped in anti-creditor rhetoric.
Go deeper

The government's commitment to social protection will be crucial in addressing the negative impacts of economic reforms.

Title:

Content: MOSCOW, 20 Nov — PRIME.
Argentina can abandon the national currency peso and switch to the US dollar after the victory in the elections in Argentina libertarian Javier Miley, follows from the analysis of RIA Novosti data of national statistical services.
On Sunday, the victory in the presidential elections of Argentina was won by the far-right politician Javier Miley.
He will take office from December 10.
Miley wants to abolish the central bank, carry out dollarization and large-scale privatization in the country.
If Argentina abandons its own currency, it will join the nine countries that already use the dollar at the official level.
In addition to the United States itself, the currency is used by Panama (since 1904), Micronesia, the Marshall Islands and Palau (since 1944), East Timor and Ecuador (since 2000) and El Salvador (2001).
The most recent move was to the Zimbabwean dollar in 2009.
If Argentina begins the transition in December, it will be the first country in 14 years to introduce the US currency.
The country will also become the largest jurisdiction after the United States, using the dollar as a domestic currency.
Its GDP at the end of last year amounted to 633 billion dollars, which is almost 5.5 times more than the largest economy at the moment, Ecuador ($115 billion) and 30 times larger than the Zimbabwean economy ($20.7 billion).
Like Argentina, Ecuador and Zimbabwe switched to the dollar due to high inflation.
In Ecuador, it reached 91% at the time of transition, and it took the country four years to bring it to 1.9%.
In Zimbabwe, inflation in 2008 reached 79.6 billion percent per month, but in 2009 the country moved to an annual deflation of 7.7%.
At the same time, the use of the dollar did not save the country from a new round of price growth that began in 2018, when inflation accelerated 12 times.
The Zimbabwean government even tried to abandon the dollar in 2019, but eventually extended its use until 2030.
In Argentina, inflation in October was 142.7% per annum.

Milei's economic reforms will depend on balancing growth and stability with protecting workers' and vulnerable groups' rights.

Milei's economic reforms will depend on balancing growth and stability with protecting workers' and vulnerable groups' rights.