300 economic regulations eliminated in Argentina

2023 12 21T004210Z 1 LYNXMPEJBK00V RTROPTP 4 ARGENTINA ECONOMY OECD 1 scaled
FILE PHOTO: Argentina's President Javier Milei looks on as he attends a Hanukkah celebration in Buenos Aires, Argentina, December 12, 2023. REUTERS/Tomas Cuesta//File Photo

Argentina’s recently inaugurated president, Javier Milei, has introduced extensive measures aimed at deregulating the economy, a move that critics worry may jeopardise employment opportunities and affordable housing for millions of Argentinians. Milei, who assumed office on December 10, announced the elimination or modification of approximately 300 regulations through emergency decrees, citing the necessity of addressing the country’s economic challenges.

Among the sweeping changes are the abandonment of laws governing Argentina’s rental market and supermarket supplies, along with the removal of restrictions on the privatization of state-owned enterprises. In a televised address, Milei explained that the objective is to initiate the process of rebuilding the nation by dismantling a significant number of regulations that have impeded economic growth.

These reforms supplement the austerity measures disclosed by Milei the previous week, which involved a 54% devaluation of Argentina’s currency and the reduction of state subsidies for fuel and transportation starting in the upcoming year. The president characterises this approach as “economic shock” therapy necessary to revive an economy burdened by debt and grappling with a staggering 140% year-on-year inflation rate.

Despite the president’s optimism about revitalizing the economy, Milei has cautioned that conditions may worsen before showing signs of improvement, particularly in light of the alarming 40% poverty rate among Argentinians.

After the president’s speech, tens of thousands of individuals gathered near the National Congress in Buenos Aires to express their discontent, following an earlier mass protest against austerity on the same day. The demonstrators expressed concerns, saying the measures are very negative, especially for the rent law and the labour reform.

In an effort to prevent protesters from obstructing traffic earlier in the day, military police and security services lined the streets and photographed some demonstrators attempting to reach the city centre. The government issued a threat to revoke welfare from anyone blocking the streets.

Criticism from Argentinian labour and rights groups mounted against the heavy-handed security response, with accusations of it being a provocation that endangers democratic freedoms. People say the government is violating the rights of protesters in Argentina and they are worried about democratic freedoms in Argentina.

The sweeping deregulatory decrees introduced by Milei now face evaluation by a joint committee of lawmakers from both chambers of the legislature within 10 days. The decrees can only be overturned if both the Lower House and the Senate reject them.

Milei, a career academic self-identifying as an anarcho-capitalist, surprised the political establishment with his victory in the presidential election in November. Despite public disillusionment with decades of economic crises, characterised by debt, extensive money printing, inflation, and fiscal deficits, the public’s reaction to his austerity plan indicates that he will encounter challenges in implementing his agenda to reduce the state budget.

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