Milei Unveils Broad Reforms To Liberalize Argentina Economy

(Bloomberg) -- President Javier Milei announced sweeping reforms to reduce the hand of the state in Argentina’s economy, including steps to privatize companies, facilitate exports and end price controls.

The libertarian leader listed 30 initial points of his plan in a televised address Wednesday night, adding they’re part of a broader package containing over 300 measures. 

“I’m signing an urgent decree that will kick-start the process of economic deregulation that Argentina needs so much,” he said in the speech delivered from the presidential palace, flanked by his entire cabinet.

His plan comes one week after Economy Minister Luis Caputo announced deep budget cuts and a 54% devaluation of the peso as part of a shock-therapy program designed to avoid hyperinflation and put the economy back on track. Markets have so far applauded the moves, sending bond prices to two-year highs and keeping the peso’s parallel exchange rates little changed.

Read More: ‘There Is No Money’: Argentina Begins Economic Shock Remedy

While Milei said he’ll send lawmakers a set of complementary proposals, it’s unclear how far he can go in implementing his plan by decree. What’s certain is that he’ll face opposition in congress, where he doesn’t have a majority even with the combined votes of the business-friendly coalition that’s likely to support him.

Some measures are likely to be challenged in the courts, and the opposition has already started to organize demonstrations against his policies. The first major protest against Milei took place earlier on Wednesday and was largely contained by an unusually large police force, ensuring few streets were blocked. 

Here’s a list of Milei’s initial policy changes, whose architect was Federico Sturzenegger, a former central bank chief during the government of Mauricio Macri:

• Prepare all state-owned companies to be privatized
• Authorize the shareholder control of Aerolineas Argentinas to be partly of completely transferred to private parties
• Deregulate satellite Internet services to allow SpaceX’s Starlink to operate in Argentina
• Eliminate price controls on prepaid healthcare plans
• Eliminate the monopoly of tourism agencies to deregulate the sector
• Repeal the current Rent Law that limits price increases in a bid to normalize the real estate market
• Repeal the current Land Law that limits ownership of land by foreigners in a bid to promote investments
• Scrap the currrent Supply Law that allows the government to set minimum and maximum prices and profit margins for goods and services of private companies
• Eliminate the Economy Ministry’s price observatory to “avoid the persecution of companies”

(Updates with details of measures announced and background starting in fifth paragraph.)

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