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2023
Plan for a sharp decline in the role of the state in the economy
President Javier Miley in December 2023 announced sweeping reforms aimed at reducing the state's role in Argentina's economy, including steps to privatize companies, ease exports and end price controls. The opposition began organizing demonstrations against his policies.
List of initial changes in Miley's policy:
- Prepare all state-owned companies for privatization.
- Allow partial or full transfer of shareholder control of Aerolineas Argentinas to individuals.
- Abolish price controls on prepaid health plans.
- Eliminate the monopoly of travel agencies to deregulate the sector.
- Repeal the current rental law limiting price increases to normalise the property market.
- Repeal the current Land Act restricting foreign ownership of land "in order to encourage investment."
- Repeal the current Supply Act, which allows the government to set minimum and maximum prices and profit rates for goods and services of private companies.
- Liquidate the Price Supervisory Board under the Ministry of Economy to "avoid harassment of companies."
10 measures to reduce government spending
Finance Minister Caputo in December 2023 announced 10 measures, most of which were aimed at reducing public spending:
1) Government labor contracts in effect for less than one year will not be renewed.
2) Suspension for one year of spending of the state budget for advertising.
3) Reduction in the number of ministries and secretariats.
The first three points are aimed at a sharp reduction in the number of civil servants and government spending related to their maintenance.
4) Reducing 'to a minimum' cash transfers to regional (provincial) governments in Argentina. Each province will now be forced to independently seek funds to fill the regional budget.
5) Cancellation of public works tenders and suspension of those tenders that have not yet begun. This means freezing all new infrastructure projects and stopping servicing existing ones.
6) Reduction of energy and transport subsidies.
7) Freezing costs for Potenciar Trabajo work program. It was a social employment programme for the most vulnerable.
8) Raising the official dollar rate to 800 pesos per dollar. Increase in PAIS import tax and export duties on non-agricultural goods.
9) Replacing SIRA with an import system that does not require prior authorization.
10) Doubling the child benefit and increasing the Alimentar food card 50%. The decision was made against the background of current inflation of 120%.
Louis Kaputo said that the expenditure part of the budget chronically exceeds the revenue. The budget deficit has been observed for 113 of the last 123 years.
Over the past 12 months, consumer prices have risen by more than 140%, and more than 40% of the population lives below the poverty line.
The budget deficit exceeds 5.5% of GDP. There are no dollars on the balance sheet of the Central Bank, which forces you to print money in the amount of about 20% of GDP. This leads to inflation.
Argentina's new president abolished half of the ministries. List of remaining
On December 10, 2023, Javier Miley took the oath of office before parliamentarians and took office as president of Argentina. One of his first decrees, he reduced the number of ministries from 18 to 9.
According to the decree, the following ministries will function in Argentina:
- defenses
- foreign affairs
- economies
- internal affairs and security
- infrastructures
- justices
- international trade and culture
- health care
- human capital.
As TASS reminds, earlier the Argentine government included the ministries of transport, public works, science, territorial and housing development, culture, environment, tourism, livestock and agriculture and women's affairs.
According to Infobae, the Ministry of Human Capital is a new body in the government structure. Sandra Pettovello, a journalist and former vice president of the Union of the Democratic Center (Usede), has been appointed its leader. Nicholas Pozee was appointed head of all ministers.
The oath as Secretary General of the Office of the President was also taken by the sister of the new head of state, Karina Miley. She took the position despite a 2018 decree in Argentina banning the appointment of relatives to public posts.
Louis Kaputo, a former finance minister and ex-head of the Central Bank during the reign of President Mauricio Macri, became Minister of Economy. The Ministry of Security was headed by Patricia Bullrich, who ran for head of state, but could not qualify for the second round. Bullrich's running mate Louis Petri, who was running for vice president, became defense minister. The Ministry of Foreign Affairs of the republic was headed by Diana Mondino, and Mariano Cuneo Libarona, a well-known lawyer who defended politicians, as well as relatives of ex-President Carlos Menem, became Minister of Justice. Economist Guillermo Ferraro was appointed Minister of Infrastructure.[1]
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