Argentina’s “shock therapy” is new: the privatization process of state-owned enterprises has been launched and various industries have been fully deregulated.
2023-12-21 15:32:22
Financial Associated Press, December 21 (Editor Shi Zhengcheng) On Wednesday evening local time, Argentine President and far-right liberal economist Javier Milay delivered a nationally televised speech announcing the next phase of “shock therapy.”
Sitting in front of the entire Argentine cabinet leadership team, Milai announced: “I am signing an emergency decree that will initiate the economic deregulation process that Argentina desperately needs.”
In his speech on Wednesday, Milley listed more than 30 reforms and said this was only part of a package and that his “shock therapy” would include more than 300 similar reforms.
After Argentina entered the “Millay Era” last week, it immediately announced a 54% devaluation of the official exchange rate of the Argentine peso and slashed public jobs, kicking off “shock therapy.” By the way, these measures of Milais were immediately recognized and praised by the IMF and international investment banks.
What is included in the second phase of “shock therapy”?
As the market expected, Milley’s reform plan is full of words such as “abolition”, “cancellation” and “relaxation”.
In summary, the more “obvious” policies include: preparing to privatize all state-owned enterprises; abolishing property rental price restrictions and restrictions on foreigners purchasing land ownership; relaxing a series of regulations and regulations in the medical, tourism, satellite Internet, retail and other industries. rule.
The following are 30 economic reforms summarized by the Buenos Aires Times:
1. Abolish the tenancy law.
2. Repeal anti-hoarding laws.
3. Abolish the supermarket shelf display law and stop interfering in the decision-making of Argentine retailers.
4. Repeal the “Buy Argentinian Products Legislation” that only benefits certain powerful groups.
5. Eliminate the price observatory of the Ministry of Economic Affairs.
6. Repeal the Industrial Promotion Act.
7. Repeal the Business Promotion Act.
8. Repeal regulations that prevent the privatization of public companies.
9. Abolish the management system of state-owned enterprises.
10. Convert all state-owned enterprises into limited companies for subsequent privatization.
11. Relevant legislation in the field of modernized labor.
12. Reform customs-related rules to facilitate international trade.
13. Abolish land laws to promote investment.
14. Amend the Fire Protection Law.
15. Abolition of obligations imposed on sugar mills in the production of sugar.
16. Relax the legal regime that applies to the wine industry.
17. Abolish the national mining management system.
18. Authorize the complete or partial transfer of the shares of Aerolíneas Argentinas.
19. Implement an “open skies” policy.
20. Amend the Civil and Commercial Code to strengthen the principle of freedom of contract between both parties.
21. Amend the Civil and Commercial Code to ensure that debts signed in foreign currencies must be paid in the agreed currency.
22. Modify the regulatory framework governing prepaid medical and medical insurance systems.
23. Eliminate price restrictions on prepaid health plans.
24. Incorporate prepaid medical plans into the medical insurance system.
25. Establish electronic prescriptions to speed up service and minimize costs.
26. Modify the management system of pharmaceutical companies to encourage competition and reduce costs.
27. Amend the Company Law to allow football clubs to transform into limited companies according to their wishes.
28. Deregulate satellite Internet services.
29. Deregulate the tourism industry and eliminate the monopoly in the travel agency industry.
30. Incorporate digital tools into vehicle registration procedures.
Legal and social challenges have emerged
Whether Milley’s “Shock New Deal” can be implemented is still unknown.
According to the Argentinian constitution, the president can issue “urgent and necessary decrees” in most policy areas, except for individual areas such as taxation and electoral matters. Although Milley said he would submit a series of supplementary proposals to Congress, it is unclear how many of the New Deal will ultimately “survive.”
Also under the Argentine constitution, they will remain in effect until both chambers of Congress vote to repeal the president’s “emergency decrees.” The problem is that even if all the votes from Milley’s party and the pro-business alliance are counted, it still falls short of half.
At the same time, Germán Martínez, the leader of the “Fatherland Alliance” composed of the Peronist party, said on Wednesday that Milai’s new policies are “neither necessary nor urgent” and that he should bring these measures to Congress for debate first. The center-left alliance holds nearly 40% of the seats in the lower house.
Just hours before Milley’s speech on Wednesday, thousands of protesters organized by opposition parties took to the streets of the Argentine capital to express their dissatisfaction with the “Millay New Deal.” The protest ended peacefully and did not trigger the massive street blockades that have been common in past years.
The Milais government is also very aware that its policies will trigger a series of objections. It has made it clear that protests are allowed, but it has also set “rules” in advance: anyone who blocks traffic arteries may have their public assistance projects stopped. Payments are made, and marchers are prohibited from carrying sticks, covering their faces or bringing children to the protest.
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2023-12-21 07:32:22
