Argentina’s President Javier Milei speaks during the opening session of the 142nd legislative term, at the National Congress, in Buenos Aires, Argentina, March 1, 2024.
| Photo Credit: REUTERS
Argentina’s libertarian President Javier Milei, in his first policy speech to parliament on Friday, said he would push his package of sweeping economic reforms whether or not legislators back it.
“We are going to change the country for good… with or without the support of political leaders, with all the legal resources of the executive,” Mr. Milei told lawmakers, who have stalled his project of deregulation and budget cuts.
“If you look for conflict, you will have conflict,” he told them.
Mr. Milei offered a recap of his first 82 days in office, in which he devalued the peso more than 50%, slashed state subsidies for fuel and transport, cut tens of thousands of public service jobs, and scrapped hundreds of rules in his bid to deregulate the economy.
“I ask for patience and trust,” Mr. Milei said. “It will be some time before we can perceive the fruit of the economic reorganization and the reforms we are implementing.”
Many of his planned reforms face challenges in court, with more than 60 lawsuits under way by labor unions, business chambers and NGOs, while Argentina has seen massive protests by citizens who fear Milei’s plans will leave them poorer.
“We have not yet seen all the effects of the disaster we inherited, but we are convinced that we are on the right path, because for the first time in history we are attacking the problem by its cause: the fiscal deficit, and not by its symptoms,” Mr. Milei said.
In recent weeks, Mr. Milei has reached out to influential provincial governors, party leaders and former Presidents to forge a “new social contract” for the country, based on ten principles, including a “non-negotiable” balanced budget, “inviolable” private property, and public spending reduced to the “historic” level of 25% of GDP.
Decades of mismanagement
Faced with parliamentary reticence, Milei scrapped almost half of the initial 664 articles in the sweeping deregulatory measure issued after he took office, then withdrew it altogether.
But the president has vowed to return his Bill to parliament. And he has threatened to pass his reforms by Presidential decree if lawmakers do not fall in line.
Argentina is grappling with severe economic struggles after decades of mismanagement that has driven poverty levels to nearly 60% and pushed inflation to an annual rate over 200%.
Mr. Milei, a 53-year-old political outsider, won a resounding election victory last year on a wave of fury over a financial crisis marked by rampant money printing and fiscal deficit.
The government claims some of Mr. Milei’s changes are already bearing fruit: In January, Argentina reported its first monthly budget surplus in 12 years while boosting foreign currency reserves from $21 billion to $27 billion.
But as annual inflation continued to bite, the poor were hit hard as Mr. Milei also ripped away generous transport and energy subsidies and froze aid to 38,000 soup kitchens pending an audit.
Mr. Milei insists Argentina has to swallow a bitter pill to rescue the economy, and has warned the population to brace themselves for things getting worse before they get better.
