Government of Milei in Argentina announces first measures: Devaluation, elimination of subsidies and dismissals
Internet
Published at: 12/12/2023 08:55 PM
The Government of Argentina, led by the far-right Javier Milei, announced on Tuesday an official devaluation of the peso that doubles the current price and strong cuts in public spending that will affect numerous sectors, including public works, which are completely paralyzed, as well as subsidies for energy, transport and transfers of federal funds to the provinces.
Local media indicate that the official exchange rate went from 400 pesos per dollar to 800, an increase in the price that represents a proportional increase in the cost of goods and services in the southern nation.
After the announcement of these measures, which he said are avoiding “the catastrophe”, the Minister of Economy, Luis Caputo, acknowledged that in terms of inflation the country will be “a few months worse than before”.
Among the measures of the “emergency” plan are the price of the official dollar, whose purchase will continue to be restricted by the so-called exchange rate “stocks”. In addition, there will be a sharp reduction in public office, which began with the reduction of the number of ministries by half, leaving only 9 of the 18 that existed in the previous administration. The same applies to secretariats, which will go from 106 to 54.
In addition, “all public administration contracts that are less than a year old will be canceled”, a measure that experts say will increase unemployment rates in this country.
On the other hand, a scheme will be initiated to eliminate subsidies for energy and transport tariffs in the Metropolitan Area of Buenos Aires (AMBA), to which it is added that the national State will not tender public works and will cancel those that have been tendered and have not been executed.
The transfer of resources from the nation to the provinces will be reduced “to a minimum” and the suspension of the official pattern to the media was announced for one year, as announced hours earlier by the presidential spokesman, Manuel Adorni.
It also announced the end of the Argentine Import System (SIRA), an online electronic instrument that regulates the entry of goods from abroad under the orbit of the Federal Administration of Public Revenue (AFIP).
From now on, prior license approval will not be required. “Discretion is ending. Whoever wants to import can do it, period,” he said, a measure that economists point out will affect domestic production.
He indicated that income from social programs such as the Universal Child Allowance (AUH) will double and the Food Card will increase by 50% and the Empower Work plans will be maintained and will seek to strengthen social policies that go “directly to the people who need it most, without intermediaries”.
Mazo News Team