Does Milei’s reform program risk insurmountable resistance?

ARGENTINA - In Brief 21 Dec 2023 by Esteban Fernández Medrano

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Last night, in a recorded speech on national television, President Javier Milei announced the signature of a Decree of Necessity and Urgency (DNU), which includes more than 300 reform points. He gave his speech in the company of all his cabinet (who had co-signed the DNU), with the addition of Federico Sturzenegger (Presidential Advisor and one of the main authors of the reform text). Milei anticipated that the DNU would be presented in the coming days to the Congress, which will open in extraordinary sessions to debate it. During the speech, faithful to his direct style and libertarian ideology, Milei gave a bleak review of the economic problems he inherited. He repeatedly focused on the urgency to close the fiscal deficit as the main macroeconomic pillar to be able to move on with other reforms. He also brought forward 30 of the main reforms that are included in the DNU. The topics addressed were widespread and, as might have been expected, included politically sensitive issues, such as the abolition of the “rental (protection) law”, the modernization of the labor regulations, the abolition of all price, production, and export controls, and the authorization to privatize all public companies (including Aerolineas Argentinas, with the implementation of the “open skies” policy). Additionally, Milei announced the modification of the Civil and Commercial Code to reinforce the principle of contractual freedom and to guarantee that obligations contracted in foreign currency must be paid in the agreed currency. Milei’s economic analysis, leaving aside some exaggerations, is correct. But the boldness of some of his measures and the way he implemented them (initially going th...