Argentina's Milei announces sweeping decree to deregulate economy

Argentina's new leader Javier Milei on Wednesday unveiled a series of measures to deregulate the country's struggling economy, eliminating or changing more than 300 rules, including on rent and labour practices.

"The goal is to start along the path to rebuilding the country... and start to undo the huge number of regulations that have held back and prevented economic growth," Milei said in a televised speech from the presidential palace, flanked by his cabinet.

Latin America's third-biggest economy is on its knees after decades of debt and financial mismanagement, with annual inflation at 140 percent and 40 percent of Argentines living in poverty.

Milei, who was elected last month and took office 10 days ago, has pledged to curb inflation, but has warned that economic "shock" treatment is the only solution, and that the situation will get worse before it improves.

Among the changes announced on Wednesday are the elimination of a law regulating rent, as well as rules preventing the privatization of state enterprises.

Milei also announced a "modernisation of labor law to facilitate the process of creating real jobs" and a series of other deregulatory measures affecting tourism, satellite internet services, pharmaceuticals, wine production and foreign trade.

In order for the measures to take effect, they must be published in the government gazette and then assessed by a joint committee of lawmakers from both chambers of the legislature. 

Constitutional law expert Emiliano Vitaliani told AFP that they could only be overturned if rejected by both the lower House and the Senate.

Milei's far-right Libertad Avanza party only has 40 seats in the 257-member lower house and seven senators out of 72.
 

'Shock' therapy for economy 

The 53-year-old libertarian and self-described "anarcho-capitalist" has said spending cuts equivalent to five percent of gross domestic product are needed.

Before Wednesday's announcement, his administration had already devalued Argentina's peso by more than 50 percent, and announced huge cuts in generous state subsidies of fuel and transport from January -- reductions that are sure to hit everyday Argentines, who are used to hefty assistance.

Milei has also announced a halt to all new public construction projects and a year-long suspension of state advertising.

Last week's measures to tackle inflation were welcomed by the International Monetary Fund, to which Argentina owes $44 billion.

Milei won a resounding election victory in November surfing a wave of fury over decades of recurrent economic crises, marked by debt, rampant money printing, inflation and fiscal deficit.

Argentines remain haunted by hyperinflation of up to 3,000 percent in 1989-1990 and a dramatic economic implosion in 2001.

(AFP)