Argentina's new leader Milei unleashes economic deregulation, sparks street protests

President Javier Milei unveiled a comprehensive set of measures on Wednesday, dismantling over 300 regulations through presidential decree.

The reforms, encompassing sectors from rent to labor practices, aim to kickstart economic recovery in the face of skyrocketing inflation and widespread poverty.

Addressing the nation from the presidential palace, Milei asserted, “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.”

The Latin American giant, grappling with economic turmoil due to decades of debt and mismanagement, faces an inflation rate exceeding 160 percent year-on-year, with 40 percent of its population living in poverty.

Milei, elected just last month and inaugurated 10 days ago, has promised to tackle inflation head-on. However, he cautioned that the proposed economic “shock” treatment is imperative, forewarning that the situation might worsen before showing signs of improvement.

The announced changes include the scrapping of rent regulations, opening the door to privatization of state enterprises, and a modernization of labor laws aimed at fostering job creation.

Deregulatory measures also extend to tourism, satellite internet services, pharmaceuticals, wine production, and foreign trade.

The sweeping reforms, however, triggered immediate public discontent. Thousands took to the streets near Congress, banging pots and pans, waving flags, and expressing their concerns over the perceived negative impact of the measures.

“I am here because I am terrified by the decree,” voiced Nicolas Waiselbaum, a 48-year-old teacher. Leopoldo Maldonado, a 25-year-old student, echoed the sentiment, expressing worry about the rent law and labor reform, stating, “It is already very complicated for young people to get a stable job.”

The decree, published at midnight, faces scrutiny from a joint committee of lawmakers within 10 days. Constitutional law expert Emiliano Vitaliani explained that rejection by both the lower House and the Senate is necessary to overturn the decree.

Milei, leading the far-right Libertad Avanza party, faces challenges in the legislature with 40 seats in the 257-member lower house and seven senators out of 72. However, considering support from the center-right Together for Change coalition, Milei’s margin strengthens.

Political analyst Lara Goyburu views Milei’s actions as expected given his campaign promises but notes the unusual use of an emergency decree.

The self-described “anarcho-capitalist” had already initiated significant economic measures, including a peso devaluation, subsidy cuts, a halt to new public construction projects, and a suspension of state advertising.

Last week’s measures targeting inflation received approval from the International Monetary Fund, which Argentina owes $44 billion.

Milei emphasized the need for spending cuts equivalent to five percent of the GDP, attributing the nation’s historical crises to persistent budget deficits.

Milei’s resounding election victory in November reflected public frustration with recurring economic crises.

Argentines, haunted by memories of hyperinflation in 1989-1990 and a severe economic collapse in 2001, now confront a leader implementing drastic reforms amid growing street protests.