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Milei Brings His Chainsaw to Argentina's Regulatory State

A little more than two weeks after assuming office, Argentinian President Javier Milei on Wednesday presented his most extensive reform bill to Congress aimed at deregulating South America's second-largest economy. 

The 351-page bill includes 664 articles aimed at deregulating and modifying laws pertaining to several sectors, including labor, commercial, real estate, aeronautics, and health. According to Milei, the omnibus bill contains two-thirds of all of his reform proposals. 

"Argentina is immersed in a serious and deep economic, financial, fiscal, social, pension, security, defense, tariff, energy, health and social crisis without precedent, which affects all levels of society and the very functioning of the State," the bill states. 

These crises were caused by "an innumerable number of restrictions on the exercise of constitutional rights, especially those of trading, working, and exercising lawful industry," the bill continues, adding that these restrictions "severely limit competition" and "artificially distort prices" while "burdening the real income of citizens."

The first measure in the bill calls for the declaration of "a public emergency in economic, financial, fiscal, pensions, defense, tariff, energy, health, administrative, and social matters until December 31, 2025."  If approved, this would mean that Milei would have both the executive and legislative powers and would be able to decide on issues that are currently only regulated by Congress. The measure can be extended for up to two years.

An entire chapter of the bill is dedicated to privatizing several state-owned companies in order to generate "greater competition and economic efficiency, reduce the tax burden, improve the quality of services, promote private investment and professionalize management." The bill mentions 41 companies it proposes to privatize, including the flagship airline Aerolíneas Argentinas, the oil company YFP, the country's largest bank, Banco de la Nación, the news agency Télam, the water company AYSA, the Argentine mint, and the country's rail system. 

Milei's proposal aims to simplify, digitalize, and de-bureaucratize the administration "to promote transparency and due administrative process…to obtain efficient regulations for market competitiveness, job creation, and everything that contributes to raising the standard of living of citizens."

The bill proposes to eliminate the primary elections and switch to a single-ballot system. It also seeks to move the chamber of deputies from a system that determines the number of representatives proportionally with the population to one of single-member constituencies.

The bill also extends the government's new anti-protest measures, increasing penalties to up to four years in prison for those who use arms to disrupt public transportation and up to five years for those who "direct, organize, or coordinate a meeting or demonstration that impedes, hinders or obstructs circulation."

Another chapter specifically addresses oil and seeks to ensure affordable oil supplies by leaving prices up to the market. Currently, the government can meddle in crude and gasoline prices, according to Bloomberg. The new bill will not allow the executive branch "to intervene, or fix, prices in the domestic market."

Other measures in the bill include the resale of sports tickets with "no limit to the number of times such operation may be carried out;" the authorization of self-driving cars for individuals, passengers, or cargo; abolishing price ceilings on rent; easing price caps for private health services; and "express divorces." 

The measures will be reviewed by Congress during the extraordinary sessions that began this week and will last until January 31. But Milei's opposition, which holds the majority of seats in Congress, has vowed to not let the decree pass. Meanwhile, protests have sprung up in response to the omnibus bill. Several social organizations took to the streets in Buenos Aires, and Argentina's main labor union called for a general strike on January 24 in protest against the reforms. 

Should Milei's sweeping reforms pass, Argentina would move from being one of the world's most regulated economies to a deregulated, free market economy that could reverse decades of government failure. 

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