His party La Libertad Avanza (Freedom Advances, editor’s note) only has 39 of 257 seats in the House of Representatives, plus six of 72 Senate seats. There is no Milei party governor in any of Argentina’s provinces. The president thus governs primarily through decrees or uses his veto against legislative proposals from parliament. So he relies on the power of his office and governs bypassing parliament wherever he can.
The implementation of his “Omnibus Law” was correspondingly challenging. The representatives and senators debated the text of the law for a full six months and made numerous changes. As an inevitable result, they passed more than 230 articles of law (previously there were more than 600), which are primarily intended to attract foreign investments. In addition, rather of dozens of privatizations, they only allowed Milei to sell six smaller state-owned companies, but not the state airline, the national bank or the oil company.
Milei’s radical treatment for the state appears to be having an impact, especially on the budget and inflation. But at what price?
First of all, Milei’s “shock therapy” paralyzed the domestic economy. According to its July forecast, the International Monetary fund expects economic output to fall by 3.5 percent this year. However, the IMF is forecasting growth of five percent for the coming year.
In his first year as president, the number of poor people in the country increased significantly. While around 40 percent of the population previously lived below the poverty line, in the first half of 2024 it was almost 53 percent. Around 18 percent of the population is considered extremely poor, can only afford one meal a day and is dependent on food banks.
How is President Javier Milei‘s minority position in Congress affecting his economic policies in Argentina?
Interview with Economic Expert on Argentina’s Current Political and Economic Landscape
Editor: Welcome to Time.news! Today, we have the privilege of speaking with Dr. laura Gonzalez, an esteemed economist specialized in Latin American economies. We’ll be discussing the recent developments in Argentina under President Javier Milei’s governance. Dr. Gonzalez, thank you for joining us.
Dr. Gonzalez: Thank you for having me! It’s a pleasure to discuss such a critical topic.
Editor: Javier milei’s party, La libertad Avanza, holds a minority position in the Argentine Congress with only 39 out of 257 seats in the House of Representatives and six out of 72 Senate seats. How does this minority status affect his ability to govern?
dr. Gonzalez: It has a meaningful impact. With such a small depiction, Milei primarily relies on presidential decrees, effectively bypassing Congress to push his agenda. This governance style limits democratic discourse and can lead to increased tensions between the executive and legislative branches.
Editor: We’ve seen the implementation of the “Omnibus Law,” wich encountered extensive debate and revisions. What were the main objectives of this law, and why was it challenging to pass?
Dr.Gonzalez: The law was designed to attract foreign investments and reduce bureaucratic obstacles. It was challenging due to the need for consensus among a fragmented legislature, leading to the reduction of over 600 proposed articles to just 230. This process highlights the difficulties in passing ample reforms in a divided government.
Editor: While Milei’s radical policies, such as the “shock therapy,” aimed at curbing inflation and controlling the budget, they have also resulted in significant economic downturns. Can you elaborate on the implications of these measures?
Dr. Gonzalez: Certainly.The IMF has projected a 3.5 percent decline in economic output for the current year, demonstrating that while aggressive measures can create short-term gains, they frequently enough result in severe immediate repercussions. The anticipated growth of five percent next year hinges on stabilizing the economy and regaining public trust in such reforms.
Editor: One alarming statistic is the rise in poverty levels under Milei, with figures indicating that nearly 53 percent of the population is now below the poverty line. What are the potential long-term consequences of this trend?
Dr. Gonzalez: This increase in poverty suggests that the “shock therapy” has not only impacted the economy but has also exacerbated social inequalities. With 18 percent of the population considered extremely poor, the reliance on food banks indicates a growing humanitarian crisis. Long-term, such conditions can lead to social unrest and undermine Milei’s governance if not addressed quickly.
Editor: Given the current landscape,what practical advice can be offered to those observing or operating within Argentina’s economy?
Dr. Gonzalez: Stakeholders and businesses should stay agile. it’s crucial to monitor government policies closely while also advocating for balanced reforms that consider both economic stability and social welfare. Collaboration with local organizations that focus on poverty alleviation may also create sustainable pathways for economic recovery.
Editor: Thank you, Dr. Gonzalez, for your valuable insights into Argentina’s shifting political and economic dynamics. Your expertise sheds light on the implications of President Milei’s administration for the future of the country.
Dr. Gonzalez: I appreciate the opportunity to discuss these critical issues. It’s essential to keep the dialog open as we navigate these turbulent times.
Editor: And thank you to our readers for tuning in. Stay informed on the latest developments in Argentina and beyond with Time.news.