2023-12-13 00:44:41
Luis Caputo, Javier Milei’s Minister of Finance, announced on Tuesday night the first measures of the adjustment plan that the president promised both at his inauguration and throughout his campaign, in addition to a devaluation of the currency that places the exchange rate is 800 pesos per dollar. The previous minister and Peronist candidate, Sergio Massa, had left the exchange rate at 400 pesos per dollar.
The measures certify a notable reduction in public spending and the State reform anticipated by Milei, although the first announcement was the non-renewal of the State’s one-year labor contracts. To which will be added the suspension of institutional advertising for at least one year
The official currency exchange rate is 800 pesos per dollar to contain inflation
The also promised reduction of the administration that Milei presented in a histrionic video will see the Government go from 18 to new ministries and the Secretariats of State, from 106 to 54. Regarding the contribution of the State to the provinces, Caputo pointed out that will be reduced to a minimum.
To reduce inflation that reached 300% annually and “avoid a catastrophe,” the minister announced a shock plan that will begin with this monetary devaluation. To protect the most disadvantaged, Caputo pointed out that the State will double the aid per child and the provision of food cards.
These measures have obtained the support of the International Monetary Fund (IMF) already early Wednesday. “These strong initial actions aim to significantly improve public finances in a way that protects the most vulnerable in society and to strengthen the exchange rate regime,” IMF Communications Director Julie Kozack said in a statement.
These are the 10 measures of the announced plan:
1. State labor contracts that are less than one year old will not be renewed.
2. National Government advertising in the media is suspended for one year.
3. The number of ministries is reduced from 18 to 9 and the secretariats from 106 to 54, which will allow a reduction of 50% of hierarchical positions in the Public Administration and 34% of the total political positions of the national State.
4. Transfers from the national State to the provinces will be reduced to a minimum.
5. The national State will not put out to tender any more new public works and will cancel approved tenders whose development has not yet begun. Infrastructure works will be carried out by the private sector.
6. Energy and transportation subsidies will be reduced.
7. The official exchange rate goes from 400 pesos per US dollar to 800 pesos per unit, which implies a devaluation of the Argentine peso of 50%.
8. The current import regulation system will be replaced by a statistical system that will not require prior approval of licenses.
9. State aid plans for the unemployed (Empower Work plan) will be maintained in accordance with the provisions of the 2023 Budget and social policies that are received directly by those who need them will be strengthened, such as the Universal Child Allowance – an aid that paid by the State – and the so-called Alimentar Card, which allows the most vulnerable sectors to buy food.
10. The amount of the Universal Allowance per child will be doubled and the amount of the so-called Food Card will be increased by 50%
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