Argentina's President Javier Milei gestures during the CPAC Brazil conference in Camboriu, Santa Catarina State, Brazil on July 7, 2024. (Photo by EVARISTO SA / AFP)
Buenos Aires: Argentine President Javier Milei's flagship economic reforms kicked in Monday, ushering in privatizations, relaxed labor protections and incentives to boost investment in a country battling decades of decline.
The package of reforms was enacted after months of debate and violent protests against the bill, amid a punishing recession and harsh austerity measures that have hit Argentines hard.
The self-declared "anarcho-capitalist" president now has the green light to declare a one-year state of economic emergency, disband federal agencies and privatize about a dozen public companies.
Other measures deal with weakening labor protections -- slammed by left-wing opponents as a license to fire workers.
The provisions also envision tax, customs and foreign exchange incentives to encourage investment in the country wracked by economic crisis.
Milei's government has applied a drastic, all-out fiscal austerity program, with the aim of achieving "zero budget deficit" by the end of 2024 to tame chronic inflation.
But budget cuts, including the paralysis of public works, coupled with a brutal devaluation of the peso by more than half in December, have strangled purchasing power.
The International Monetary Fund expects Argentina's economy to contract by 3.5 percent this year.
A fiery outsider, Milei took office in December after sweeping to power on a wave of deep discontent with traditional parties unable to curb government spending and soaring inflation.
Monthly inflation is now at its lowest point in two-and-a-half years, driven by a drop in consumption as the economy slumps.
On Tuesday, Milei has called on all political forces to sign a 10-point pact for a "new economic order" in Argentina, coinciding with the celebration of the country's independence day.
The pact includes a commitment to "non-negotiable fiscal balance," a steep reduction in public spending, fresh discussion of federal tax sharing, modern labor reforms and opening to the international market.
Several governors and former presidents have said they will not attend. Members of the Supreme Court and opposition lawmakers also do not plan to sign.
