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OPINION AND ANALYSIS | 17-12-2023 08:19

The first measures of neoliberalism in power

The abrupt devaluation of the peso against the dollar and the elimination of transport and energy subsidies will harm Argentines and only benefit the financial and agricultural sectors. During the campaign, Milei rejected the taxes “suffocating” Argentines; he has already forgotten his vow.

For those of us who have tried to change politics from the inside and from the outside, with some success and quite a bit of frustration, the electoral result of 2023 provides us with the opportunity to defeat all structures and apparatuses. The defeat of Horacio Rodríguez Larreta in the Juntos por el Cambio primary already proved that elections are not about who rolls more money into the campaign. Javier Milei’s triumph confirms that a small group without a great political structure but with grand ideas can defeat traditional players, especially if they are in tune with the media.

However, regardless of Milei's communicationally productive character, the space given to him in large media outlets was also due to the coincidence of ideas with many of their editorial lines. Yet undoubtedly the determining factor in the triumph was most of the population being fed up with the poor performance of representative democracy, which has not met many of its needs and expectations after 40 years: levels of poverty, inflation and foreign indebtedness once again are on our backs are some of the most relevant impacts, but also impunity of corruption and not listening to the citizenry are other issues which generated the will for deep change.

All of us Argentines are expecting the economic measures of Milei’s brand-new government, aware of the exclusionary situation of most of our compatriots and urgency of the need to curb inflation. Irrespective of the efficacy of the discourse of the brand-new president to generate adherence and popular support when assessing the specific measures, we are noting contradictions and changes from many of his campaign promises.

We might say the “anarcho-capitalist” revolution Milei promised is over. It never got started. The measures announced by Economy Minister Luis Caputo stray far from the president’s inauguration speech. Will it be “Macri’s bear hug” or “Baglini’s theorem”?

In his speech, Milei stated he would not spend more than Argentine receives in revenue, and that the rest of the prices were up to the market. A few weeks ago they said that the main problem was financial and they spoke of the “Leliq bomb.” However, they have announced something horrible for the real economy and nothing for the monetary economy, which was supposedly the most serious case, and made announcements which will lead to the destruction of the production sector.

The new minister said nothing about the 15 to 17 points of total fiscal deficit. He made cosmetic announcements about savings in superfluous expenses and shrinking of the State, but the few points included in those savings will be eaten by the increases in universal child allowance, the Alimentar food-stamp card and any other social “containment” policy.

We are worried about the abandonment of public works, but the most serious thing is closing off exports, imposing duties on the national industry and regional economies, which will also see increased prices of supplies.

The official dollar exchange rate at 800 pesos involves a 118-percent depreciation of the peso against the dollar. The abrupt devaluation and elimination of energy and transport subsidies will have an impact on prices. You can devaluate, but if you do not offset it with duties, everything will be transferred onto the price of food. There will be brutal price increases ahead. That will also involve a new increase in poverty by over 10 percent. 

Another core issue is the end of tenders to purchase food by the Social Development Ministry, which was a great buyer of small producers.

On the other hand, they are talking about eliminating the removal of income tax for workers – a bill voted for by Milei himself as a deputy just a few months ago –  and they have announced an increase of the PAIS tax at the new dollar rate (it would go from seven to 17.5 percent). This contradicts a core concept of Milei’s campaign: his rejection of the taxes “suffocating” Argentina.

The austerity for pensions will be very big, although this was not discussed in the announcement video. This is a very limited plan. They are following the instruction manual to comply with debt payments they themselves created by flouting the International Monetary Fund guidelines with impunity. However, with what they are proposing, they will still be short.

The great winners from yesterday’s measures will be, as always, the financial sector and to some extent the soy sector of the Pampas. Yet it will be a great blow for informal workers, freelancers, and the industrial and general production sector. Liberalism is back in the State at the hand of Macri’s men. Neoliberalism once again uses the State to favour the business of a few.

We need to build an alternative which generates a new utopia. We must be on the side of those who need it most to soften the consequences of this new plan. We have to inform and socialise political analysis. We can all take part in that new collective construction expressing workers, encouraging real economy, promoting SMEs and re-industrialising in a global context which allows it.

We have to leave behind financial colonialism and the “poor development” extractivist model. It will depend on our capacity to organise from the civil society and the reconfiguration of alliances.


* María José Lubertino is a lawyer and politician who previously served as an elected member of the Buenos Aires City Legislature and the head of the INADI anti-discrimination watchdog.

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María José Lubertino

María José Lubertino

Doctora de Derecho y Profesora de Derechos Humanos UBA. Presidenta de la Asociación Ciudadana por los Derechos Humanos. Integrante de la Red de Defensoras del Ambiente y el Buen Vivir.


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