Buenos Aires: The lower Chamber of Deputies of Argentina’s National Congress on Friday approved libertarian President Javier Milei’s controversial “omnibus” reform bill in a vote after several days of debate, paving the way for a decisive vote in the Argentinian Senate despite significant challenges remaining. The package was approved on a vote of 144 votes in favour and 109 against.
The reforms that make up the bill include the privatisation of state entities, measures to enable reductions in generous state subsidies as well as the extension of some executive powers, which created a massive furore among the public. Protesters opposed to the reforms have clashed repeatedly with riot police deployed outside the green-domed neoclassical congressional building.
Lower-house lawmakers will also vote on the legislation article by article, which is expected to begin on February 6, but the general approval means it will now likely proceed to the upper house in some form. The legislation marks Milei’s first test since taking office in December after a shock election win.
Why is the bill contentious?
The approximately 300 changes would earmark many government companies for privatization, and loosen protections for renters, employees and shoppers. The steps also include a 50 per cent devaluation of the Argentine peso, cuts to energy and transportation subsidies, and the closure of some government ministries.
According to Milei, the decree aims to return freedom and autonomy to individuals and “start dismantling the enormous amount of regulations” that have hindered the economic growth of Argentina. The reforms also include plans to privatise the state-owned companies. The decision was met with surprise and criticism from farm groups who said that such a decision would negatively impact the industry.
The mammoth bill is a key plank of Milei’s reform plans for Argentina’s battered economy, which is grappling with inflation above 200 per cent, depleted foreign currency reserves and a time bomb of debt repayments owned to creditors and investors.
A victory for Milei’s policies
Milei’s La Libertad Avanza party only holds a small number of seats in the 257-seat chamber, but was still able to muster enough support from likeminded allies including from the main center-right Juntos por el Cambio coalition of parties to advance the bill. The vote of approval came after fierce debate in the lower chamber as the main center-left Peronist opposition bloc, Union por la Patria, voicing fierce rejection of Milei’s policies.
Last week, Milei’s government yanked some divisive spending reforms contained within the fiscal section from the bill in what turned out to be a successful maneuver to boost support for it. Milei had promised a dramatic change in Argentina’s policies, including doing away with the central bank and cutting down government spending by closing some of the ministries.
Argentina’s inflation levels reached a painful height of 142% this year and an increase of 40% in inflation levels, prompting public disillusionment and Milei’s victory in the presidential elections. His aggressive rhetoric throughout the campaign, including carrying chainsaws in public rallies, drew parallels with ex-US President Donald Trump.
(with inputs from Reuters)
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