While the details of the DNU (Decree of Necessity and Urgency) reform announced last night by President Javier Milei are still being examined, most economists express themselves in general terms who agree more with the contents than with the forms. “Everything that aims to ensure greater flexibility and eliminate regulations and bans helps the economy a lot,” said César Litvin on the one hand. But others, like Analytica’s Claudio Caprarulo, support it It would have been preferable for “such a radical change to pass through Congress and be discussed to give it sustainability.”
Andrés Borenstein, of EconViews, agrees with these two points of view. “I find the content interesting: the open skies policy, the repeal of the rent law, the deregulation of the labor market and car registrations, for example. But the method, doing it via DNU, gives me doubts. What stops another government from reversing changes with another DNU?“said the specialist.
Meanwhile, the director of Eco Go, Marina Dal Poggetto, also questions the opportunity of economic deregulation will have the political support to be validated by Congress. “It was necessary to eliminate pesos from the economy and create a different work pattern. But whether that was the case, I don’t know,” he wondered. The economist stressed the need to introduce corrections, although he clarified that “doing it this way is bold.” Dal Poggetto recalled that”those in the know question its legality” of the liberalization decree.
Milei, last night and on national television, announced an ambitious economic reform plan to be implemented a DNU of 83 pages and 366 articles). The President detailed and justified 30 measures, among which stand out the repeal of supply laws, rent laws, the “modernization of the labor regime”, the implementation of the open skies policy for the aeronautical sector and the repeal of the regulations. which prevents the privatization of state-owned companies. “There’s even more“Milei anticipated this morning, without providing further details.
Martín Kalos, from the consultancy firm EPyCA, questions the contents and forms of the mega package of measures. “It is a very messy DNU and prepared by a well-defined ideological line. “There are various regulations that provide for well-defined beneficiaries with names and surnames, mentioned by Milei himself, as in the case of Starlink (Elon Musk’s satellite company),” he said.
In this line, the economist highlights a contradiction: on the one hand, Industrial Promotion is eliminated, which is a regime from 1977, “which has marginal validity”, but warns that it is striking that “the other regimes are not touched or mentioned. ” , like that of Tierra del Fuego”.
“The DNU is ambitious and attacks some of the endemic problems of the Argentine economy. The topics covered are many: deregulation, state reform, labor market, foreign trade, bioeconomy, mining, energy, aviation, justice, healthcare, communications , tourism, car registration, sports and corporate legislation, among others”, lists a recent report by IERAL (Mediterranean Foundation).
Its authors, economists Jorge Vasconcelos and Maximiliano Gutiérrez, celebrated the deregulation plan and justified it as follows. “The phenomenon of stagflation that has lasted for many years in Argentina responds, to a significant extent, to the policies they have shaped extraordinary rigidity on the supply side, with an increasingly high-priced and restricted supply of goods and services. The latest announcements go in the direction of removing obstacles This put the country at a disadvantage when it came to competing and attracting investment,” they wrote.
Almost all opinions point in this direction. The most favorable ones aim for the relaxation or elimination of regulations, such as those on car registers, the Gondola Law, the Supply Law (enacted in 1974) and the more recent Rental Law. While questions prevail about the convenience of doing them via a DNU. “It is not yet clear whether this is a negotiation scheme or whether it is an all-or-nothing gamble.“says Dal Poggetto.
Litvin, a tax expert, believes that if these changes succeed “they could help the economy a lot and generate a virtuous circle”. The specialist explained that deregulations “can attract investment, generate greater activity, create employment and, in the long term, upward social mobility.” The same thing – he added – is what happened in Ireland, that “with modern labor legislation and a more reasonable tax burden, people’s living standards have improved in 10 years”. It is, he explained, “a short-term pain plan for future benefits.”
Finally, the economist and former ally of Milei, Carlos Rodríguez, expressed his support for the measures of X (formerly Twitter). “The legal framework in force until yesterday”, he writes, “represented a balance of distribution of power of a political caste which for 100 years has brought us to the current situation of backwardness and poverty. The DNU represents a blow to the distribution system and forms a possible basis to begin building a new Argentina for all good people”, he celebrated.
Source: Clarin
