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24Jan24
A Nationwide Shutdown Tests Milei's Tough Medicine for Argentina
It has been six weeks since President Javier Milei took office in Argentina, and since then, gas prices have doubled, inflation has soared and the value of the national currency has plummeted.
Such turmoil, he had warned, should be expected. Fixing decades of economic problems would first require more pain, he said.
Yet on Wednesday, many Argentines took to the streets to show they have already had enough.
Argentina's largest labor unions called for a nationwide strike -- including workers in transportation, construction, health care, food services, energy and banking -- to protest Mr. Milei's planned overhauls, arguing they would weaken protections for workers and the poor.
Banks and many shops closed, doctors postponed surgeries, waste collection stopped and airlines canceled hundreds of flights, while thousands of people filled the streets in overwhelmingly peaceful demonstrations.
"I'm worried about the economy," said one protester outside Congress, Víctor Saragusti, 78, a retired office manager who receives the government's minimum retirement assistance. "The unions are the only ones that help and that are with the people, with the workers."
Ahead of the demonstrations, Mr. Milei said the strike showed that "there are two Argentinas" -- one stuck in the past and another that "puts us on the path to be a developed country."
More Argentines appear to agree with Mr. Milei. Despite the economic chaos, Mr. Milei's approval rating has stayed high, or even risen along with prices. Recent surveys show 58 percent of Argentines support him, two percentage points higher than his share of the November presidential vote.
In response, Mr. Milei, a libertarian economist and television pundit who rode a brash political style to the presidency, has been trying to capitalize on his political honeymoon by quickly overhauling as much of Argentina as he can.
After cutting spending, laying off public workers and devaluing the currency, he has turned his focus to sweeping legislation that would have consequences for the economy, elections, labor, public safety, the environment, the arts, science, health and even how Argentines divorce. The omnibus bill would also consolidate more power in his hands.
That has sparked the blowback from labor. The unions already won a preliminary injunction this month against some of Mr. Milei's efforts to amend labor laws via presidential decree, and now they aim to show their might with massive demonstrations on Wednesday.
Labor revolts have derailed government campaigns to make significant changes in Argentina before, but Mr. Milei is signaling that he will take a tougher stance against protests that turn disruptive. He has proposed docking the pay of government workers who partake in demonstrations, and increasing penalties against people who block roads so that they could face potential prison time.
He has also moved fast. In his first days on the job, Mr. Milei made deep federal spending cuts, laid off thousands of government workers and halved the number of federal ministries to nine from 18. He also officially devalued the Argentine peso by more than 50 percent, bringing the government exchange rate much closer to the market's measure of the currency -- but also causing prices to soar.
From November to December, prices increased 25.5 percent, compared with 12.8 percent a month prior.
Argentina's annual inflation rate is now at 211 percent, which puts the nation of 46 million roughly on par with Lebanon for the world's highest inflation. Argentina's prices are climbing faster than those in Venezuela, where years of economic collapse had led many Venezuelans to emigrate to Argentina. Now some are reconsidering.
"I'm seeing a lot of Venezuelans leave the country," said Andreina Di Giovanni, 35, a Venezuelan immigrant in Buenos Aires who owns a shop that sells Venezuelan food. "Some are migrating elsewhere; some are going back to Venezuela."
She said her business is struggling, with falling sales and rising costs, but she said it was too early to blame the new president.
Mr. Milei is hoping many Argentines are willing to give him a long leash to fix the country's long-running economic woes, and for now, some are going along.
Stella Body, 70, said she was technically retired but continues to work full-time as a cosmetologist to afford the rising prices. To her, it was a worthy sacrifice for Mr. Milei's plan. "We won't see positive outcomes for at least a year," she said. "Nothing can be fixed in a month."
Mr. Milei is also attracting support from conservatives abroad. Last week, he gave a speech at the World Economic Forum in Davos, Switzerland, in which he argued that unfettered capitalism is the only model to reduce poverty and that socialism, feminism and environmentalism threaten global progress by pushing government regulation.
"You are heroes," he told the Davos crowd. "You are the creators of the most extraordinary period of prosperity we've ever seen."
The speech went viral, promoted by various conservative and right-wing voices as a clear distillation of what was wrong with modern society.
"Good explanation of what makes countries more or less prosperous," Elon Musk said when sharing a video of the speech. Later, the billionaire posted a doctored image of a man watching Mr. Milei's speech while having sex, a post viewed 113 million times.
A Brazilian politician later posted that she played the speech for her unborn baby in the womb, and Donald J. Trump weighed in on his Truth Social platform, saying that Mr. Milei was "MAKING GREAT PROGRESS" in his effort to "MAKE ARGENTINA GREAT AGAIN!"
The International Monetary Fund, which is still owed the vast majority of a $44 billion loan program with Argentina, has also praised Mr. Milei, saying that he and his economic team have moved quickly to "rebuild reserves, correct relative price misalignments, strengthen the central bank's balance sheet, and create a simpler, rules-based, and market-oriented economy."
At the center of Mr. Milei's efforts to tackle the country's chronic financial troubles is the omnibus bill he is trying to push through Argentina's Congress.
With more than 500 provisions, the legislation would reduce regulations, weaken labor unions, privatize most state companies, eliminate election primaries, increase export taxes and remove some environmental protections. The bill would also give Mr. Milei emergency powers for at least one year to carry out his economic plans.
The sweeping measures are needed "to keep the current crisis from becoming a social catastrophe of biblical proportions," Mr. Milei said in an address to the nation when announcing the legislation. Congress "will have to choose whether it wants to be a part of the solution or to continue being a part of the problem."
Ricardo Gil Lavedra, a constitutional lawyer who has served as a congressman and Argentina's justice minister, said that, without significant congressional support, Mr. Milei appears to be trying to move quickly while he has high approval ratings, knowing soaring prices could give him a short window of time to act.
But packing so many provisions into a single bill, and moving to consolidate more power in the presidency, is worrisome, he said.
"It's impossible for people to have an idea of the enormous number of proposals Milei has sent," he said. "They cover dozens and dozens and dozens of laws, often on deep topics, so I think the population generally doesn't know what is being discussed."
Still, pushback from unions and Congress is a sign of democracy working, Mr. Gil Lavedra said. "We must cooperate with a new government facing a very difficult situation, which has the support of a large number of Argentines," he said. "But at the same time, we must keep Argentina within the framework of a constitutional democracy."
[Source: By Jack Nicas and Lucía Cholakian Herrera, The New York Times, Bs As, 24Jan24]
This document has been published on 10Feb24 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. |