Thursday, April 18, 2024

ECONOMY | 12-12-2023 21:42

The 10 ‘emergency economic measures’ announced by Luis Caputo

Economy Minister Luis Caputo announced the devaluation of the peso by over 50 percent to the dollar, as Javier Milei's new government seeks to tackle the country's deep economic woes.

Economy Minister Luis Caputo declared Tuesday that Argentina's new government "is facing the worst inheritance" in the country's history.

With "Argentines increasingly poor" and soaring consumer prices piling further misery on the population, Javier Milei's point man for the economy presented 10 emergency economic measures to tackle the crisis.

"If we carry on like this, we’re heading towards hyperinflation," warned Caputo in a pre-recorded video.

The minister explained that the genesis of the problem "has always been the fiscal deficit … making it fundamental to solve our problem of addiction to fiscal deficits," also pointing out that the government has come along to tackle "this problem at root in order not to have to suffer more inflation and poverty."

"This is the correct path," he said, listing the following 10 main measures of the package:


► State labour contracts: the Economy minister announced that "state labour contracts made in the last year will not be renewed," calling this "a habitual political practice of incorporating friends and family before the end of a presidential term."

► The suspension of national government advertising for a year. "There is no money for expenses which are not strictly necessary and far less to sustain with tax-payer funding media which were only created to sing the praises of the incumbent government," he said.

► The ministries will be halved from 18 to nine and the secretariats from 106 to 54. "This will work out to a reduction of over half of senior political positions and 34 percent of the total political posts of the national state," he explained.

► Reduction of transfers to the provinces to a bare minimum. "We will reduce the discretionary transfers of the national state to the provinces to a minimum. Funds which, unfortunately, have been used in our recent history to barter political favours." 

► The cancellation of public works tenders where the project has not yet begun: "The national state will not tender any new public works and will cancel those already approved where work has not yet begun," said Caputo, adding: "There is no money to pay for works which end up in the pockets of politicians and businessmen. Public works have always been a focus of state corruption and with us that’s going to end." 

► Reduction of the subsidies for energy and transport.

► The Potenciar Trabajo social plans will be maintained while boosting the social policies without intermediaries. "And above all we’re going to boost the social policies received directly by those who need them, without intermediaries, such as the AUH (Asignación Universal por Hijo) child benefit and the Tarjeta Alimentar food card," added the minister.

► An official exchange rate of 800 pesos per dollar: "The exchange rate will move up to 800 pesos, accompanied by a provisional increase of the Impuesto PAIS tax and increased non-agricultural export duties," said the minister.

► The SIRA import system will be closed down and replaced by a scheme whereby companies will not have to ask permission prior to their operations. "This takes the discretionary element out of the process of approving imports, guaranteeing transparency. Whoever wants to import can now do so, full stop," he said.

► Doubling the sums allocated in the AUH child benefit and the Tarjeta Alimentar food card. "This goes in line with what we were saying previously, that we’re going to boost the plans going directly to the people without intermediaries to the people who most need it," he explained.



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