Argentina: Javier Milei creates a new ministry to reduce the State, how will it work?

The ultra-liberal Argentine president Javier Milei created a new ministry whose mission will be to reduce the structure and cost of the Stateaccording to the decree published this Friday in the Official Gazette.

He Ministry of Deregulation and State Transformation will be in charge of the economist Federico Sturzeneggerhead of the Central Bank during the presidency of Mauricio Macri (2015-2019).

This economist, whom Milei defined as “the best on the planet”, is credited with designing a large part of the package of economic reforms contained in the Ley Bases, recently approved by Congress after six months of arduous legislative process and which represented the government’s first legislative victory.

According to the decree, the new ministry will be responsible for “deregulation, reform and modernization of the State with a view to resizing and reducing public spending, and increasing the efficiency and effectiveness of agencies.”

The Argentine economy is undergoing a severe recession, with year-on-year inflation of 280% in May and a 5.1% decline in gross domestic product in the first quarter compared to the same period last year.

Milei, who has defined the State as a “criminal organization” and himself as a “mole” that “destroys the State from within,” has implemented drastic budget cuts with the halting of public works, tens of thousands of layoffs, freezing of funding for education and health and cuts in pensions and social benefits in the context of a severe economic recession.

As a result, the government achieved its first fiscal surplus since 2008 in the first quarter of this year, but at the cost of growing social unrest, with two national strikes promoted by labor unions and more than half of the population living in poverty.

In this context, the president had explained last week, in statements to the press, that the new ministry will promote a law aimed at eliminating “a set of regulations that hinder the functioning of the economic system”without giving further details about its content.

Sturzenegger is sworn in on Friday after a week in which more than 3,000 public officials were fired, including 85 percent of the employees of the Ministry of Women, which was dissolved by the government. “There is no room for unnecessary expenses,” presidential spokesman Manuel Adorni said on Monday.

This also occurs during a week of nervous operations in the foreign exchange and financial markets, which resulted in a depreciation of the peso against the dollar, a fall in bond prices and a rise in country risk as measured by the S&P.

The Argentine economy is undergoing a severe recession, with year-on-year inflation of 280% in May and a 5.1% decline in gross domestic product in the first quarter compared to the same period last year.

Milei travels again to receive a shower of conservative affection in Brazil

Javier Milei has snubbed the Mercosur summit and will instead participate in a conservative forum this weekend in Brazil. With these showers of affection from his ideological peers, the Argentine president is positioning himself as the global leader of the most radical right, but at what cost?

Since taking office in December, Milei has made eight trips abroad, most of them to the United States and Europe, where he met with few leaders and instead participated in religious events or those of far-right groups that occasionally gave him awards.

But when the semi-annual summit of Mercosur presidents (Brazil, Argentina, Uruguay, Paraguay and now Bolivia, whose Congress approved its accession on Thursday) is held next Monday in Asunción, Milei gave signs of lack of interest in the regional bloc: he will not attend.

He has chosen a conservative conference this weekend in Brazil, where he will meet Jair Bolsonaro, the right-wing former Brazilian president and arch-rival of snubbed President Luiz Inácio Lula Da Silva.

“It has a political impact on Argentina, because on several of these trips he meets with opposition politicians and personalities from the country he is visiting,” political scientist Alejandro Frenkel of the National University of San Martin (UNSAM) told AFP.

On these trips, the irascible economist who must get Argentina out of a deep crisis claims that the State is a “criminal organization” and warns that “the West is in danger” because of the “advance of socialism.”

His critics question him for these visits, which they say appear more like private meetings than a matter of state.

“I am concerned about a president who goes around the world giving lectures on how to save Argentina instead of applying the art of doing it here and now,” said opposition deputy Rodrigo de Loredo in Congress last week.

This was how his visit to Madrid in May to the convention of the far-right party Vox was perceived, where he was applauded like a rock star and ended up exchanging insults with the head of the Spanish government, Pedro Sánchez.

These episodes have “an undeniable political effect,” Frenkel explained. “But it is not yet possible to establish indicators that could indicate whether the economic link between the two countries has also been affected.”