Milei To Slash 70,000 Government Jobs To Reform Argentina’s Economy

March 28, 2024   |   Tags: , ,
Javier Milei | Esteban Osorio/Sipa USA/Newscom

Argentine President Javier Milei announced his plans to slash 70,000 government jobs in an effort to shrink government expenditure and reduce the national deficit to zero. The cuts are part of his broader strategy to achieve fiscal balance at any cost. 

Milei announced the cuts during his closing speech at the International Economic Forum of the Americas in Buenos Aires this week. 

Over 50,000 of Argentina's approximately 3.5 million public sector employees have already been dismissed, but more cuts were on the way. According to a statement by the presidential office, the remaining 70,000 new job terminations will proceed in stages, with at least 20 percent (14,000 jobs) expected to be cut by the end of March. The rest of the timeline will be announced in April.

The move has sparked significant backlash, particularly from Argentina's powerful unions. The Association of State Workers (ATE), one of the unions representing public employees, claimed that at least 10,000 state workers have already been let go as of Thursday. ATE leader Rodolfo Aguiar called the layoffs "illegal" and "unjustified" and called for a national strike on April 3. 

Beyond cutting jobs, Milei announced plans to halt public works, "something of which I am deeply proud, because public works are a great source of corruption, of theft, which I imagine all good people should oppose." He also said he was cutting funding from provincial governments and eliminating over 200,000 "irregular" social welfare plans.

Milei described his approach as a combination of a "chainsaw" and "a blender," both of which he claims are necessary for a rapid transformation of the economy. Argentina's inflation rate has reached a three-decade high at over 250 percent, with an estimated 57 percent of the country living in poverty. To end the economic crisis, Milei has slashed state subsidies, reduced the number of government ministries by half, closed state agencies, and devalued the peso by 50 percent.

The president anticipates a "V-shape" recovery for the economy, with short-term hardships before things get better. "There is a lot of talk that this is not sustainable. We did what we had to do and that implies doses of courage that others do not have," he said.

Milei's economic policies are showing early signs of success. In his speech, he highlighted how the peso's futures are aligning with the central bank's incremental adjustment strategy and that the central bank is moving toward net neutral reserves. 

Milei assured that he would move forward with reforms "in spite of the politics." He said that the Senate's recent rejection of his bills was an opportunity to expose corrupt politicians, those "who do not want to give up their jobs and seek to maintain their privileges." Looking ahead, the Argentine president said he plans to introduce 3,000 more reforms after the 2025 congressional elections.

The post Milei To Slash 70,000 Government Jobs To Reform Argentina's Economy appeared first on Reason.com.


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