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Argentina: Juntos presidential candidate Bullrich’s reform plan aims to order public accounts, simplify regulation

Argentina presidential candidate Patricia Bullrich, from the opposition Juntos coalition, is working on an integral reform plan that aims to “simplify” and “order” the country’s economy, according to two sources that participated in a presentation from Bullrich and her team during an event.

The presidential candidate and former Minister of Defense of Argentina spoke 18 April in front of more than 100 businesspeople and investors gathered in Bariloche for the Llao Llao Forum, an annual event hosted and organized by IRSA Chairman Eduardo Elsztain. Bullrich participated in the event along with her main economic advisor, Luciano Laspina, said both sources.

“She described a very concrete plan that involves a reform of the national and provincial administrations, of the tax system and of the Central Bank (BCRA),” the first source said. She stated that if elected, her government’s ruling principle will be “order”, the source said. She promised order for the local economy, but also order in terms of public life, regarding health, safety and education, the first source said.

Bullrich and Laspina “spoke about Argentina’s great potential and historical opportunity” to export and grow amid the war in Ukraine and the current global context, the second source said.

A first step towards achieving that potential would be to eliminate capital controls and FX restrictions, said the second source. The presidential candidate said that lifting those restrictions is “a priority” for her and that she would do it as soon as possible, as investments “won’t return to Argentina until that happens,” the source said.

Bullrich and her team believe that an elimination of FX restrictions in early 2024 could work similar to how it did in early 2015, when former president Mauricio Macri took office, said the second source. At that time, the Argentine currency depreciated at first but then it stabilized as the Macri administration generated confidence, said the second source.

In order to strengthen confidence in the ARS, Bullrich intends to send a law to reform BCRA as soon as she takes office, said the first source. Restoring BCRA’s independence and credibility is key, Bullrich said, according to the source.

Moreover, Bullrich intends to create a friendlier environment for private sector investment through a deregulation of the economy and a tax reform, said the first source. The candidate said her team is analyzing 3,600 laws, decrees and regulations in order to eliminate or simplify them. Additionally, tax pressure is to be reduced, eliminating Gross Income Tax and export-related taxes, said the first source. The candidate’s plan is to move forward with the largest “legal and regulatory decontamination ever done,” the source stated.

Regarding her planned labor reform, Bullrich said she is considering transforming social subsidies into unemployment insurance, the second source said. The candidate’s team is working on a census to quantify how many of the 3.5m people who collect a social subsidy also have an informal job, the source described. By reducing taxes and labor-related regulation, the government will create incentives for employers to formalize these workers and will progressively get them out of social welfare and into the labor force, according to the source.

A reduction of social subsidies will be one of the steps to stabilize public accounts, the second source said. Additionally, Bullrich plans to take on a reform of the state, simplifying public structures that are now “duplicated or triplicated,” seeking to increase efficiency, the source stated. This reform is expected to be carried out at the national level, but also at the provincial and municipal levels, the second source said.

Bullrich’s ideas were well received among business leaders, said both sources. Besides Laspina, the candidate’s team of economic advisors include Dante Sica, former Minister of Production and Labor during the Macri administration, senator and economist Ricardo Lopez Murphy and current president of Banco Santander in Argentina, Enrique Cristofani, said the sources.

A spokesperson for the candidate decline to comment on the matter.

Bullrich is set to compete against Horacio Rodriguez Larreta in the Juntos primary, as reported. The most recent polls of consultancy firms Management & Fit, Opina Argentina and Isonomia give Larreta a 10-percentage points advantage over Bullrich in the Juntos primary.

Larreta, as well as libertarian candidate Javier Milei are also expected to speak at the Llao Llao Forum, as reported. The Forum was scheduled to conclude 19 April.