Despite the current crisis that deeply affects all Argentines, we must not lose sight of the long term. President Javier Milei has demonstrated a deep understanding of the crucial role of freedom in overcoming Argentina's prolonged stagnation. And, with conviction, his government has begun to take the necessary actions to crystallize this change of course.
In just one month, he halved the number of ministries and cut the number of political officials in the national government by a third. He pledged a historic reduction in the fiscal deficit of 5.2% of GDP. And it reached an agreement with the IMF that reduces uncertainty in the face of a delicate financial situation. But perhaps most importantly, he introduced an ambitious package of structural reforms, through the DNU and the Omnibus Law, which rightly aims to restore freedoms to Argentines.
Our preliminary analysis at Fundación Libertad y Progreso offers a hopeful vision for our country.
If most of the key reforms are implemented, Argentina would climb about 90 places in the Heritage Foundation's annual Index of Economic Freedom, from 144th to 50th out of a total of 55 countries evaluated. This jump symbolizes more than a numerical improvement in a ranking, it is a testament to Argentina's latent potential to reshape its economy and society.
Currently, Argentina is in an unfavorable position, among the "Mostly Not Free" countries, whose average income is only USD 12,381 per person. This bleak picture could be drastically transformed by the proposed reforms. Argentina could join the "Moderately Free" countries, where the average per capita income is more than double that, at about $29,419.
The proposed reforms involve a comprehensive review of current policies. The Decree of Necessity and Urgency 70/23, the Bill "Bases and Starting Points for the Freedom of Argentines" and the fiscal program of the Ministry of Economy are pillars of this transformation. These measures seek not only to improve economic indicators, but also to restore trust and fundamental freedoms.
Our analysis assumes that, after initial stabilization, reforms will be completed, including the elimination of capital and exchange controls, popularly known as "cepo," restoring monetary and exchange rate freedom, and reducing taxes as much as possible. These are vital to regain the confidence of investors and economic actors, both national and international.
With these reforms, Argentina would not only improve its position at the global level, but also in the Latin American context. The country is projected to slightly outperform Colombia and Mexico in terms of economic freedom, moving closer to nations such as Chile, Costa Rica, Uruguay, and Peru. At the global level, it would reach positions similar to Romania, Armenia or Spain, which have shown significant progress in their economic structures.
While the proposed reforms are an essential step toward economic freedom, significant challenges remain. The effectiveness of these measures depends on their implementation and the political will to sustain them in the long term.
In addition, it is essential to accompany them with second and third generation reforms, as these would allow Argentina to become a country with social mobility based on an excellent education and health system, the best way to reduce existing inequalities.
The road to greater economic freedom is complex and fraught with challenges, but the reforms proposed for Argentina represent a critical step in the right direction. By adopting these measures, Argentina would not only improve its position in the Index of Economic Freedom, but also open a path to truly inclusive and sustainable prosperity for all its citizens.
The key will be effective implementation and an unwavering commitment to fundamental freedoms, which are the foundation of any prosperous and free society.