First measures announced by Economy Minister Luis Caputo; Official dollar moves from around 400 to 800 pesos per greenback, among host of other measures.

President Javier Milei's government launched a major devaluation of the peso on Tuesday and a host of other measures as it attempts to head off a major economic crisis.

Economy Minister Luis Caputo, speaking in a delayed pre-recorded message, said that the peso would pass to 800 per United States dollar – a devaluation of more than 50 percent.

"The official exchange rate will go to 800 pesos" to the US dollar, up from 391 pesos earlier in the day, Caputo announced as part of a raft of "shock" measures to tackle triple-digit-inflation and cut spending. He also announced a reduction in the state's generous subsidies of fuel and transport, without saying by how much.

Caputo announced around 10 measures in total, with most dedicated to slashing government spending. They included pre-announced steps like halving the number of government ministries and slashing secretariats. Money transfers to provincial governments (“discretionary transfers”) will also be trashed while all ongoing public works projects without external financing will be immediately suspended. “State employment contracts which have been in force for less than a year will not be renewed," said Caputo.

Other spending cuts he announced include the suspension of all state advertising for a year – which, he said, had cost 34 billion pesos in 2023. Subsidies for transport and energy services – huge expenditure for Argentina's government – will also be slashed, he said, without providing further details. “This is the correct path,” declared Caputo, warning that continuing the status quo would lead Argentina into an even deeper crisis.

“We have to avoid catastrophe,” he said, due to “the worst inheritance” in the nation’s history. Echoing the line Milei used often on the campaign trail and in his inaugural speech, the minister declared: "There is no money." Moments before the announcement, the new Central Bank Governor Santiago Bausili summoned representatives from all the nation’s banks to a meeting scheduled for 9am Wednesday.

This is an important bit. Milei's last efforts during the campaign were to coin the phrase "No hay más plata" (There's no more money). According to him, and to the libertarians, the state's treasury is completely dry and there's no cash for anything other than "the essentials". This means, for example, all public works are to be halted and taken over by the private sector. This might also serve as the basis for future massive privatizations, since the state "must get money", therefore it will be "necessary" to privatize as many state services as possible...

IMF approval

In an attempt to compensate for the loss of purchasing-power, Caputo said the government would raise child benefit and food stamp payments by 50 percent. There was no word on any measures to protect the retired and elderly, a sector of the population which will be hit hard by the new measures.

While Caputo announced the exchange rate would slide to 800 pesos to the dollar, from about 391 in recent days, there was no immediate mention of the lifting of strict currency controls which have birthed a multitude of dollar exchanges and a thriving black-market where the dollar has sold for up to three times the official rate at times. Argentina’s government has for years strictly controlled the exchange rate of the peso to the dollar, which analysts have derided as an expensive fiction. The announcements won the immediate approval of the International Monetary Fund (IMF), which said the austerity was "aimed at improving public finances."

“IMF staff welcome the measures announced earlier today by Argentina’s new Economy Minister Luis Caputo. These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthens the foreign exchange regime. Their decisive implementation will help stabilise the economy and set the basis for more sustainable and private-sector led growth," read a statement signed by IMF Communications Director Julie Kozack. "IMF staff and the new Argentine authorities will work expeditiously in the period ahead. Following serious policy setbacks over the past few months, this new package provides a good foundation for further discussions to bring the existing Fund-supported programme back on track," it concluded.

'Economic disaster'

In his recorded message – which included a lengthy opening section in which Caputo tried to explain the rationale for the measures – the minister attempted to underline the severity of the “economic disaster” facing Argentina. The minister said the country had an "addiction" to spending to more than it earns, and had posted a fiscal deficit for 113 of the past 123 years.

Consumer prices have risen by more than 140 percent over the last 12 months and more than 40 percent of the population lives below the poverty line. “The fiscal deficit exceeds 5.5 points of gross domestic product with a Central Bank with an absolutely deteriorated balance sheet, without dollars in its assets and printing money of more than 20 points of GDP, thus causing inflation to currently sail at 300 percent per year and punish Argentines every day,” claimed Caputo.

He assured that the genesis of the problem "has always been the fiscal deficit," as he outlined the package of economic measures. "If we continue as we are, we are inevitably heading towards hyperinflation," he declared. "What we come to do is the opposite of what has always been done... to solve this problem at root, precisely so that we do not have to suffer these consequences anymore," said Caputo. In relation to discretionary transfers from the National State to the provinces, Caputo maintained that they will be reduced "to a minimum" and added that these are "funds which, unfortunately, in our recent history have been used as a bargaining-chip to exchange political favours".

With regard to public works, Caputo announced that "the National State will not tender any more new public works and will cancel the approved tenders whose development has not yet begun."

"The reality is that there is no money to pay for more public works which, as all Argentines know, often end up in the pockets of politicians or businessmen on duty." Presidential Spokesman Manuel Adorni had attempted to highlight the inheritance received by the Milei administration in his daily press conference and anticipated some of the announcements, such as a complete suspension of state advertising in media outlets.

"The measures will be in line with a strong fiscal cut, with some expansion in social items and this package will be accompanied by the removal of privileges," trailed the spokesman. Caputo's presentation was made after markets closed. Reaction is likely to come thick and fast on Wednesday morning. Local reporting said a first take at the video had been rejected by Caputo and others in Milei's government. The video was reportedly re-recorded and eventually released two hours after initially planned.

Milei's vow

Upon taking office last Sunday, Milei vowed to introduce a set of emergency measures he argued would save the country from “hyperinflation.” The 53-year-old libertarian and self-described "anarcho-capitalist" took office on Sunday vowing to slash public spending, warning the situation was likely to get a lot worse before it gets better. Annual inflation is currently at 140 percent and poverty levels at 40 percent in Latin-America's third-biggest economy. Milei has vowed to cut spending by five percent of gross domestic product and has already streamlined the government from 18 ministries to nine. Recent governments have been heavy on intervention in prices and currency controls, welfare handouts and subsidies of fuel and transport – bus tickets cost only a few dollar cents.

During his campaign Milei's main vow was to ditch the peso for the US dollar and shut down the Central Bank. However, with little power in Congress he has been forced to ally with members from the right-wing PRO party and has watered down some of his more fiery stances. Milei and his government have doubled down on the message that inflation, and the general economic situation, will worsen significantly before they get better. "We are going to be in poverty, and the situation is going to be much harder," said teacher Gabriel Álvarez, 57, reacting to the announcements.

By MELANIE LIDMAN

JERUSALEM (AP) — Israeli soldiers rummaging through private homes in Gaza. Forces destroying plastic figurines in a toy store, or trying to burn food and water supplies in the back of an abandoned truck. Troops with their arms slung around each other, chanting racist slogans as they dance in a circle.

Several viral videos and photos of Israeli soldiers behaving in a derogatory manner in Gaza have emerged in recent days, creating a headache for the Israeli military as it faces an international outcry over its tactics and the rising civilian death toll in its punishing war against Hamas.

The Israeli army has pledged to take disciplinary action in what it says are a handful of isolated cases.

Such videos are not a new or unique phenomenon. Over the years, Israeli soldiers — and members of the U.S. and other militaries — have been caught on camera acting inappropriately or maliciously in conflict zones.

But critics say the new videos, largely shrugged off in Israel, reflect a national mood that is highly supportive of the war in Gaza, with little empathy for the plight of Gaza's civilians.

"The dehumanization from the top is very much sinking down to the soldiers," said Dror Sadot, a spokeswoman for the Israeli human rights group B'Tselem, which has long documented Israeli abuses against Palestinians.

Israel has been embroiled in fierce combat in Gaza since Oct. 7, when Hamas militants raided southern Israel and killed about 1,200 people, mostly civilians, and took about 240 hostages.

More than 18,400 Palestinians have been killed in Gaza, around two-thirds of them women and children, according to the Health Ministry in the Hamas-controlled territory. About 90% of Gaza's 2.3 million people have been displaced within the besieged territory.

The videos seem to have been uploaded by soldiers themselves during their time in Gaza.

In one, soldiers ride bicycles through rubble. In another, a soldier has moved Muslim prayer rugs into a bathroom. In another, a soldier films boxes of lingerie found in a Gaza home. Yet another shows a soldier trying to set fire to food and water supplies that are scarce in Gaza.

In a photo, an Israeli soldier sits in front of a room under the graffiti "Khan Younis Rabbinical Court." Israeli forces have battled Hamas militants in and around the southern city, where the military opened a new line of attack last week.

In another photo, a soldier poses next to words spray-painted in red on a pink building that read, "instead of erasing graffiti, let's erase Gaza."

A video posted by conservative Israeli media personality Yinon Magal on X, formerly Twitter, shows dozens of soldiers dancing in a circle, apparently in Gaza, and singing a song that includes the words, "Gaza we have come to conquer. … We know our slogan – there are no people who are uninvolved." The Israeli military blames Hamas for the civilian death toll, saying the group operates in crowded neighborhoods and uses residents as human shields.

The video, which Magal took from Facebook, has been viewed almost 200,000 times on his account and widely shared on other accounts.

Magal said he did not know the soldiers involved. But the AP has verified backgrounds, uniforms and language heard in the videos and found them to be consistent with independent reporting.

Magal said the video struck a chord among Israelis because of the popular tune and because Israelis need to see pictures of a strong military. It is based on the fight song of the Beitar Jerusalem soccer team, whose hard-core fans have a history of racist chants against Arabs and rowdy behavior.

"These are my fighters, they're fighting against brutal murderers, and after what they did to us, I don't have to defend myself to anyone," Magal told The Associated Press.

He condemned some of the other videos that have surfaced, including the ransacking of the toy store, apparently in the northern area of Jebaliya, in which a soldier smashes toys and decapitates a plastic figurine, as destruction that is unnecessary for Israel's security objectives.

On Sunday, the Israeli military's spokesman, Rear Adm. Daniel Hagari, condemned some of the actions seen in the recent videos. "In any event that does not align with IDF values, command and disciplinary steps will be taken," he said.

The videos emerged just days after leaked photos and video of detained Palestinians in Gaza, stripped to their underwear, in some cases blindfolded and handcuffed, also drew international attention. The army says it did not release those images, but Hagari said this week that soldiers have undressed Palestinian detainees to ensure they are not wearing explosive vests.

Osama Hamdan, a top Hamas official, aired the video of the soldier in the toy shop at a news conference in Beirut. He called the footage "disgusting."

Hamas has come under heavy criticism for releasing a series of videos of Israeli hostages, clearly under duress. Hamas militants also wore bodycams during their Oct. 7 rampage, capturing violent images of deadly attacks on families in their homes and revelers at a dance party.

Ghassan Khatib, a former Palestinian Cabinet minister and peace negotiator, said he can't remember a time when each side was so unwilling to consider the pain of the other.

"Previously, there are people that are interested in seeing from the two perspectives," said Khatib, who teaches international relations at Beir Zeit University in the West Bank. "Now, each side is closed to its own narrative, its own information, rules, and perspective."

Eran Halperin, a professor with Hebrew University's psychology department who studies communal emotional responses to conflict, said that in previous wars between Israel and Hamas, there may have been more condemnation of these types of photos and videos from within Israeli society.

But he said the Oct. 7 attack, which exposed deep weaknesses and failures by the army, caused trauma and humiliation for Israelis in a way that hasn't happened before.

"When people feel they were humiliated, hurting the source of this humiliation doesn't feel as morally problematic," Halperin said. "When people feel like their individual and collective existence is under threat, they don't have the mental capacity to empathize or apply the moral rulings when thinking about the enemy."