The victory of Argentine President Mauricio Macri's ruling coalition, Cambiemos, in elections Oct. 22 cleared a path for economic proposals that will gradually liberalize Argentina's economy. But the reform efforts will still face strong political opposition. Undeterred, Macri announced Oct. 30 that his government will present proposals this week for tax, labor, and pension reforms.

Simplifying Argentina's tax system to stimulate investment is the first task Macri plans to tackle. The president said his tax reform proposals will reduce taxes for companies, while increasing taxes on profits gained by individuals on government bonds. But while Macri's tax reform has a decent chance of passing Congress, passing pension and labor reforms will be more difficult against pushback from politically influential labor unions. Despite Macri's legislative gains in the recent election, Congress may have to implement the controversial labor and pension reforms through piecemeal legislation.

In exchange for reformed labor regulations, Macri could grant amnesty to companies that hired their workers without respect to current labor laws. But pension reform promises to be Macri's thorniest political battle. Because Macri's government does not have a majority of seats in Congress, his coalition will have to negotiate with some opposition lawmakers to pass the reform. Leaders of opposition political parties such as congressman Sergio Massa have already expressed that they will vote against Macri's plan to alter the pension system. Yet, pension reform will be vital to reducing Argentina's fiscal deficit, which is set to soon surpass four percent of gross domestic product. 

With the Oct. 22 legislative election behind him, Macri now must stimulate the economy enough to achieve economic liberalization. If the economy does not pick up before the 2019 presidential election, opposition parties could unseat Macri and reverse his economic reforms. The last two years of Macri's presidential term will determine not only if Macri can remain in power but also whether Argentina can sustain its journey toward economic liberalization.