In an incredible upset, far-right self-proclaimed “anarcho-capitalist” Javier Milei won Argentina’s presidential election. A successful economist and TV personality known for his political rants and unruly hair, Milei shocked the world with his win against Sergio Massa, Argentina’s center-left former economic minister. Milei’s election represents a radical shift in the country’s political ideology as the government transitions from the political center to the far right.
Milei’s electoral win reflects the growing desperation of the Argentinian population amid worsening economic conditions. For decades, Argentina has struggled with high inflation and poverty. Inflation currently runs at 140% with economists projecting that it will “reach 200% by early next year.” A recent report from the National Institute of Statistics and Censuses shows Argentina’s poverty rate has risen to a shocking 40.1%. High inflation combined with high poverty rates and a historic drought has pressured the cash-strapped Argentinian government to spend more on social welfare, further exacerbating its fiscal deficit and economic crisis.
During his presidential campaign, Milei promised sweeping economic and political reforms including shrinking the government, closing the Central Bank of Argentina, and adopting the US dollar as the new national currency. With the country already facing low currency reserves and an outstanding debt of $31 billion owed to the International Monetary Fund, Milei’s move to a dollarized economy will prove challenging, amidst claims that a “40 billion infusion of dollars” will be required to achieve this switch.
On a radio show, Milei colorfully explained the continued devaluation of the peso by asserting that “[t]he peso is the currency issued by the Argentine politician and therefore is worth less than excrement.” Although Milei argues dollarization will solve the inflation crisis, critics contend that not only does the central bank not have enough dollars to make the switch but also that, in doing so, Argentina will relinquish autonomy over its monetary policy to the U.S. Federal Reserve. This means that policy created by U.S. instutions to improve there economy, which has the best interest of their citizen in mind, will impact Argentina’s economic situation, at times adversaly. Milei plans on dissolving the Central Bank of Argentina, which he views as a “scam” that has contributed to the inflation crisis and will hinder his reforms. He also plans on reducing the number of governing ministries from eighteen to eight, including the elimination of the education and health ministries, to rid Argentina of the “political caste.” After decades of economic mismanagement, citizens turned to the polls and embraced Milei’s promise to “purg[e] the government of corrupt establishment politicians.”
Milei’s views on foreign relations also diverge sharply from his opponents, particularly towards the United States, Israel, China, and Brazil. In a press release, Milei claimed that he would only consider allying with countries that “fight against socialism,” noting the United States and Israel as desirable partners. In contrast, Milei has vocally opposed China, a crucial trading partner, claiming he would dissolve relations with the country and others for their “communist” regimes. In response, Mao Ning, China’s spokesperson for the Ministry of Foreign Affairs, criticized Milei stating, “[i]t would be a huge foreign policy mistake for Argentina to cut ties with major countries like China or Brazil. China is Argentina’s important trading partner ….” While Milei has since clarified his statements, claiming he does not believe in government intervention in trade relations which are “a matter for the private sector,” the future relationship between China and Argentina remains in question.
As a new presidency is ushered in, and with Argentina’s financial future at stake, the country and the world can only hope that Milei’s proposed radical changes are the elixir needed to fix this ailing country.
