Future president: ultra-liberal Milei wants to turn Argentina around
Published: Monday, Nov 20th 2023, 16:41
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Following his clear victory in the presidential election in Argentina, the ultra-liberal populist Javier Milei has announced a radical turnaround in the South American country. "The reconstruction of Argentina begins today. There is no room for partial steps, lukewarmness or half measures", said the self-proclaimed "anarcho-capitalist". "If we don't make rapid progress with structural changes, we are heading straight for the worst crisis in our history."
The candidate from the La Libertad Avanza (Freedom Advances) party came out on top after the run-off election with 55.69%, well ahead of Economy Minister Sergio Massa from the left-wing Unión por la Patria (Union for the Fatherland) with 44.30%, as announced by the electoral office on Monday. He will take office on December 10. Above all, the frustration of many Argentinians over the ongoing crisis and anger at the political establishment are likely to have helped the outsider Milei to win the election.
In the midst of a severe economic crisis, he is promising a change of course: he wants to introduce the US dollar as legal tender, abolish the central bank and many ministries and cut social spending. "No one with such extreme views on economic issues has ever been elected president of a South American country," said economist Mark Weisbrot from the US research institute Center for Economic and Policy Research. "He barely recognizes a legitimate role for government in some of the key policy areas that most people see as necessary for a democratic, humane and stable society."
On Monday, Milei announced the privatization of state-owned companies. "Everything that can be in the hands of the private sector will be in the hands of the private sector," he said. Among other things, Milei wants to privatize the state-owned energy company YPF, public television and radio as well as the official news agency Télam.
"The first announcements of Milei's policies will please the markets, with aggressive fiscal consolidation and the abolition of foreign exchange and capital controls being the biggest priorities," said Thierry Larose, portfolio manager at Swiss asset manager Vontobel. In fact, the financial markets reacted positively to the election result. Shares in Argentinian companies on the New York Stock Exchange rose by 23 percent at one point, while government bonds rose by 6 percent.
Milei is considered an eccentric who has really shaken up Argentinian politics: He wants to liberalize gun ownership, is against the right to abortion, does not believe in man-made climate change and calls Argentina's Pope Francis a communist. Like former US President Donald Trump and former Brazilian head of state Jair Bolsonaro, he uses anti-system rhetoric, but unlike his role models, he refrains from right-wing extremist outbursts and is in favor of same-sex marriage, for example.
His future vice president Victoria Villarruel, on the other hand, caters to the conservative clientele, cultivates contacts with right-wing groups around the world and repeatedly provokes with statements about the military junta (1976-1983). The daughter of an officer casts doubt on the number of deaths during the dictatorship, estimated by human rights organizations at 30,000, and insists on more recognition for the victims of left-wing guerrilla groups.
South America's second-largest economy is in a deep economic crisis. The inflation rate is over 140 percent and around 40 percent of people in the once rich country live below the poverty line. Argentina suffers from a bloated state apparatus, low productivity in industry and a large shadow economy that deprives the state of many tax revenues. The national currency, the peso, continues to lose value against the US dollar and the mountain of debt is constantly growing.
The election victory of the internationally inexperienced Milei is likely to initially cause uncertainty on the global stage. During the election campaign, he had announced that he wanted to break off relations with the two most important trading partners, China and Brazil, for ideological reasons. However, China of all countries has now reached out to him. "China has always attached great importance to the development of Sino-Argentinean relations from a strategic and long-term perspective," said Foreign Office spokeswoman Mao Ning. China is willing to revive the win-win cooperation between the two countries.
German Agriculture Minister Cem Özdemir, on the other hand, saw difficulties for the trade agreement between the EU and the South American economic alliance Mercosur following Milei's election victory. "It's not getting any easier, the environment is getting more difficult", said the Green politician in Brussels. The election shows that we have to hurry, populism is getting stronger "there as well as here".
Despite all the radical rhetoric, many observers assume that Milei will not be able to implement many of his demands in full. He does not have a majority in parliament, his camp does not have a single provincial governor and he lacks qualified personnel to fill important key positions. He has recently softened his tone somewhat and made contact with the traditional conservative forces in the country in order to fill the gaps.
However, if he really does take the axe to the social programs on which many Argentinians depend, his political opponents could make life really difficult for him: The left-wing Peronists are well organized via trade unions, social movements and party structures, right down to the smallest communities, and are in a position to paralyze Argentina with protests against the new government at any time.
©Keystone/SDA
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