Argentina jumps into unknown, electing far-right candidate Javier Milei as president

Jonathan Lopez

20-Nov-2023

SAO PAULO (ICIS)–Argentina’s far-right and libertarian candidate Javier Milei achieved a resounding victory in the presidential election on Sunday with more than 56% of the votes.

Milei’s Freedom Advances party (La Libertad Avanza) won in 21 of Argentina’s 23 electoral districts.

His rival, current economy minister Sergio Massa, from the centre-left Peronist Union for the Homeland (Union por la Patria) won 44% of the votes in the second round of the presidential election.

Massa had come first in the first round in October, but Argentinians tiredness of the current situation finally tilted the balance for the candidate who proposes to dollarise the economy and dismantle the central bank.

“Today begins the reconstruction of Argentina, today begins the end of the decadence. The impoverishing model of the omnipresent state comes to an end,” said Milei on Sunday, as quoted by Spanish daily El Pais.

“Today we embrace again the ideas of freedom, those of our founding fathers.”

REVERSAL OF PRETTY MUCH EVERYTHING
According to Milei, the current high annual rate of inflation – at nearly 143% in October – is the consequence of the central bank’s policy to print pesos to finance the Treasury’s public spending.

Moreover, Argentina is also currently receiving emergency funding from the IMF to sustain its public spending, piling up the country’s debt burden.

However, in order to dollarise an economy, a country would require large dollar reserves within the central bank, a situation which is not happening in any Latin American country, the IMF said in October, answering questions about Argentina.

Other economic proposals include withdrawing several state subsidies in a country which has become addicted to them, although this proposal could make poverty levels, currently at 40% of the population, rise even further.

Internationally, Milei proposes to leave the BRICS group of countries which Argentina had just been invited to join, because he considers the organisation formed by Brazil, Russia, India, China, and South Africa too tilted to the left.

Milei is a declared anti-communist and has publicly criticised both China and Russia. Argentina’s current administration has cultivated the relationship with China as a buyer of its commodities – grain, mostly – but also a source of funding.

Relations with Brazil, Argentina’s main trading partner, are also set to change as Milei has publicly criticised President Luiz Inacio Lula da Silva for also being too left wing.

Last week, an executive at Brazilian chemicals producer Unipar, with around a third of its business based in Argentina, said the situation in the country “remains very difficult” but hoped that the election of a new president may reverse its fortunes.

“I hear from our customers in Argentina that it will not get worse – simply because it can’t get worse,” said Alexandre Castro, director for PVC at the producer, in an interview with ICIS.

Front page picture source: Shutterstock

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