Javier Milei's revolution

Some of the most successful attempts at free-market reform in the last half-decade faced terrible odds. But several factors — the depth of the crisis, visionary leadership, policy consistency and a bit of good luck — helped them through. That was the case, for instance, of New Zealand in the 1980s and early 1990s, Thatcher’s Britain in the 1980s, Estonia in the early 1990s and Ireland in the late 1980s and the 1990s.

If Argentina´s Javier Milei defeats the entrenched interests, he will go down in history alongside those reformers — and even ahead of some of them. Those interests include a large part of Argentina’s Congress, the courts, unions, media, academia and some of the business community.

That is why Milei — who inherited an inflation of more than 200%, a central bank with no reserves, a shrinking economy, a debt amounting to 85% of gross domestic product (including $46 billion owed to the International Monetary Fund) and a poverty rate not far from 50% — needs

to produce some early results that give the 60% of the population supporting him a reason to keep the faith despite the inevitable pain that comes from undoing decades of populism.

Milei is often described by the international media as a right-wing populist like Hungary’s Orban, Brazil’s Bolsonaro or even Donald Trump. Although he shares their commitment to the cultural fight

against the left and has a confrontational style as well as an eccentric personality, this bright economist steeped in the Austrian school of economics departs from them in his understanding of republican institutions and his devotion to comprehensive free-market reform. He models himself on Juan Bautista Alberdi, the intellectual and politician who inspired the 19th-century constitution that turned Argentina into an economic powerhouse long ago.

Milei has begun his tenure by delivering anti-inflationary shock therapy that includes a 54% devaluation of the peso, killing pending government construction projects and lifting price controls while he wrestles with colossal amounts of short-term debt issued by the central bank, a major source of monetary expansion in recent years. He has also issued a mega-decree using a Peronist constitutional provision the Peronists themselves resorted to hundreds of times. Yet the Peronists now accuse Milei of using authoritarian methods. Still, the decree, which deregulates and liberalizes areas such as trade, labor, real estate and retail, needs to pass through Congress.

For the moment Milei has put aside the plan to abolish the central bank and adopt the dollar as legal tender (or let the market pick the currency) but insists he will take up the plan once the economy is stabilized. Another inconsistency to which some critics point is that his omnibus

MARKUS SCHREIBER — THE ASSOCIATED PRESS Argentina President Javier Milei makes his way through the crowd of reporters and supporters after delivering his speech at the Annual Meeting of World Economic Forum in Davos, Switzerland, on Wednesday.

RODRIGO ABD — THE ASSOCIATED PRESS Supporters of Argentina’s incoming President Javier Milei gather outside the Congress prior to his swearing-in ceremony in Buenos Aires, Argentina, on Dec. 10.