Opinion: Milei hit the ground running in his first week as Argentina’s president
Argentina’s new libertarian President Javier Milei’s first week in office has been better than many international analysts had expected.
While it’s too early to tell whether his drastic austerity measures will fix the economic disaster he inherited from his predecessor, Milei is moving at full speed to re-insert Argentina in the global economy. That’s good news for a traditionally inward-looking country that desperately needs foreign loans and investments.
In his first day in office after his Dec. 10 inauguration, Milei formally submitted Argentina’s application for membership to the Organization for Economic Co-operation and Development (OECD,) a club of mostly developed economies that sets standards for better economic policies.
While it may take as long as seven years for Argentina to be accepted as an OECD member, it sends an important message that Argentina is willing to adhere to the developed world’s norms. It’s no trivial matter for a country that has repeatedly defaulted on its foreign debts, and has little international credibility.
“We want to join international frameworks that lead us to behave less erratically,” Milei’s newly appointed secretary for international economic relations Marcelo Cima told me. “As a country, we have to start being more predictable.”
In addition, Milei plans to be a star speaker at the Jan. 15 annual World Economic Forum meeting in Davos, Switzerland, an annual gathering of some of the world’s top business and economic leaders.
Milei, who claims to be “the first free market libertarian presidentin the history of humanity,” is likely to present himself at the Davos meeting as a much more businessfriendly leader than his counterparts in Mexico, Brazil, Colombia, and other Latin American countries.
Judging from what I heard in interviews with several top Milei government officials, his economic team is beginning to study a possible “investment promotion and protection law” to encourage investments.
On foreign trade, one of the new government’s top priorities will be to speed up ongoing talks for an agreement between the five-country South American Mercosur trade bloc and the 27-country European Union.
Milei also plans to join
President Biden’s Americas Partnership for Economic Prosperity agreement with Latin American and Caribbean nations. While the deal doesn’t offer greater market access to Latin American goods, it seeks to generate new investments, and to compete with China’s growing economic and political influence in the region.
In another major foreign policy decision, the Milei government has said it will suspend Argentina’s previous government’s decision to join the
BRICS, a largely political group made up of Brazil, Russia, India, China and South Africa.. “We will not join the BRICS,” Argentina’s foreign minister Diana Mondino wrote on X, formerly Twitter, on Dec. 10.
Mondino told me in a recent interview that the Milei government will also seek to “modernize” the Mercosur agreement of Argentina, Brazil, Paraguay, Uruguay and Bolivia.
During the campaign, Milei vowed to withdraw from the South American trade deal, because it does not allow member countries to individually negotiate bilateral free-trade agreements with third parties. But Milei has since moderated his stand and now seeks to change Mercosur’s operating rules from within.
All of these foreignpolicy steps mark a sharp contrast with Argentina’s previous Peronist government, which showed a greater interest in attending Third World political summits than in attracting foreign investments.
While former President Alberto Fernandez attended last year’s Summit of the Americas in Los Angeles, his performance there was an embarrassment. Instead of taking advantage of the opportunity to woo foreign investors, Fernandez spent much of his time berating the Biden administration for not inviting Cuba’s dictatorship to the meeting.
Alejandro Werner, a former head of the International Monetary Fund’s Western Hemisphere department, told me that Milei’s first week in office has been “better than expected.”
“They have moved very fast, and better than many had thought,” Werner said, referring to the new president’s economic and foreign policy measures. “The previous government had never sought such a clear alignment with developed countries.”
I agree. Milei faces enormous obstacles at home, because resistance to his austerity measures is likely to grow in coming months as people feel the full brunt of his belt-tightening program.
But if Argentina gets out of its financial crisis, reinserts itself in global markets and resumes economic growth, Milei may change history in his country and, perhaps, in neighboring nations, as well.