Argentina vote ushers in a Trump moment
President-elect Milei, an abrasive outsider, vows sweeping changes
Javier Milei was introduced to the Argentine public as a combative television personality with an unruly hairdo and a tendency to insult his critics. So when he entered Argentina’s presidential race last year, he was viewed by many as a sideshow.
On Sunday, he was elected Argentina’s next president and is now tasked with guiding one of Latin America’s largest economies out of one of its worst economic crises.
Many Argentines awoke Monday anxious, others hopeful, but just about everyone was uncertain about what lay ahead.
Perhaps the only certainty about the country’s political and economic future was, in three weeks, a far-right political outsider with little governing experience was set to take the reins of a government he has vowed to upend.
In other words, it is Argentina’s Donald Trump moment.
Milei, a libertarian economist and freshman congressman, made clear in his victory speech Sunday he would move fast to overhaul the government and economy.
“Argentina’s situation is critical,” he said. “The changes that our country needs are drastic. There is no place for gradualism.”
Markets cheered his election, with Argentine stocks and bonds rising on U.S. exchanges (the Argentine market was closed for a holiday). Markets appear to view Milei as a better economic bet than his mostly leftist predecessors.
Failed economic policies — including overspending, protectionist trade measures, suffocating international debt and the printing of more pesos to pay for it — have sent the nation of 46 million into an economic tailspin.
Annual inflation has surpassed 140%, the world’s third-highest rate, leaving many residents rushing to spend or convert their pesos to U.S. dollars or cryptocurrencies as quickly as they can, while the country’s growing number of poor increasingly line up at food banks and soup kitchens.
To fix it, Milei has proposed turning the world’s 22nd-largest economy into a laboratory for radical — and largely untested — economic ideas.
Milei, 53, has said he wants to slash spending and taxes, privatize state companies, eliminate 10 of the 18 federal ministries, move public schools to a voucher system, make the public health care system insurance-based, close the nation’s central bank and replace the Argentine peso with the U.S. dollar.
He identifies as an “anarcho-capitalist,” which, he has said, is a radically free-market strain of libertarianism that believes “society functions much better without a state than with a state.” Now he is a head of state.
“This is a completely new scenario we’ve never been in,” said María O’Donnell, an Argentine political journalist and radio host. “Milei has these very extravagant ideas we’ve never seen implemented anywhere in the world.”
There has been little consensus among economists over the best path ahead for Argentina, but few had suggested Milei’s approach before he arrived on the scene — and few know what to expect now.
Monday morning, Milei already began to wobble on some of his campaign pledges. In one radio interview, he said Argentine law would restrict him from privatizing health care and education. In another, when asked about his plan to use the U.S. dollar, he responded “the currency we adopt will be the currency that Argentines choose.”
What does that mean? “I’m not sure he knows,” said Eduardo Levy Yeyati, an Argentine economist and professor.
“Argentina has historically been a laboratory for weird ideas,” Levy Yeyati said, but many are never implemented because of economic and political realities.
He said that he believes the same will happen with Milei, at least at first. “There will be a reality check,” he said. “Most of these proposals will still be talked about, but it will be hard to implement them in the first year.”
Milei is expected to have to make political deals to carry out his plans, as his 2-year-old political party controls just 10% of the seats in Argentina’s Senate and 15% in its lower house of Congress.
He will most likely broker many of those deals with Mauricio Macri, Argentina’s former president, a conservative who has retained broad control over a large political party.