July 16, 2024

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Javier Milei prepares shock therapy to cure Argentina’s sickly economy

2 min read

Argentina’s voters have taken a leap into the unknown after electing Javier Milei, a radical libertarian outsider, as president in the hope that his promise of shock therapy can cure its sickly economy.

Rightwing populists in the shape of Donald Trump and Italian premier Giorgia Meloni were quick to offer congratulations to Milei, the mop-haired television economist who beat economy minister Sergio Massa by a convincing 11 percentage points. But Argentines were already worrying about how the flamboyant first-term legislator might govern the deeply divided South American nation without a congressional majority.

Milei pledged in a burst of radio interviews on Monday to privatise national oil company YPF, state television and radio. “Everything which can be in private sector hands will be in private sector hands,” he vowed. He promised to visit the US and Israel in the three weeks before his inauguration, saying it would be a “spiritual” experience.

His flagship policies are taking a “chainsaw” to a bloated state and dollarising the economy, but Milei has limited room for manoeuvre as he inherits a dire financial situation. Argentina’s foreign exchange reserves are exhausted, annual inflation hit 142.7 per cent in October and Massa has emptied the treasury for a pre-election spending spree.

A messy transition looms: the pair have already clashed after Milei angrily rejected Massa’s attempts to assign him immediate responsibility for guaranteeing stability. Alberto Fernández, the incumbent president, has all but vanished during the election campaign, as the ruling Peronists attempted to put distance between Massa and his unpopular boss.

One of Milei’s first tasks will be to prepare a new 2024 budget to send to congress after he takes office on December 10. Analysts expect it to include large spending cuts after Milei, who repeated in his victory speech that there was “no room for gradualism”. The president-elect will also need to start talking…

2023-11-20 14:02:27

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