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Argentina inaugurates Javier Milei. How far to the right will he go?

December 10, 2023
in News
Argentina inaugurates Javier Milei. How far to the right will he go?
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BUENOS AIRES — Javier Milei, the libertarian economist embraced by far-right leaders around the world, is to be sworn in Sunday as president of Argentina, an office he won on promises to slash government spending and dramatically transform a country facing its worst economic crisis in two decades.

Milei, a political outsider who rose to prominence here as a television pundit, takes office exactly 40 years after Argentina’s return to democracy following the fall of its brutal military dictatorship. He clinched a stunning victory last month over the outgoing economy minister on a pledge to rip up the entire system.

During the campaign, Milei vowed to dollarize the economy, cut the number of government ministries by more than half, and shutter the central bank. But in the weeks since, the wild-haired radical has pedaled backward. Dollarizing and closing the central bank no longer appear to be on his immediate agenda; since the election he has focused instead on what he describes as the most urgent issue: cutting the fiscal deficit.

“There’s no money,” Milei has repeated, mantra-like, in each of his interviews as president-elect. “Fiscal balance is not up for discussion. Any minister who spends more, I will fire him.”

Argentina, which has struggled for decades with inflation and debt, has found itself excluded from international borrowing and failing to meet the terms of a bailout agreement with the International Monetary Fund. The third-largest economy in Latin America has a plummeting peso, a poverty rate at 40 percent and a central bank with virtually no reserves.

Milei’s office has said closing the central bank remains a “nonnegotiable,” but his recent moves suggest it will at least be postponed. His appointment of Luis Caputo to head the Economy Ministry — the pragmatic former center-right finance minister and central bank chief has been dubbed the “Messi of finance” — has been received as an unexpectedly orthodox and market-friendly choice.

Some of Milei’s recent decisions, political analyst Juan Germano said, indicate “he’s trying to create something different from what was expected.”

Milei has also stepped back from some of his more aggressive foreign policy positions as he tries to mend relationships with leaders and countries with which he’ll now have to deal. During the campaign, he called China an “assassin” state, Pope Francis a “representative of the evil left” and Brazilian President Luiz Inácio Lula da Silva a “communist.”

Since winning the election, he has hailed Francis as the “most important Argentine in history,” invited Lula to his inauguration (the Brazilian has declined), and thanked Chinese President Xi Jinping for his congratulations and offered wishes for the well-being of the Chinese people.

Prominent world leaders — including, reportedly, Ukrainian President Volodymyr Zelensky — are expected to attend Sunday’s inauguration. Also expected are several figures from the global far right, including former Brazilian president Jair Bolsonaro, Hungarian Prime Minister Viktor Orban and the leader of Spain’s Vox party, Santiago Abascal.

Former president Donald Trump told advisers he would like to attend the inauguration, but logistical hurdles make the visit unlikely, according to two people familiar with the matter who spoke on the condition of anonymity to reflect private deliberations.

“The support from the right and from Trump and Bolsonaro gives a certain legitimacy to his figure, and to his political project,” Argentine political analyst Ana Iparraguirre said. Those alliances help give credibility to a president-elect whom Iparraguirre describes as more of an outsider than even Trump or Bolsonaro, having never had Trump’s experience in corporate America nor Bolsonaro’s in Brazil’s military establishment.

As Milei kicks off his presidency, political analyst Andrés Malamud said, he faces a daunting challenge: how to find the political and social support needed to implement reforms “that the majority believe are necessary but no one wants to pay for.” With control of fewer than 15 percent of the seats in Argentina’s lower house and fewer than 10 percent in the upper chamber, Milei will have to build alliances in Congress if he wants to pass his agenda.

That agenda will face an immediate test on Monday, when Milei is expected to unveil a comprehensive bill to overhaul the Argentine system with significant state deregulation, labor revisions, tax simplification and the elimination of primary elections. It could also involve the privatization of deficit-running state-owned enterprises.

The economy is expected to worsen before it gets better. Prices have been rising since Milei’s win. Economists expect a 20 percent increase in December alone, and increases to continue through the first months of a Milei government as the current government’s artificial price caps are lifted.

Sunday’s inauguration could provide a glimpse of what to expect of Milei in his first days — and whether he will push forward with his radical campaign promises or opt for a measured approach.

“I don’t know which Milei is going to show up on Sunday,” said Gregory Makoff, senior fellow at the Mossavar-Rahmani Center for Business and Government at Harvard’s Kennedy School of Government and an author who has written about Argentina’s debt crisis.

“Is he going to bring a chain saw, or will he bring his reading glasses?” Makoff asked. “He can be a peacemaker and a historical figure in Argentine history. This can be a major turning point, or it can be a major disaster. Whatever his plan, he has to deliver.”

Schmidt reported from Bogotá, Colombia.

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Copyright for syndicated content belongs to the linked Source : The Washington Post – https://www.washingtonpost.com/world/2023/12/10/javier-milei-inauguration-argentina/

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