Inflation "destroyed" within two years, privatizations in all directions, public media in the sights: the elected Argentine president Javier Milei has reaffirmed Monday an uncompromisingly liberal economic course.
He assured that he “literally” did not sleep the night following his resounding victory, with 55.6% of the votes, against the outgoing Minister of the Economy, Sergio Massa. Foreign interlocutors called, “we had to work,” he explained.
The ultra-liberal Milei, with his controversial positions, against abortion and even on climate change, spoke by videoconference with the former far-right Brazilian president, Jair Bolsonaro, who warmly congratulated him, and announced that he would come to his inauguration on December 10.
The day before, he had received a congratulatory message from a “very proud” Donald Trump, to whom he is sometimes compared, but refers very rarely in fact. Two months ago, however, he praised the former American president's “defense of the ideas of freedom” and “the fight against socialism.”
At dawn, a combative Milei gave a series of radio interviews, reaffirming, and detailing a little, his determination to take a radical turn in the Argentine economy. In line with a victory speech in which he warned: “no half measures”.
Overcoming chronic inflation, which at 143% over one year is exhausting the Argentines? “If we reduce monetary issuance today, this process would take between 18 and 24 months,” he estimated, wishing “to destroy it and bring it back to the lowest international levels.”
Tempering certain hopes – but also fears – the 53-year-old ultraliberal economist assured that he would not lift exchange controls immediately, otherwise “we would reach hyperinflation”.
– Dialogue with the IMF –
But Mr. Milei above all reiterated that his privatization program would be far-reaching: “Everything that can be in the hands of the private sector will be”.
Ultraliberal economist Javier Milei (l), winner of the presidential election in Argentina, greets his supporters alongside his partner Fatima Florez, November 19, 2023 in Buenos Aires © AFP – Emiliano Lasalvia
He thus quoted the oil giant YPF, nationalized in 2012 under the Peronist presidency of Cristina Kirchner. But also public media like the official Telam agency and TVP television, “which have become a propaganda mechanism”, he denounced in another interview on Radio Miter.
And he reaffirmed his desire to ultimately eliminate the Central Bank, via the dollarization of the economy. “The currency will be the one that Argentines choose freely. Basically, you are dollarizing to get rid of the Central Bank.” He did not give a timetable.
Regarding the International Monetary Fund (IMF), to which Argentina is struggling to repay a $44 billion loan granted in 2018, Mr. Milei assured that his team “has been in dialogue with people at the IMF for quite some time”.
Argentina: presidential election © AFP – STAFF
IMF Director Kristalina Georgieva congratulated Mr. Milei on Monday and hoped to “work closely” with him on a plan capable of “protecting macroeconomic stability and strengthening inclusive growth for all Argentines.”
But the Fund's adjustment program “is dead”, believes the new president, because according to him Argentina is well beyond the budget deficit objectives, “nearly 3% of GDP instead of 1.9%” .
We must correct this “as quickly as possible”, and “we will start with a reform of the State, put the public accounts in order very quickly”, promised the one who, during his meetings electoral campaigners, regularly brandished a “chainsaw” against public spending.
– “Inexorable” adjustment –
Supporters of Javier Milei, gathered in Buenos Aires, after his victory in the presidential election in Argentina, November 19, 2023 © AFP – Emiliano Lasalvia
“The adjustment must be done, inexorably, the big difference is that +the caste+ made people pay for it, and we will make the +caste and its associates pay for it”, he further argued, in reference to the ruling elite in recent years.
As Monday is a public holiday in Argentina, it was difficult to assess the market reaction to Mr. Milei's victory and its impact in particular on the peso, by general opinion notoriously overvalued at 369 to the dollar at official rates (three times more on the parallel market).
Until his inauguration, “the period will be more complicated, noisier” than if Mr. Massa, with a more predictable program from the point of view of the markets, had won, predicted economist Elisabet Bacigalupo, from the Abeceb cabinet.
Moreover, seeking to reassure about the future of education and public health, Mr. Milei recalled Monday that they “cannot be privatized, because they are the responsibility of the provinces”, Argentina being a federal state. On these subjects, he denounced a “campaign of fear” against him.
Not a word on the other hand on controversial themes, which Mr. Milei has avoided more and more recently: climate change – he believes that it is “not the responsibility of man”. Or legalized abortion in Argentina in 2021 – he is opposed to it, but does not consider turning back.
He finally indicated that he would travel “in the coming days” to the United States -Miami and New York- then in Israel, but on private trips, before taking office.
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