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Argentina president Javier Milei’s problems begin before he’ [1]

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Date: 2024-02 

Argentina’s transition to its new presidency will be very complex, not least because the incoming president is a far-right eccentric anarcho-capitalist with limited political experience. The first task for Javier Milei, who won a landslide victory earlier this month, will be averting hyperinflation when he takes office on 10 December.

This will be made harder by friction between the new president and the outgoing government. The strain became evident on election night itself, when Milei’s election rival Sergio Massa, the current economic minister, used his speech accepting defeat to claim responsibility for Argentina’s dismal economic situation now lay with Milei.

“From tomorrow, the task of providing certainty and transmitting guarantees about the political, social and economic functioning is the responsibility of the president-elect. We expect him to do so,” Massa said.

Two hours later, Milei responded in his victory speech, saying: “We want to ask the government to be responsible, to understand that a new Argentina has arrived and to act accordingly. That they take responsibility until the end of the 10 December mandate.”

This dispute gives an idea of the profound economic uncertainty in which Argentina is immersed, and heralds turbulent days to come. The short-term prognosis is very negative, particularly since Argentina already has a year-on-year inflation rate of 143% and a debt of $44bn with the IMF, which has had to intervene in the country’s economy 22 times since 1958.

In his victory speech, Milei declared that he would immediately begin to implement his shock plan, the flagship component of which was replacing the Argentinian peso with the US dollar – though he has rowed back on this in recent days – making large cuts to public budgets, scrapping all rent regulation and privatising large companies, including oil giant YPF and the public broadcaster.

“There will be no gradualism, there is no room for lukewarmness, there is no room for half measures,” he said hours after being declared the winner. “If we do not move forward quickly with the structural changes that Argentina needs, we are heading straight for the worst crisis in our history.”

Since then, the man whom Milei hoped to appoint as head of the central bank to oversee the dollarisation has announced he will not take the post, and the president-elect has begun backing away from his most radical policy.

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[1] Url: https://www.opendemocracy.net/en/democraciaabierta/javier-milei-argentina-president-hyperinflation-dollarisation-peso-economy-problems-begin-before-inaugration/

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