Javier Milei

by Joaquin Soler

Argentina just elected a new president named Javier Milei. He is now tasked with leading one of Latin America’s largest economies out of one of its worst economic crises. Argentina has been in such an economic crisis because Argentina’s peso has been limited by capital control since a market crash back in 2019. In 2019, the poverty rate was 11.2% ; in 2023 40% of the people lived under the poverty line. In 2019, the inflation rate was 54%, in 2023 it was 185% and the peso to dollar conversion in 2019 was 1 peso was worth 0.01671 dollars now in 2023 1 peso equals 0.0028 dollars. 

President Milei does not have much governing experience. President Milei, is a Licentiate in Economics with 2 masters in Economics. He was the former senior economist at HSBC Argentina, and served as chief economist at several national and international government public bodies. Since 2012, Milei has led the division of Economic Studies at Fundación Acordar, a national think tank. In addition, he was a B20/G20 adviser and member, Group of Economic Policy. (Source: World Economic Forum). Milei became popular as a head of a talking show about  government spending and the ruling political class boosted ratings.  He was elected to congress for his party Libertad Avanza (Freedom Advances) in 2021, and he was recently elected in November 2023 as the country president by a tsunami of voters furious with the government corruption and lack of direction. At the November Argentinean elections , there were 2 options, electing the same people who have been in power for almost 2 decades that had brought the country into one of the worst economic crises, or gambling to a new option full of uncertainties. 

Milei wants to turn this large economy into a laboratory for radical economic ideas that have never been used before. He said he wants to cut spending taxes, privatize state companies, eliminate 10 of the 18 federal ministries, make the public health care system insurance-based, close the nation’s central bank and replace the Argentine peso with the U.S. dollar. Milei is an “anarcho-capitalist” because he criticizes socialism and communism, advocating economic liberalization and restructuring government ministries. He opposes Argentina's Central Bank and current taxation policies. Economically, Milei is influenced by the Austrian School and admires former president Carlos Menem's policies.Then someone asked him what that means and he responded with “I am not really sure what that means.” Mr. Levy Yeyati, an Argentine economist and professor interpreted it as “Mr. Milei would first aim to eliminate most restrictions on trading foreign currencies, which the Argentine government has restricted as part of its effort to prop up the value of the Argentine peso.” On top of this, Milei’s campaign also lacks governing experience so this is gonna go really bad if they can’t make the right decisions. “Mr. Milei announced Monday that his justice minister would be Mariano Cúneo Libarona, a lawyer turned television pundit who rose to prominence defending celebrities, including in a 1996 drug case when he represented the soccer star Diego Maradona’s manager.” This is an example of who he has beside him in his campaign. I don’t think this is going to go well for Argentina because of the lack of government experience Milei’s cabinet has, Milei is trying to use new ways to help make the economy better. His new foreign minister, Diana Mondino, who is an economist, told reporters that one of the government’s main foreign policy goals was to end most regulations on imports and exports. His running mate is Victoria Villarruel who has spent much of her career running an organization that recognizes victims of attacks carried out by leftist guerrillas, which Argentina’s military used as justification for its bloody dictatorship from 1976 to 1983. All these people that Milei has with him barely have any government experience which can lead to bad decisions which can make the country worse than it already is. 

Milei wants to try new strategies to make the economy better for the country. Milei wants to cut spending taxes which means that he will reduce the amount of taxes you have to pay, privatize state companies which means that he will sell shares for government owned companies and will put the money into various stock markets which then will make them more money if it works, eliminate 10 of the 18 federal ministries which means , make the public health care system insurance-based which means instead of the regular health care system it is gonna be insurance-based which means you receive financial protection for when something bad happens like you lose a family member, close the nation’s central bank and replace the Argentine peso with the U.S. dollar which means they will no longer be using peso instead the U.S. dollar to make sure they have more money. This all can be very risky because if one thing goes wrong then all of it can go wrong.  For example, when Milei says he will privatize state companies this means that he will sell shares for government owned companies and will put the money into various stock markets. If the stock Market goes down then money will be lost.

All-in-all, Milei becoming president for Argentina is not gonna go well. The members of his cabinet barely have any governing experience which can lead to them not knowing what decisions to make and also not knowing how to help Milei. Also, Milei wants to turn the economy into a laboratory by using ideas that have never been used before which is really risky because he doesn’t know if they will work because no one has ever tried it. So, all these factors can make Argentina way worse than it already is.