Tag: Inflation

For years, Argentina’s discredited ruling class has been sitting on a powder keg, unable to lift the country out of a seemingly intractable crisis that has sowed anger and despair in South America’s second-largest economy.

On Sunday, the long-simmering anger boiled over, carrying to power a chainsaw-wielding political outsider who has promised to “blow up” the system and whose own supporters call him “El Loco” (the madman).

Milei, a former economist and TV pundit with almost no political experience, has surged to power on a wave of anger over decades of economic mismanagement. He has vowed to “put an end to the parasitic, stupid, useless political caste that is sinking” a country crippled by triple-digit inflation, where the poverty rate has reached 40%.

The self-styled “anarcho-capitalist” handily defeated his Peronist opponent, Finance Minister Sergio Massa, in a runoff election on Sunday – defying forecasts of a close race in a contest analysts had described as a tussle between two deeply flawed candidates.

“Argentinians were forced to choose between two very unappealing options,” said Benjamin Gedan, head of the Washington-based Wilson Center’s Latin America Program and director of its Argentina Project. He cautioned against reading the result as a wholehearted endorsement of Milei’s personality or agenda.

“On one side, you had the current finance minister who has presided over an utterly failing economy,” Gedan explained. “On the other, a very radical outsider figure who offered something extraordinarily different: who wants to dolarise the economy, close the central bank, liberalise gun ownership and the sale of organs, a quirky individual who has cloned his dog and claims his pets are his senior advisers.”

Trump, Bolsonaro – and Wolverine

Milei’s astonishing rise to power is a measure of the frustration of Argentinian voters, laying bare the depth of resentment at the ruling class and the country’s state of affairs. It is also a product of television channels plugging provocative talking heads to boost their ratings, mirroring the rise of extremist pundits-turned politicians elsewhere.

Read morePushing far-right agenda, French news networks shape election debate

Argentina’s next president made his name by furiously denouncing the “political caste” on television programmes, while also rambling on about inflation and his sex life. His anti-establishment rage resonated with Argentinians yearning for change, while his dishevelled mop of hair – inspired by X-Men anti-hero Wolverine – and profanity-laden rhetoric only contributed to his notoriety.

Two years ago, Milei’s rising television stardom helped him secure a lawmaker seat in Argentina’s lower house of Congress. He was seen as a very long shot for the presidency only months ago – until he scored the most votes in August primary elections, upending the political landscape.

Before entering the public spotlight, Milei was chief economist at Corporación America, one of Argentina’s largest business conglomerates that runs most of the country’s airports. His flagship economic policies include “dollarising” the economy by 2025 to halt the “cancer of inflation”, meaning he would drop the peso – Argentina’s battered currency – and thereby relinquish control over monetary policy.

Milei has cast himself as a fierce adversary of the state, which he accuses of curtailing people’s freedoms and emptying their pockets. At campaign rallies he often appeared on stage revving a chainsaw to symbolically cut the state down to size. He has vowed to slash public spending by 15%, privatise state companies and reduce subsidies on fuel, transport and electricity.

The president-elect, who is due to take office on December 10, started to outline some of his planned policies in a radio interview on Monday morning, saying would quickly move forward with plans to privatise state-run media outlets that gave him negative coverage during the campaign, describing them as “a covert ministry of propaganda”.

“Everything that can be in the hands of the private sector will be in the hands of the private sector,” he told Bueno Aires station Radio Mitre, adding that the state-controlled energy firm YPF would be revamped so it can be “sold in a very, very, very beneficial way for Argentines”.

An admirer of former US president Donald Trump, Milei has likewise embraced his maverick status, commanding unrivalled attention throughout the campaign with his provocative statements. He has not shied away from lashing at revered compatriots, including Pope Francis, whom he branded an “imbecile” for defending social justice.

It is no surprise that he has adapted Trump’s best known slogan, promising to “Make Argentina Great Again”.

Like Trump and his Brazilian ally Jair Bolsonaro, Milei has appealed to the conservative vote by promising a crusade against progressive politics. He has described sex education as a Marxist plot to destroy the traditional family unit and has proposed a plebiscite to repeal abortion, which Argentina legalised in 2020. He also rejects the notion humans have a role in causing climate change.

All of this is “very worrying not only for women, but for minorities in general, because Milei is waging the same cultural wars that the far right is waging elsewhere”, said Juan-Pablo Ferrero, a senior lecturer in Latin American politics at the University of Bath.

“He is also rolling back on the human rights agenda that has gained Argentina international recognition” since the transition to democracy, Ferrero added. “Minorities will have to resist his moves in parliament and on the streets.”

Taking another page from the Trump and Bolsonaro playbooks, Milei also made unfounded claims of election fraud before Sunday’s runoff, raising concern about his respect for democratic norms. His victory also means the rise of Victoria Villaruel, his controversial running mate who has minimised the number of victims of Argentina’s brutal 1976-1983 dictatorship.

A ‘stress test’ for Argentinian democracy

In the run-up to the vote, Massa and his allies had warned Argentinians that Milei’s plans would sharply curtail hard-won rights and the public services and welfare programs many rely on. Their margin of defeat suggests the strategy – which Milei had dismissed as a “campaign of fear” – may ultimately have backfired.

“Despite Milei, despite all his campaign mistakes, despite all his peculiarities that raise doubts, concerns (…) despite all of that, the demand for change prevailed,” Lucas Romero, the head of Synopsis, a local political consulting firm, told the Associated Press.

Having cast himself as the “only solution” to Argentina’s woes, Milei will have little time to bask in his victory. Even before his election, analysts had already shed doubt on the feasibility of many of his campaign pledges, starting with his much-touted “dolarizacion”.

Ditching the peso in favour of the dollar requires a hefty stock of greenbacks, and the International Monetary Fund (IMF) has warned that Argentina’s dollar reserves are dangerously low. Analysts have flagged the risk of a run on the peso as people panic believing dollarisation is imminent.

“Milei is someone who promises big new ideas but maybe too big and maybe not feasible,” said Gedan, noting that the president-elect has no parliamentary majority to back him and even less of a foothold in local government. “It’s far from clear he can implement his agenda, given his fledgling party, his few allies in Congress, the small and inexperienced group that surrounds him, and the fact that he controls none of the country’s provinces,” he added.

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Milei’s Liberty Advances party counts just seven seats out of 72 in the Senate and 38 out of 257 in the lower Chamber of Deputies. He will be hoping to win support from the mainstream right of former president Maurico Macri, which threw its electoral weight behind him ahead of Sunday’s runoff in a bid to ensure defeat for the incumbent Peronist camp.

“It remains to be seen whether this electoral support will translate into a political agreement,” said FRANCE 24’s Argentina expert David Gormezano. “Will some of Macri’s circle join the government? Will conservative lawmakers offer their support? It’s too early to know.”

The lure of power, and a common detestation of Peronism, could be enough of an incentive.

“One can imagine the conservative camp going a long way to back Milei, including in some of his excesses, in order to get their revenge over the Peronist camp,” Gormezano added, though noting that Milei would still be short of a majority in Congress even with conservative support.

According to Ferrero, Milei’s election signals the “biggest stress test” for Argentina’s democracy since the end of military rule. Under the country’s constitution, “presidents have the power to rule by decree in exceptional circumstances – but that tests the system,” he explained. “We will see to what extent he makes use of those powers.”

There will be plenty of scrutiny of Milei’s first steps on the international stage, too. The Argentinian provocateur has already raised alarm bells in a number of Latin American countries and said he would seek to reduce trade with China, Argentina’s second-biggest trading partner after Brazil.

While Trump and Bolsonaro were quick to hail the election result on Sunday, neither is currently in power. The centre-left leaders of Argentina’s two largest neighbours, Brazil and Chile, have been noticeably more guarded in their response.

Brazil’s President Luis Inacio Lula da Silva on Sunday extended his best wishes to the newly elected president, but did not make direct mention of Milei. He had previously expressed his hope that Argentinian voters would choose a president who supports democracy and the Mercosur trading bloc – which Milei has suggested Argentina should leave.

Milei has criticised Brazil’s president multiple times and labelled him an “angry communist” with a “totalitarian” bent. On Monday, a close Lula aide said Argentina’s president-elect must apologise to the Brazilian leader before talks between the two can be organised.

“He freely offended President Lula,” Social Communications Minister Paulo Pimenta told reporters. “It’s up to Milei, as president-elect, to call and apologise.”

Whether at home or on the international stage, Argentina will be sailing through uncharted – and choppy – waters with “El Loco” at the helm.