By John J. Metzler
Facing a tight and tense presidential election showdown, Argentines chose freedom. In a stunning upset, the South American country elected an upstart libertarian candidate Javier Milei, an economist who promised to cut spending, reduce bloated budgets, mixed with calls for economic shock therapy to save the resource-rich country from its downward spiral.
The second round election came a month after both men emerged from a bruising multi-candidate contest. Economics Minister Sergio Massa, a professional politician and part of the center-left government faced off against Javier Milei, 53, new to politics, who mixes populism with pragmatism.
The result saw Milei gain a commanding 56 percent of the vote to 44 percent for the government candidate. Results were called less than two hours after the polls closed. Cheering crowds filled the streets of the capital Buenos Aires.
The political contenders were polar opposites in nearly every sense; one a man of the establishment, another a sometimes comically controversial populist with an appeal to the young voters and a bruised business sector; 76 percent of voters cast ballots.
Many observers describe Javier Milei as Argentina’s populist persona of former Brazilian President Jair Bolsonaro or former U.S. President Donald Trump.
Milei’s new movement La Libertad Avanza (Liberty Advances) a political coalition, lacked the formal party structures and organization of the mainstream center-right party led by former President Mauricio Macri who lost four years ago but who supported Milei.
The election was set against the backdrop of Argentina’s drastic economic and social decline where a resource-rich land seemed to be in a race to the bottom. Inflation hovers at 140 percent while the national currency, the peso, has sadly become just short of play money with 354 pesos to the U.S. Dollar. When this writer visited Argentina just a few years ago, the exchange rate stood at 38 pesos to 1 U.S. dollar.
The reasons are manifold but are rooted in a bloated social welfare state, combined with the enduring political cult of Peronism, a 1950s hyper-nationalist/populist/socialist dogma. High levels of corruption and cronyism have long eroded the national fabric.
Javier Milei’s formula; abolish the Central Bank and U.S. dollarize the currency. Whether this can work in an economy as large as Argentina is very debatable.
Argentina’s 46 million people nonetheless face the fact that 40 percent of their population lives under the poverty rate! This echoes a shameful legacy of the ruling political class and equally served as a powerful catalyst for change.
People tend to forget that during most of the 20th century, Argentina was a reasonably prosperous middle-class country, a leader on the South American continent. At first, the era of Juan and Evita Peron was able to live and give off the accumulated wealth of the past. But by the 1960s and 1970s, the money had run out and the debts became unmanageable. The Falklands Islands military blunder with Britain in the 1980s toppled a military junta from power and then actually brought democracy and a modicum of political stability to Argentina.
Yet, despite its economic problems, Argentina holds vast natural resources and remains a key agricultural producer.
China wants to vacuum up Argentina’s resources and has already made vital inroads into the country. Setting up Huawei 5G networks, access to a satellite tracking station in southern Patagonia, and coaxing the Buenos Aires government into supporting Global South causes with its decided tilt away from Washington. Beijing’s ambitions are hampered but not stopped with the win of the center-right government.
Javier Milei’s profile has soared in recent weeks. In the final TV debate between the two candidates, he made the case for shaking up the status quo: “Ask yourself if you prefer inflation over stability, if you prefer this decline in production and employment or if you prefer economic growth?” Currently, the country owes $44 billion to the International Monetary Fund (IMF) and faces a negative GDP growth rate of -2.5 percent.
With its vast underperformance people were fed up with the unfolding disaster. Yet can any new government, despite its good intentions, overcome the undertow of the old regime?
In his victory speech president elect Milei stated, “Today, Argentina’s reconstruction begins.”
The Argentine left dances to a sad political tango, holding a strange sentimentality for Peronism’s socialist past. Thus be assured that the new president will face strikes, demonstrations and political calumnies as he tries to reset the national freedom agenda.
Milei won, but now look at what he inherits.
John J. Metzler (firstname.lastname@example.org) is a United Nations correspondent covering diplomatic and defense issues. He is the author of “Divided Dynamism The Diplomacy of Separated Nations; Germany, Korea, China.”