Javier Milei, Argentina's President, has introduced economic reforms to overhaul the economy and address high inflation and poverty.

Milei's economic policies include cutting public spending, privatizing state-owned companies, and reducing fuel subsidies.

The president has proposed dollarizing the economy and abolishing the central bank.

Milei's reforms have been met with opposition from labor unions and civil servants due to concerns over job losses and price increases.

The government's adjustment to curb price rises is split 60% on politicians and 40% on the private sector.

Milei's administration has introduced bills to change or repeal economic regulations, including those prohibiting public company privatization.

The IMF has endorsed Milei's shock therapy and provided a $4.7 billion bailout package to help Argentina.

Milei's economic plan may exacerbate social conflict and poverty, which already affects 40% of the population.

Argentina's government proposes to abolish the rule requiring permission to issue dollar bonds to address its foreign debt.

Milei's policies may alienate Argentina from China, its second-largest export market and a major investor in its lithium industry.

Argentina has a $9.494 billion trade deficit with China and relies heavily on its investment.

Milei's economic reforms include privatization and deregulation, aiming to eliminate the government deficit by 2024.

The president's economic reforms have sparked clashes outside parliament over cuts to pensions and labor rights.

Milei has labeled protesters as "terrorists" and restricted the right to assemble in Argentina.

The administration's actions have been criticized for their constitutionality by congressional leaders and specialist lawyers.

Javier Milei's economic reforms in Argentina aim to address the country's challenges, but their outcome is uncertain and potentially risky.

Javier Milei, Argentina's President, has introduced economic reforms to overhaul the economy and address high inflation and poverty.

Title:

Content: BUENOS AIRES, Argentina — President Javier Milei of Argentina kicked off a visit Wednesday to the United States, where he'll meet with tech billionaire Elon Musk, as his government seeks an infusion of cash to overhaul Argentina's embattled economy.

The populist president started his four-day trip in Miami, home to one of the largest populations of Argentines in the U.S., where he received an honor from the Jewish community Wednesday at an Orthodox synagogue. Milei will meet with Musk on Friday in Texas, his spokesperson said, where he will also tour a factory for Tesla, Musk's electric car company.

Milei's third trip to the U.S. in merely four months as president comes as he reshapes Argentine foreign policy in line with Washington. Standing beside Gen. Laura Richardson, head of the U.S. Southern Command, at the southernmost tip of South America last week, Milei vowed to boost the nations' ''strategic alliance'' — underscoring how he sees U.S. support as vital to the economic overhaul on which he has staked his presidency.

''We took advantage to present a new foreign doctrine for Argentina,'' Milei wrote Wednesday on social media platform X of his meeting with Richardson. In the same post, apparently directed at Musk — a self-declared free speech absolutist — Milei said he promoted ''true freedom of expression'' and slammed journalists critical of his administration as trying to ''stop us from speaking."

''We are not going to remain silent in the face of slander, insult or defamation,'' he wrote.

Milei's plan to drastically cut public spending has inflicted economic pain and encountered resistance in a nation where annual inflation tops 276%. On Wednesday, police forcibly dispersed anti-government protestors blocking a main Buenos Aires artery.

Not only is the U.S. the biggest investor in Argentina, it also has the most influence over the International Monetary Fund, to which Argentina owes $42 billion. The IMF has endorsed Milei's shock therapy for Argentina, agreeing to disburse $4.7 billion from a bailout package the country took out six years ago.

The State Department's investment climate statement last year noted ''capital controls, trade restrictions, and price controls'' as factors hampering investors in Argentina. Milei has vowed to roll back those interventionist policies with market-oriented changes favored by business leaders, like Musk, one of the world's richest men who leads rocket company SpaceX, social media platform X and Tesla.

Milei and Musk — who both share a brash personality-driven style and distaste for government overreach — have expressed mutual admiration. Ahead of his inauguration last December, Milei praised Musk as an ''icon of freedom in the world." Musk gushed over Milei's speech lambasting socialism at the World Economic Forum in Davos, Switzerland, commenting ''So hot'' with a meme of a couple having sex while watching Milei speak.

With its vast lithium reserves, Argentina has much to offer Musk, a dominant player in the electric auto industry who has dubbed the metal, an indispensable ingredient in electric car batteries, "the new oil."

Milei's free-market policies have raised hopes in the U.S. that the metal and other badly needed raw materials can be extracted closer to the U.S., breaking China's dominance of the battery supply chain. The Biden administration said it was exploring investment opportunities in Argentine lithium earlier this year.

What economic issue did Milei want to address?

Milei's economic policies include cutting public spending, privatizing state-owned companies, and reducing fuel subsidies.

Title:

Content: International News

Who Is Javier Milei?

Alex Paszkowicz

Brandishing a chainsaw throughout his electoral campaign, the libertarian and self-proclaimed ‘anarcho-capitalist’ Javier Milei won the Argentine general election on 19th November 2023. Milei’s policies and personality cause controversy, so who is the television pundit turned politician?

Beating his rival Sergio Massa with 14.4 million votes to Massa’s 11.5 million, Milei will begin his 4-year mandate starting on 10th of December. After winning a majority of just 4 out of the twenty-four Argentine provinces, Massa conceded defeat at the Unión por la Patria‘s campaign house before the results were officially published.

The centre-left finance minister admits that “obviously these are not the results we hoped for, and I have spoken to Javier Milei to congratulate him because he’s the president that the majority of Argentines have chosen for the next four years”.

Massa has also hinted that he will retire from front-line politics.

The Peronist political movement has been pushed out of government

Milei’s victory has dismantled the left-wing political establishment, even ending Argentina’s 2-party political system. Created in the 1940s by Juan and Eva Perón, the Peronist political movement has been pushed out of government, despite ruling for sixteen out of the last twenty years. His campaign fell short despite Massa continuously appealing to voters’ fears surrounding Milei’s volatile character and risky economic policies.

Compared with Massa, and judging by the election result, Milei is seen as the lesser of two evils in Argentina, as the previous Peronist government could not provide economic stability.

The third-largest Latin American economy has almost reached inflation of 150%, and 40% of Argentina’s 45 million population is in poverty. Furthermore, the International Monetary Fund has rescued the Argentine state twenty-two times, with the most recent loan of $44 billion in 2018.

Milei used his platform […] to circulate conspiracy theories

Economist Sergio Armella believes, “it is indisputable that a swift change from the failed economic policies of the past is imperative. The accumulated economic imbalances have grown too large and must be addressed promptly”.

Nicknamed ‘El Loco’ and before running for president, Milei used his platform on television to circulate conspiracy theories around election fraud and Argentina’s economic problems.

Combined with his extravagant personality and viral TikTok videos, he targeted a younger audience who had grown up through economic hardship and strict Coronavirus lockdowns. Milei’s camp is also known to question the national consensus, which has lasted four decades, over the crimes of its 1976 to 1983 dictatorship, which killed around 30,000 people.

“The reconstruction of Argentina begins” [Milei]

The man with five cloned dogs, each named after a different right-wing economist, claims that with his new mandate, ‘“the reconstruction of Argentina begins”. Calling the result a “miracle” in his victory speech, he says that the result “marks the end of decadence in Argentina”.

He believes Argentina will return to being a “global power”, while alluding to those conspiracies he supported in his past where previous governments, “shared the state amonpoliticians and their friends”.

Although he abandoned his chainsaw to improve his public image, the symbol refers to his promise to decrease inflation by cutting public spending by 15% and privatising state companies, while reducing fuel and electricity subsidies.

Milei wants to abolish the central bank and adopt the US dollar as its official currency, to stop the country from printing more money like previous governments. If the dollar’s value continues to devalue, then inflation could rise with a risk of hyperinflation, which could return after three decades.

Aims to sever ties with China

Milei has no interest in joining the BRICS alliance, and aims to sever ties with China to help move towards privatising state-led companies like the oil industry.

According to economist Elizabeth Bacigalupo, this includes an estimated $10 billion in annual savings on energy imports through a new gas pipeline in Vaca Muerta. Also, this year, the drought in Argentina reduced its agricultural exports from $39 billion in 2022 to $23 billion. But with next year’s predictions, exports could be up to $40 billion.

The problem Milei faces is how fragmented the Argentine Congress is. The coalition he formed with the conservatives after the first round only has 10% of the Senate and 15% of the lower house, meaning he will have to negotiate with his political rivals to push through his complicated reforms.

Any delay in economic progress could lead to more inflation and social unrest.

Despite insults hurled at Brazil’s President, Luiz Inácio Lula da Silva, by Milel throughout his campaign, he wished him support on social media, saying “democracy is the voice of the people and must always be respected”.

Donald Trump believes Milei will “Make Argentina Great Again”

Former US president Donald Trump believes Milei will ‘Make Argentina Great Again’. Businessman Elon Musk expressed a similar sentiment and posted, ‘prosperity is ahead for Argentina’.

Reactions from Milei supporters are varied, with voters desperate for change. A supporter named Michelle Chelsea in Buenos Aires says, “economic policies have led us to this situation. Today, more than half of the population has voted for a different option, and I hope that things will change a lot”.

A Food Service Worker, Alejandro Bravo, is hopeful for the future. “It’s an incredible joy. It’s the end of a never-ending decline, so to corrupt politicians, we say, “get lost”‘.

“We’ve had enough corruption, enough insecurity, enough inflation, enough poverty. We were very tired, we wanted something new, we wanted to see new faces”, states supporter Barbara Rubin.

Alex Paszkowicz

Featured image courtesy of Angelica Reyes via Unsplash. Image license found here. No changes were made to this image.

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The president has proposed dollarizing the economy and abolishing the central bank.

Title:

Content: Argentina election: Javier Milei's radical proposals face test of reality

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Javier Milei, the anti-establishment politician who cruised to victory in the Argentine presidential election last week, has courted intense controversy with radical, provocative policy proposals and statements.

This led many detractors of the self-styled "anarcho-capitalist" to call his candidacy a "leap into the void".

Now, with the mop-haired president-elect only two weeks away from taking over Latin America's third-largest economy, many are asking, how will his policies and positions face the test of reality?

Taming inflation takes time

Javier Milei had proposed to dollarise the economy and eliminate the Argentine Central Bank as a strategy to "kill" hyper-inflation. This meant making the US dollar the national currency in place of the Argentine peso, whose value, Mr Milei said, had been "melting like blocks of ice in the Sahara".

One obstacle is that ditching the Central Bank and making the US dollar legal tender would need approval from the Argentina's Congress and could even require changing the constitution.

Although Mr Milei convincingly won the presidency, his Libertad Avanza (Freedom Advances) movement is barely the third largest political force in Congress. This suggests difficult negotiations might be in store.

Some economists have also questioned whether Mr Milei's plans are feasible, saying they would weaken his government's ability to manage domestic monetary policy.

Having the US dollar as the Argentine currency would effectively leave interest rate policy in the hands of the US Federal Reserve. Argentina's economy would be more vulnerable to external shocks involving the US dollar, for example sudden rises in prices for oil and fuel imports, which could make internal adjustments even more painful inside the country.

Sceptics also point out that Argentina would need to have in hand the US dollars to replace the pesos. Experts believe this could require anywhere between US $35bn to $50bn which indebted Argentina currently does not have and may not be able to borrow easily.

Mr Milei himself has admitted his "shock adjustment" economic stabilisation recipe could actually take up to two years to bring down inflation. "Saying anything else is lying," he said.

A climate sceptic?

Another topic that had made media headlines was Mr Milei's apparent declaration of himself as a climate change "sceptic", that is, someone who denies the role of humans in global warming.

"I do not deny climate change. What I am saying is that there is a temperature cycle in the history of the Earth... Therefore, all those policies that blame humans for climate change are false," Mr Milei said during a presidential debate last month, causing much commentary and criticism.

In his proposed government programme, one of the numerous ministries he had said he planned to axe would be the existing environment ministry.

Such apparent climate scepticism risked putting Mr Milei sharply out of tune with an international majority of governments and leaders who plan to gather at the COP28 climate conference in Dubai soon to seek urgent solutions to the problems of climate change and global warming.

Pragmatism and the Pope

Before he was elected, Mr Milei virulently attacked Argentine Pope Francis, calling him a "Jesuit who promotes communism", and even the "representative of the evil one [the Devil] on Earth".

Such statements caused frictions with the local Catholic Church and the Vatican.

However, this antagonism appeared to miraculously dissipate only days after his election win, when Mr Milei had what he called a "very friendly" phone call with the Pope, whom he addressed as "Your Holiness", inviting him to visit Argentina in 2024.

Asked in a TV interview about this change of heart, Mr Milei conceded that, when one is president, "there are some things that require greater doses of pragmatism".

No break with China and Brazil

Before his election, Milei had signalled he could freeze ties with Brazil and China, Argentina's two top trading partners, on the grounds that he did "not make pacts with communists".

"I am going to be aligned with the United States, Israel, and the free world," he said.

Not surprisingly, this assertion caused consternation in Beijing and Brasilia, as well as in Argentina.

A Chinese foreign ministry spokesperson was quoted as warning that it would be a "huge foreign policy mistake" for Argentina to cut ties with countries such as China and Brazil.

Mr Milei's predecessor, outgoing left-wing President Alberto Fernández, had carefully nurtured ties with Beijing and had welcomed an invitation to join Brics, the China-led group which also comprises Brazil, Russia, India, and South Africa.

Experts questioned the wisdom of dismantling a relationship that clearly brought benefits to Argentina, and not only by China being a top market for Argentina's soybean, meat and grains.

China was also helping to prop up Argentina's financial reserves with a major currency swap deal - significant support for a country already heavily indebted to the International Monetary Fund (IMF).

Days after the election, however, there seemed to be clear signs that no major break in relations was planned. The president-elect received a personal letter of "congratulations and good wishes" from Chinese President Xi Jinping and Mr Milei himself made a point of thanking Xi on social media.

Mr Milei's pick for foreign minister, Diana Mondino, also dismissed as "nonsense" any suggestion that there would be a rupture in "commercial relations" with China or Brazil.

In Brazil, Mr Milei's invitation for former President Jair Bolsonaro to attend his 10 December inauguration was interpreted as "unfriendly" towards Brazil's current left-wing President Luiz Inácio Lula da Silva.

But Milei has since said Lula would be "well-received", if he wanted to come.

Dictatorship denial

Mr Milei and his vice-presidential running-mate Victoria Villarruel also ignited intense controversy during the campaign with their position regarding Argentina's 1976-83 military dictatorship.

Defying traditional positions held by Argentina's government and society for the last 40 years, Mr Milei caused outrage by contesting the generally accepted estimate of those abducted and "disappeared" in the dictatorship - 30,000 - asserting the actual number was closer to 9,000.

The candidate argued that the political violence of the 1970s in Argentina was a two-sided "war" in which "the forces of the state committed excesses but the terrorists [anti-government guerrillas] ... [also] committed crimes against humanity".

This equivalence of presentation of the two sides raised howls of protest from groups like the Plaza de Mayo mothers and grandmothers of disappeared persons.

This was just another striking way in which the Milei-Villarruel duo were trying to shake up the political status quo in Argentina. The next four years will show if they can do it.

Milei's reforms have been met with opposition from labor unions and civil servants due to concerns over job losses and price increases.

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Content: Argentine President Pledges Economic Reform in a Passionate Speech to Congress | Deutsche Welle Introduces Germany | DW | 02.03.2024
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The political climate of the times
Argentine President vows to push for economic reform
In a speech to the National Assembly on Friday, Argentina's new president, Miguel Millay, vowed to continue to push for economic reform, whether or not he has the support of the National Assembly.
He said that if the economic model is not transformed, "Argentina has no future."
Milley told lawmakers he would continue to push through reforms with or without congressional support.
Argentina ’ s new liberal president, Javier Milei, delivered a passionate speech to Congress on Friday (March 1).
He said he "will continue to push" for economic reform.
The Argentine leader, who describes himself as an "anarcho-capitalist," promised to slash state spending and reduce the government's fiscal deficit.
“We ’ re going to completely change this country. ”
Millet told lawmakers that he would continue to push ahead with reforms, whether or not he had the support of Congress.
He said "we will not back down, we will continue to move forward...
Whether it is through laws, presidential decrees or amending regulations, "he added," We will change this country forever...
with or without the support of political leaders, with or without all the legal resources of the executive branch ".
"I ask for patience and trust... It will take a while for us to see the results of the economic restructuring and the reforms that are being implemented," he added.
If the economic model does not change, "Argentina has no future"
Millay said he would introduce a bill that would penalize anyone — including the president — who financed the deficit by issuing additional money.
When he takes office, Mile will devalue the peso by about half.
"If we don't fundamentally change the economic model, then Argentina has no future," he said.
How will Argentina choose between China and the EU?
Milley's speech was repeatedly interrupted by cheers from supporters, who told Congress they would face "another animal" if they opposed his reform efforts.
Miley's Shock Therapy
After taking office in December last year, Millet issued decrees repealing or amending hundreds of laws aimed at curtailing the power of trade unions and deregulating state interference in the economy.
However, his claims met with resistance, and the court issued a ruling halting these measures.
Miller proposed a comprehensive reform plan, seeking to privatize state-owned entities and weaken labor protection.
The bill was voted down by lawmakers last month.
It includes the power to delegate to the executive branch for one year and the power to pass laws by decree on the basis of "economic emergencies".
Millet ’ s shock economic measures boosted the market, but sparked nationwide protests and strong opposition from labor unions.
Trade unions say the reforms will hurt the poor.
Despite his harsh words to lawmakers, the Argentine president struck a more conciliatory tone in his interactions with governors, proposing a 10-point “social contract ” agreed by May 25 that includes a“ rediscussion ” of the current tax distribution between the federal government and provincial governors.
Mire and the provincial governors have also been at loggerheads over the issue of funding cuts.
This week, when the governor threatened to cut off energy supplies to the rest of Argentina due to a funding dispute, the dispute heated up.
(Reuters, Associated Press, Agence France-Presse)
© 2024 Deutsche Welle Copyright Notice: All content in this article is protected by copyright law and may not be used without special permission from Deutsche Welle.
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How will Milei's reforms impact workers?

Who has opposed Milei's proposed layoff order?

The government's adjustment to curb price rises is split 60% on politicians and 40% on the private sector.

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Content: MercoPress, en Español

Montevideo, December 16th 2023 - 14:34 UTC

Argentina: Milei says burden on private sector is “transitory”

Saturday, December 16th 2023 - 10:05 UTC
Full article 0 comments

Argentine President Javier Milei Friday released a live broadcast through his Instagram account explaining that “The effort that falls on the private sector is transitory.” The head of state added his administration was “focused on avoiding hyperinflation.”

Milei, an economist by trade, also explained that a “hyper-orthodox adjustment with a sincere exchange market and restructuring of the Central Bank” was being implemented in order to curb the rise in prices through ”a sincere [currency] exchange market and [the]restructuring of the Central Bank (BCRA).“

He added that although the ”effort“ currently weighed ”60% on politicians“ and ”40% on the private sector,“ this situation would be ”transitory“ while pledging that this path would lead to closing ”the gap of the import exchange rate plus the PAIS tax“ and, with this, it will ”lower the country risk.“

Once the economy is rearranged, the government will begin to ”eliminate the things that we libertarian liberals do not like,“ the President went on.

”Never the night could beat the day; let's not curse the darkness. Argentina is starting to wake up and stand up,” he stressed.

The Argentine President will convene next Tuesday with all provincial governors to address the impact of the most recent measures on local economies.

Santiago del Estero declared an economic emergency and San Luis announced a contingency plan whereby public workers are to be paid their wages in installments.

In addition, the agriculturally-rich provinces of Córdoba, Santa Fe, and Entre Ríos have expressed their concerns over the increase in export duties.

The following provinces have already announced spending cuts in line with the national government's announcements: Santiago del Estero, San Luis, Córdoba, Tucumán, Santa Fe, Catamarca, Tierra del Fuego, Chubut, San Juan, Neuquén, Entre Ríos, and Santa Cruz.

Interior Minister Guillermo Francos was reported Friday to be coordinating Tuesday's gathering.

Categories: Economy, Politics, Argentina.
Tags: Javier Milei.

Milei's administration has introduced bills to change or repeal economic regulations, including those prohibiting public company privatization.

Title:

Content: Argentine President Announces Major Plan to Liberalize Economy
Cairo - Center Gate Thursday 21 December 2023, 09: 53 am
Argentina is awaiting a presidential decree to liberalize the struggling national economy announced by hard-line liberal President Javier Milley on Wednesday in a televised speech aimed at starting the path of rebuilding the country, restoring freedom and independence for individuals, and disarming the myriad regulations that have hampered economic growth.
In his speech, Milley said he would amend or repeal more than 300 of the current restrictions, regulations and controls, including those related to rents and labor laws.
Argentine President Votes in Boca Juniors Elections
Argentine President Meets Biden Advisers
The president, who was elected in November, said one of the measures to be included in the decree would be the repeal of the rent law “so that the real estate market starts to run smoothly again and so that rent is not a problem. ”
Privatization of public companies
Laws prohibiting the privatization of public companies will also be repealed, he said, noting that all such companies will be transformed into limited liability companies in preparation for their privatization.
Milley also announced his intention to “modernize the labor law to facilitate the process of creating real jobs, and amend the company law so that football clubs can become limited liability companies. ”
The decree amends and removes a long series of other regulatory restrictions in sectors ranging from tourism, satellite internet, pharmacy, agriculture and international trade.
For the decree to enter into force, it must be published in the Official Gazette, and then examined by a joint committee of the House of Representatives and the Senate to determine whether or not it should be repealed.
Constitutional lawyer Emiliano Vitaliani told AFP that the decree would only be revoked if it was rejected by the Senate and the House of Representatives.
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The IMF has endorsed Milei's shock therapy and provided a $4.7 billion bailout package to help Argentina.

Milei's economic plan may exacerbate social conflict and poverty, which already affects 40% of the population.

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Will Javier Milei Be Able To Blame Economy Minister ‘Toto’ Caputo Once The Going Gets Tough?

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Paradoxically, the word that appears to define Argentina’s (and the world’s) first ultra-libertarian president is pragmatism. Initially seen as a positive characteristic allowing the economist to shake off some of the fringe characters and ideas that made up his La Libertad Avanza coalition, Milei’s pragmatism could also lead to negative outcomes if his plans don’t work out.

The economist-president was smart in creating an electoral alliance with Mauricio Macri and Patricia Bullrich, along with PRO party hardliners, and later moved strategically to show independence from the former president to avoid being portrayed as a puppet, like his predecessor. He gave Bullrich the Security and Defence Ministries, minimizing Vice-President Victoria Villaruel’s power and therefore her dictatorship-denying influence, particularly over the security forces. He also sealed a deal with Luis ‘Toto’ Caputo – a leading economic figure from the Macri’s 2015-2019 administration – behind the ex-president’s back, apparently distancing himself from certain extreme measures proposed during the campaign such as dollarization and torching the Central Bank —where the economy minister’s business partner Santiago Bausili at financial consultancy Anker Latinoamerica has taken the reins.

While Caputo had fallen into disrepute, his recycling by Milei didn’t spook the markets initially, or certain sectors of society and the media that appear to have already aligned themselves with Milei. As the nascent administration begins to put its “chainsaw” austerity plan in motion, society will begin to feel the pain of the extreme measures and its tolerance will be tested, as will Milei’s and his team, at the center of which once again sits ‘Toto’ Caputo.

Toto was the first to face the music and lay out an economic plan for the Milei administration, even before the president who mustered the courage only when he announced the DNU emergency decree that came before the Omnibus law. During the first announcement, Caputo sought to deliver a didactic message that made clear the weight of the situation left behind by the Fernández-Fernández administration (“la herencia”). He looked uncomfortable, just as he did during his previous public service posts where he avoided the media and is said to have left the government suffering from panic attacks. His decision to take the “electric chair” ministry remains bewildering. The minister announced a series of measures aimed at achieving a fiscal surplus in their first year in office including aggressive budget cuts and tax hikes.

Caputo’s announcement represented the first time that Milei’s plans were laid out in any sort of detail beyond a declaration of intentions. While in line with the campaign promise of reducing the state’s obligations by more than five percent, the severity of the devaluation of the official peso-dollar exchange rate (120 percent taking it to 800 pesos) and the rest of the measures has set off alarms. Most prices have risen aggressively over the last several weeks, particularly gasoline and food, indicating inflation will spike and could persist. The December reading already hit 25.5 percent, and many expect similar numbers for January. At the same time, it is becoming apparent that forcing the “caste” to absorb the totality of the austerity plan is logically contradictory, as it inevitably affects the everyday citizen which is evident in subsidy reductions and cuts in social spending. Milei had promised he’d rather amputate his arm than raise taxes, but he’s raised export duties and the PAIS tax which pushes the value of the dollar even higher for certain transactions.

The ‘caputazo’ (as the plan is being jokingly called) replaced pure austerity with a mix of higher taxes together with spending cuts and the “dilution” of part of the deficit through high inflation. The next few months will see runaway inflation run even farther away and put intense pressure on the population, as wages and salaries fall even farther behind. Milei had warned that we would have to suffer on our way to libertarian utopia. Leftist social movements and unions have already begun to mobilize against the government, including a general strike at the hands of the General Confederation of Labor. Given Bullrich's hardline predisposition, these were peaceful marches. Will they remain so in a few months if the middle class joins in, desperate to make ends meet?

Once again, the question of Milei’s pragmatism will be front and center. Assuming the impact of his economic plan is as painful as it seems, the level of social conflict will likely rise dramatically. At the same time, he needs to continue to negotiate legislative support for his ambitious reform package, which initially seems to rest on the possibility of an “anti-Peronist” front as seen in the Senate first and at the commission level in the Chamber of Deputies later. How much will society accept that it voted Milei for an orthodox austerity plan that directly hits its purchasing-power? Will the charismatic libertarian be able to retain public support, or convince his voters that excruciating pain is a necessary condition for economic redemption? How long will Caputo resist this time? And if the plan doesn’t work, how much of the blame will Milei be able to pin on the financial trader?

At this point, we have many more questions than answers.

This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.

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As of 2024, what are the statistics regarding poverty?

Argentina's government proposes to abolish the rule requiring permission to issue dollar bonds to address its foreign debt.

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Content: December 28, 14: 30
Opinions
“No money ”: the new President of Argentina introduced the first economic reforms
Elena Kondratieva about the shock measures of Javier Miley in a country with 40% poverty
President of Argentina Javier Miley
Argentina ’ s new president, Javier Miley, in his first speech as head of state, warned the country of the need for shock measures, and in December the first phase of his plan to save the economy took shape.
True, it does not contain many election promises and there are things absolutely opposite – the new government is going to raise export duties and taxes contrary to the ideals of libertarianism, which the Argentine leader calls himself a representative of.
The authorities attribute the inconsistencies to the difficult economic situation, which requires the adoption of unpopular measures.
Both Miley and his economy minister, Luis Caputo, said the measures they were taking ran counter to their beliefs.
But, according to them, this is the lesser evil – on the other side of the scale they call hyperinflation and catastrophic impoverishment of the population.
On the third day of the government, December 13, Caputo announced the first steps of the new government, including a devaluation - the official rate of the dollar soared from 366 pesos to 800 pesos.
Currency restrictions in force in the country since 2019 have been maintained.
The authorities admit that there are no conditions for their cancellation until the government solves the problem with the debt instruments of the Central Bank.
Nevertheless, the devaluation, stronger than many experts and ordinary people expected, allowed to narrow the gap between the official and the so-called blue exchange rate, which is used in the informal exchange market.
Today, the latter is about 1,000 pesos per dollar.
About the same time he was on the eve of the announcement of Caputo.
The devaluation, combined with the end of the programs of freezing of prices, spurred the already high inflation.
According to experts, by the end of December it will be about 30%.
In November, the price increase was 12.8%.
Miley ’ s government calls its main task for next year a zero budget deficit.
The task is extremely ambitious, given that in October the International Monetary Fund (IMF) predicted that Argentina, with the necessary reforms, will be able to reach a surplus budget only by 2028.
To achieve this goal, the new government, apparently, will have to work hard with the same chainsaw, which has become a symbol of Miley ’ s election campaign.
In the course of the election campaign, the president has already emphasized that the state and the so-called caste, the establishment of the country, will pay for his spending reduction program, and "people will not be touched."
As the first measures show, this principle has proved to be very broadly interpreted.
So, among the first measures, Caputo announced the gradual abolition of subsidies for electricity, gas and public transport.
Today, Argentinian households with low and middle incomes pay about 15-20% of the cost of electricity.
According to the plan of the authorities, the subsidies will be completely abolished by December 2026, but in 2024 they are going to spend $2.5 billion less on them.
Transportation subsidies are expected to save $1 billion next year.
Another article for saving will be government orders for infrastructure projects.
The government promises to abandon them completely.
“There is no money ” is a phrase that Miley constantly repeats and which his supporters print on T-shirts.
Reductions also affected the state apparatus.
The government of Miley changed the number of ministries from 18 to 9, almost halved the number of departments and announced the termination of more than 5 thousand labor contracts concluded in 2023.
Reforms signed by the President
The next step of the Mileus government was an emergency presidential decree, which was signed on December 20.
The Argentine Constitution gives the Head of State the power to change legislation without the prior approval of Parliament in an exceptional situation.
Miley, under this pretext, decided to include in the decree more than 300 articles that cancel or amend existing laws.
The head of state called the main goal of the document deregulation of the economy
For example, the government abolished price controls, including on food and health insurance programs.
Suppliers of the latter after the publication of the decree have already announced an increase in the cost of services by 40%.
Introducing his decree, Miley said that the state will no longer be able to restrict exports.
Deregulation also affected the aviation industry, the rental market, labor relations, tourism and various industries, including wine and sugar.
Some paragraphs raised serious questions about the justification of their inclusion in the emergency decree.
Thus, the document gives football clubs the right to become joint-stock companies.
Miley himself in an interview with LN + explained the need for this item by the fact that the measure will attract foreign investment to the country.
For the sake of investment, the government also repealed a law restricting the ownership of land by foreigners.
The decree is due to come into force on December 29 and can only be repealed by parliament if both chambers vote in favor.
It is not yet clear what will happen to the bill in Congress.
Miley's "Freedom Comes" coalition holds 37 of 257 seats in the Chamber of Deputies and 8 of 72 in the Senate.
They have allies in the opposition, mainly in the Alliance Together for Change (24 senators and 93 deputies), but they may not be enough.
The public also met the decree ambiguously, although Miley himself believes that he can successfully bring it to a referendum if blocked by parliament.
After the announcement of the reform in different parts of the capital, there was a noise from blows to pots - a traditional form of protest in Latin America.
In addition, opposition to the decree was expressed by the largest trade unions in Argentina, not excluding the strike, restrictions on which, incidentally, were imposed by the signed decree.
Mega-bill
Miley ’ s government completed the month with the introduction of a bill to parliament with a package of reforms covering not only the economy, but also criminal law, as well as electoral law, health care, education and defense.
In total, the document contains more than 660 articles.
Especially for its consideration, the executive branch convened an extraordinary session of parliament, which will last from December 26 to January 31.
Among the proposed reforms, I will highlight the increase in export duties.
In his first speech as head of state, Miley promised that the tightening of belts will fall on the shoulders of the state, not private business.
Nevertheless, the first package of bills included the establishment of a duty of 15% for agricultural products, which are now not subject to fees, and an increase from 31% to 33% of the duty for flour and oil.
The authorities promise to subsequently cancel the fees from exporters, but for now the government, they say, needs funds to get rid of the budget deficit.
There is no deadline for the fulfillment of the promise made to exporters.
The bill also included a tax amnesty and the privatization of 41 state-owned companies, including oil and gas YPF, airline Aerolineas Argentinas, Banco Nación Bank, geostationary communications operator ARSAT and railway company Ferrocarriles Argentinos.
Miley noted that the YPF process will take place after reforms within the company, which should increase its value.
This will be his second privatisation.
In 2012, the government of Cristina Fernández de Kirchner decided to return YPF into the hands of the state, expropriating 51% of the shares of the Spanish company Repsol under the pretext of insufficient investment in the country ’ s oil and gas sector.
The conflict with the Spaniards was settled by the payment of compensation in the amount of $5 billion back in 2014, but in 2023 the consequences of the expropriation made themselves felt again – in September, the court of the southern district of New York ordered Argentina to pay $16 billion to the Burford Capital fund, which bought the bankrupt after the nationalization of the company, which owned 25% of the shares of YPF.
Miley ’ s emergency decree stated that the state ’ s share in Aerolineas Argentina ’ s shares would be transferred to its employees.
After that, the country ’ s largest airline, which has also been through privatization and renationalization, will stop receiving support from the budget, thanks to which, in particular, air traffic on not the most popular routes was maintained.
Given the emergence of new competitors in the context of deregulation of the aviation industry, Aerolineas Argentina is likely to be forced to reduce the number of destinations in the country.
At the same time, despite the declared "No Money", the bill provides for a reduction in tax on personal property and exemption from tax on the sale of real estate purchased before 2018.
Where to find money
The bill also included a painful topic for Argentina's foreign debt.
The government proposes to abolish the rule that obliges the executive branch to obtain permission from Parliament to issue dollar bonds in excess of the amount specified in the budget.
Argentina ’ s debt remains an acute problem for the country.
On December 21, the country made another payment as part of an agreement to settle its debt to the IMF.
The loan was issued to the country at the request of Mauricio Macri, who in May 2018, as head of state, turned to the IMF for help against the background of a sharp fall in the national currency.
The funds for the December tranche of $921 million to Argentina were provided by the Andean Development Corporation (ACR).
The country cannot afford to pay from its own reserves.
Already in the period from January 9 to February 1, 2024, Argentina will have to make new payments totaling more than $2.8 billion.
The government is trying to negotiate with the fund to change the agreement, but this does not negate the need to find funds to repay the payments.
One of the sources could be the $6.5 billion currency swap that China has promised to provide to the past government of Argentina.
The Miley administration is trying to gain access to it, but there seems to be little progress so far.
The situation for Argentina is complicated by the numerous statements of Miley and members of his coalition about relations with China.
During the election campaign and after the election, the head of state repeatedly said that he did not intend to promote relations with Beijing, because he did not want to do business with the Communists.
In addition, the foreign Minister of Argentina Diana Mondino said that the country will not enter the BRICS, where it was accepted at the end of the August summit of the group.
Beijing may also be concerned about the Miley administration ’ s refusal to accept government orders for infrastructure projects that fall under the purview of Chinese investors.
After taking office, Javier Miley and his team tried to mitigate past statements.
The new administration invited Chinese President Xi Jinping to the inauguration, which took place on December 10.
He himself, however, did not come, but Miley held a meeting with the Chinese delegation and sent a letter to the Chinese leader, in which he asked him to help gain access to the currency swap.
Another source of financing for Argentina could be the New Development Bank (NDB) of the BRICS, a formal application for accession to which was submitted in October by the then President of the country Alberto Fernandez.
However, the Miley administration apparently decided to freeze the process, since at the end of November Mondino said that Argentina was unable to join the NDB due to the inability to contribute capital.
It is possible that the government of Miley will decide to change its position, but so far this has not been reported.
Several Argentine experts in conversation with me complained that the Latin American country cannot afford to be guided by ideological prejudices in foreign policy, and regretted the missed opportunities in refusing to develop relations with China and BRICS.
Ghostly light at the end of the tunnel
It is possible to evaluate the reforms proposed by Miley differently, but we can definitely say that the Argentines in the coming months will have a hard time.
The government itself recognizes this.
In his first speech as head of state, Javier Miley openly said that the shock measures he proposed would lead to higher unemployment and poverty, as well as lower economic activity and real wages, but then "there will be light at the end of the tunnel."
At the same time, Miley does not call the timing of the onset of a bright
In an interview after the election, he said that it will take at least a year and a half to solve the problem of inflation.
In recent weeks, members of the administration have refrained from making any predictions, promising only to support the most vulnerable segments of the population and to do everything possible to ensure that the period of decline in economic activity passes as quickly as possible.
It remains an open question whether the residents of the country, where, according to the National Institute of Statistics and Census Indec, the poverty rate is already 40%, will have enough patience.
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Milei's policies may alienate Argentina from China, its second-largest export market and a major investor in its lithium industry.

Title:

Content: Sections
Materials
"We don't make deals with communists."
Will Argentina and the United States be friends against China?
Olga Shevchenko
For Argentina, which has no access to international capital markets and where inflation topped 200% last year, China remains the most important investor and lender.
What can the United States offer in return?
It is unlikely that Argentina, which is a serial defaulter, will be granted a loan.
But they can give the F-16 and the status of a partner of NATO.
Javier Miley ’ s presidential campaign in Argentina was one-of-a-kind, from the chainsaw he waved at rallies to his promise to create a market for human organs.
He shouted "Long live freedom!" to the heated crowd and called his own cloned dogs his closest advisers.
These antics, however, overshadowed the most radical point in Miley ’ s platform — a foreign policy aimed at alienating Argentina from its main trading partner, China.
Focus translated Benjamin Gedan ’ s article on the importance of Argentina joining the United States in confronting China.
Throughout his winning campaign, the country ’ s new far-right president, a libertarian economist, made it clear that he would not be a friend of Xi Jinping.
“We don ’ t make deals with the Communists, ” Miley said in an August interview with Bloomberg Television, putting China on a par with Cuba, Nicaragua, Venezuela and North Korea.
Now that Miley is in power, this policy promises to fundamentally change Argentina ’ s international relations, raises the possibility of an economy-catastrophic diplomatic clash between Buenos Aires and Beijing, and provides the United States with an unexpected opportunity to offer an alternative to Chinese trade and investment.
The stakes in a region where China ’ s influence has soared in recent decades and local elites have no incentive to take sides in the U.S.-China rivalry are higher than ever.
Washington should make the most of this opportunity and demonstrate the benefits of cooperation with America.
A brief reference
Miley ’ s remarks surprised many in a region where not joining the growing rivalry between the United States and China has become a tenet of faith.
Trade between Latin America and China has grown rapidly since 2000, reaching $450 billion a year.
Beijing is also investing heavily in the region, both public and private.
The China Development Bank and the China Export-Import Bank have provided $136 billion in loans to Latin America over the past two decades.
It is therefore not surprising that the United States has found few supporters of its idea of secession from China.
President Donald Trump ’ s first secretary of state, Rex Tillerson, has warned U.S. neighbors about China ’ s “imperial ” ambitions.
His successor, Mike Pompeo, followed a similar tone, going to Panama to highlight China ’ s “predatory economic activity. ”
In November, at a meeting of Latin American leaders at the White House, President Joe Biden expressed alarm about China ’ s “debt trap diplomacy. ”
Latin American leaders clearly hold a different view.
Last year, Honduras severed diplomatic relations with Taiwan in favor of official ties with China.
This followed similar decisions by Costa Rica in 2007, Panama in 2017, El Salvador and the Dominican Republic in 2018 and Nicaragua in 2021.
Today, Latin America and the Caribbean accounts for seven of Taiwan ’ s 12 remaining diplomatic partners.
In October, the presidents of Chile and Colombia met with Xi in Beijing, where Colombia and China upgraded their relationship to a “strategic partnership. ”
Both presidents are leftist, but conservatives in the region have also sought to favor China.
These include then Ecuadorian President Guillermo Lasso, a former banker who signed a free trade agreement with China in May.
A total of 21 countries in the region have joined the Chinese Belt and Road Initiative.
So far, this has been particularly true for Argentina, which is the fourth-largest recipient of loans from Chinese banks — a total of $17 billion.
China is the country ’ s second largest export market after Brazil, filling cargo ships on the Paraná River with huge consignments of Argentine corn, soybeans and wheat.
The multi-billion dollar credit line of the People ’ s Bank of China has become a major source of hard currency, helping to pay off imports and repay debts to the International Monetary Fund.
For Argentina, which has no access to international capital markets and where inflation topped 200% last year, China remains indispensable.
In return, Argentina agreed to host a space station in Patagonia run by the People's Liberation Army; offered to use Chinese technology for its next nuclear reactor; expressed interest in buying fighters developed by China and Pakistan; and explored the possibility of building a Chinese port in Tierra del Fuego in the strategic Beagle Strait.
China is a major investor in Argentina ’ s booming lithium industry.
Surprisingly, in 2016, the Argentine Coast Guard sank a Chinese fishing vessel illegally working at sea.
However, Argentina usually pays homage to Beijing.
In 2021, Miley ’ s predecessor, center-left Alberto Fernandez, celebrated the centenary of the Chinese Communist Party, recalling the friendship of Juan Peron and Mao Zedong.
New turn
However, Miley seems ready to put these relations in jeopardy.
While in power, he is not so straightforward in expressing his rejection of China, reluctantly accepting trade and investment relations with that country.
During his inauguration, he amicably exchanged greetings with a senior Chinese diplomat and responded amicably to Xi ’ s congratulatory letter.
However, Miley does not hide his real preferences.
After a meeting at the White House in November, he said Argentina ’ s foreign policy would prioritize “countries that respect freedom. ”
Given Miley ’ s conservatism and his combative and improvisational leadership style, a diplomatic crisis seems increasingly likely.
In just two months in office, he rejected an invitation to join the Chinese-led BRICS bloc in favor of the Organization for Economic Cooperation and Development, called the Colombian president a “communist killer ” and promised to move Argentina ’ s embassy in Israel from Tel Aviv to Jerusalem.
Even among Western friends, he looks like an elephant in a china shop.
At the World Economic Forum in Davos, Miley criticized his colleagues for betraying capitalist principles.
China's Dilemma
For China, the Miley represents a diplomatic challenge.
China has a big appetite for Argentinian exports of agricultural products and minerals, but Xi is known for not turning the other cheek.
China imposed infamous economic sanctions on Australia for criticizing China ’ s mistreatment of the COVID-19 pandemic, and then did the same with Lithuania over Taiwan.
When Brazil ’ s former far-right president Jair Bolsonaro thought about excluding Chinese company Huawei from its 5G wireless network, China threatened to refuse to supply vaccines against COVID.
(He carried out this threat in Paraguay, Taiwan ’ s only diplomatic partner in South America.)
In recent years, Xi has sought to soften the image of China, which has suffered as a result of the pandemic and aggressive “wolf-warrior diplomacy. ”
In Latin America, Xi does not seem to pay attention to the ideologies of presidents and is friends with both conservatives and leftist leaders.
Betting on charm has yielded mixed results.
According to the Pew Research Center, almost half of Brazilians have a negative attitude towards China, the same can be said about a third of Argentines.
In addition, Chinese investment in the region has evaporated in recent years, even as the maturity of previous loans is coming to an end.
However, Xi does not show much tolerance for Miley.
A few days before his inauguration, the Global Times, the newspaper of the Communist Party of China, published an interview with an Argentine economist entitled “The best approach for Argentina is never to take sides. ”
China later expressed disapproval of a meeting (subsequently denied) between Argentina ’ s new foreign minister and Taiwan ’ s senior diplomat in Buenos Aires, leading to fears of a possible freeze on China ’ s credit line.
The experience of the last conservative president of Argentina, Mauricio Macri, is instructive.
Although Macri was more courteous than Miley, at the beginning of his presidency he stirred up Beijing by promising to strengthen ties with Washington, to unveil secret agreements between China and Argentina, and to revisit priority Chinese projects, including two controversial dams in the remote province of Santa Cruz.
In response, China reportedly threatened to suspend other infrastructure investments, including an unrelated railway project, which exemplified the use of unusual cross default and cross cancellation clauses in its overseas contracts.
Macri eventually gave in, and it ’ s entirely possible that Miley would also avoid discord with China.
At the same time, Miley is reputedly much less disciplined and much more ideological than the former businessman and center-right Macri.
Tensions with China could have significant repercussions for Argentina.
In response to Argentina ’ s western pivot, China could restrict access to its market for Argentine food exports, suspend the credit line, stop negotiating a free trade agreement with the Mercosur bloc, cut investment in infrastructure and minerals, and impose other economic sanctions.
Examples of such economic coercion are numerous.
Just this month, Ecuador postponed plans to hand over Russian-made military equipment to Ukraine after Russia threatened to boycott Ecuadorian bananas, one of its main industries.
What about America?
Paradoxically, Miley is a test for the United States as well.
His undisguised admiration led to inflated expectations of support for the ailing Argentine economy.
Argentina's needs are manifold and not easy to meet.
The United States, for example, is unlikely to lend to Argentina, which is a serial defaulter.
Nor is it expected that they will equal the multibillion-dollar mega-projects that China is implementing under the Belt and Road Initiative, such as the construction of railways and dams.
American farmers and pastoralists compete with their counterparts in Argentina, so the United States will not replace China as a major export market.
Finally, Biden does not have as much influence as Xi does in private sector decision-making, and American companies are understandably wary of investing in Argentina.
Disagreements in politics could be another stumbling block, at least for Biden.
Miley calls climate change a “socialist lie, ” opposes abortion rights and gun control, and is loved by far-right figures including Trump, Tucker Carlson and Viktor Orban.
On February 24, he spoke at the Conference of Conservative Policy Initiatives and enthusiastically embraced Trump behind the scenes.
Miley has already tested the Biden administration by trying to control protests in a country accustomed to protesters obstructing traffic and flooding public squares across the capital.
The new government already had several opportunities to demonstrate its approach, including during a nationwide strike in January.
His harsh reaction drew criticism from the Inter-American Commission on Human Rights.
Miley also showed contempt for his opponents in Congress, calling lawmakers who voted against his proposed reforms "traitors" and suggesting that he would be able to rule the country through executive orders.
Such behavior could lead to attempts to impose conditions for supporting Argentina to avoid a repetition of the US Cold War policy in the region, where the logic of “the enemy of my enemy is my friend ” led to blind support for repressive anti-communist regimes.
This was also true in Argentina, where the United States supported a military regime of “dirty war ” that killed an estimated 30,000 people between 1976 and 1983.
During his encouraging visit to Buenos Aires on February 23, US Secretary of State Anthony Blinken rightly hinted at possible disagreements.
Standing next to Argentina ’ s foreign minister at a press conference, he highlighted Argentina ’ s “strong and long history in the field of labor rights, women ’ s and girls ’ rights, and human rights more broadly. ”
If Argentina fails to meet these challenges, or if its democratic institutions are threatened by an authoritarian president, the White House should reconsider its approach.
Violent treatment of peaceful demonstrators or intimidation of legislators, judges or journalists should be considered triggers.
Influence of USA
For now, however, the United States is trying to act in the old way.
That's the right idea.
After all, such love for the US in Buenos Aires has not been felt since the early 1990s, when the administration of President Carlos Menem sought “carnal relations. ”
Biden seconded his energy secretary to Miley's inauguration and later sent his deputy national security adviser for international economic affairs to Argentina.
For his part, Blinken promised that “the people of Argentina can count on us as long as you work to stabilize their economy. ”
The United States has reportedly given the go-ahead for the sale of F-16 aircraft to Argentina, a long-standing request previously rejected by Britain over fears of a new invasion of the Falkland Islands.
Under Menem, the United States included Argentina on its list of “major non-NATO allies, ” and there is now talk of including that country among NATO ’ s official partners (Colombia is the only country in the region that currently holds this title).
The White House is also looking for ways to incentivize purchases of Argentine lithium for electric vehicle batteries, although the inflation reduction law favors minerals for batteries produced and processed domestically or in countries that have signed a free trade agreement with the United States.
NASA has expressed interest in training an Argentine astronaut to fly to the International Space Station.
But the United States must go further and faster.
While Argentina is curbing excessive public spending, the U.S. government must take steps to build infrastructure to significantly expand food and energy production and include Argentina in U.S. clean energy supply chains.
A lot depends on the US strategy towards Argentina.
Even the active support of Argentina from the United States will not be able to compensate for the deterioration of Argentina ’ s relations with Beijing – China will remain an influential player in this country.
However, if the United States helps stabilize Argentina ’ s economy, it will present it as a trusted friend heading South America ’ s second-largest economy.
It will also demonstrate the value of partnering with the US for presidents willing to resist the temptations of China ’ s huge market and pocket-stuffing.
On the other hand, the refusal to support Miley during this difficult period, when deep budget cuts and rampant inflation are undermining his popularity, will serve as a negative signal, reinforcing the desire for non-alignment throughout the Western Hemisphere.
About the author
Benjamin N. Gedan (@ benjamingedan) is a Ph.D., director of the Latin American Program at the Woodrow Wilson International Science Center, associate professor at the Johns Hopkins School of Advanced International Studies, and former director of the South America Division at the National Security Council in the Obama administration.

Argentina has a $9.494 billion trade deficit with China and relies heavily on its investment.

Title:

Content: Argentina ’ s presidential candidate, Mirai, said he would freeze trade relations with China, asking “Do you want to do business with murderers? ”
Argentine presidential candidate Millai expresses concern about relations with China. Photo Credit: GettyImages
What we want you to know is
When asked how he sees relations with China, Argentina ’ s second-largest trading partner, Millet said he would not do business with China: “In China, people are not free, they can ’ t do what they want, and when they do, they get killed, ” Millet asked a Bloomberg reporter:“ Would you do business with murderers? ”
Javier Milei, who has just won Argentina ’ s presidential primary, said that if he wins the presidential runoff on October 22, he will freeze official trade relations with China, asking “Will you do business with murderers? ” There will be different answers to China ’ s freedom and security.
The results of Argentina's presidential primary election on the 13th of this month shocked the society, the far-right liberal economist Millet won the highest number of votes with more than 7 million votes, beating the ruling party and the largest opposition party in Argentina's election, and is likely to become the next president of Argentina in the next final election.
Bloomberg published an interview on Monday detailing how he handles Argentina ’ s international affairs.
In the interview, Millet said Argentina ’ s priority is to do business with “the civilized side, ” that is, the West, such as the United States and Israel.
Asked how he sees relations with China, Argentina's second-largest trading partner, Millet said he would not do business with China:
“In China, people are not free, they can ’ t do what they want to do, and when they do, they ’ re killed, ” Millay asked a Bloomberg reporter,“ Do you do business with asesino? ”
Millay said he would not do business with Communists, including Cuba, Venezuela, North Korea, Nicaragua and China, and that China could be a business partner for Argentine private enterprises, that he would not interfere, but that his government would not sign agreements with the Communist Party or encourage relations with it.
A rupture in relations with China would do little harm to Argentina.
China is Argentina ’ s second largest trading partner after Brazil. According to 2022 data, Argentina has a trade deficit with China of US $9.494 billion, exports of US $8.022 billion and imports of US $17.516 billion.
China has also provided Argentina ’ s central bank with $18 billion in currency swaps to repay Argentina ’ s debt to the International Monetary Fund.
Millet ’ s economic adviser, Diana Mondino, who is expected to become his foreign minister in the future, rushed to put the fire on Millet in an interview, saying that Millet ’ s remarks about China actually meant that “we will not accept the signing of opaque, opaque, confidential agreements, ” and she criticized the current economy minister, Sergio Massa, who is also a presidential candidate, for negotiating with China. How much our country will pay for the yuan is inappropriate in state-to-state relations. ”
And Chinese Foreign Ministry spokesman Wang Wenbin was asked about Milai's remarks at a regular press conference on the 17th, Wang Wenbin said that China is a country under the rule of law, and the personal freedom of Chinese citizens is sacred and inviolable under the protection of the Constitution.
Under the leadership of the Chinese Communist Party, China has achieved two miracles of rapid economic development and long-term social stability, and the happiness and security of the Chinese people are increasing day by day.
Wang also welcomed Millet's "come to China for a walk and a look," saying he believed he would come up with a completely different answer to "the question of whether the Chinese people are free or not, and whether China is safe or not."
In the same interview, Millet also said he would withdraw from Argentina ’ s MERCOSUR with Brazil, Uruguay and Paraguay, calling the MERCOSUR “a very poor customs union that creates trade inequality and hurts its members. ”
The MERCOSUR has yet to reach a free trade agreement with the EU due to internal disagreements (the Argentine government wants to protect its economy from international competition, while the governments of Uruguay and Brazil want to further remove trade barriers).
Asked if he wanted former US President Donald Trump, whom he revered, to return to the White House, Milay cautiously replied that “the question is for the Americans to decide, ” but said that“ I probably prefer the Republican image to the Democratic Party, ” stressing that the US is an important strategic partner for Argentina and supports the move of the Argentine embassy in Israel from Tel Aviv to Jerusalem. The policy is the same.
Argentina ’ s primary results last weekend hit the market hard, with the Argentine peso falling by more than 20% and Argentina ’ s inflation rate reaching 113% and rising rapidly.
Many businesses in Argentina have not been able to readjust their prices, some have directly marked the price of foreign currency against the peso, and some have simply suspended supply, resulting in many goods being blocked.
As a response, the government of Argentina has frozen fuel prices until October 31.
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Editor-in-chief: Chiu Yijun

What issue did Milei want to address without printing money?

Milei's economic reforms include privatization and deregulation, aiming to eliminate the government deficit by 2024.

Title:

Content: Why did Argentina give up on joining the BRICS?
You don't have to be too serious about the new president, Millet.
Author: Ye Dehao
Published: Updated:
December 29 is the last government working day in 2023.
The Argentine government issued a letter to the BRICS countries as early as the 22nd, indicating that Argentina is not suitable for joining the BRICS at present, saying that its foreign policy is very different from the previous government.
Argentina ’ s new president, Javier Milei, a far-right liberal who was sworn into office on December 10, has been highly pro-American and pro-Israel, and his formal decision to forgo joining the Golden Brick, which is seen as close to China, comes as no surprise.
Negotiations are fruitless?
After Millet ’ s victory in the second round of voting at the end of November, Chinese Ambassador to Argentina Wang Wei quickly met with then-Foreign Minister Diana Mondino, and Millet himself released a Spanish translation of a personal letter sent to him by Chinese President Xi Jinping, thanking Xi Jinping for holding up a letter of “common interest ” between China and Argentina.
Although Millet, who had indicated during the election that he would not talk to communist countries (for Millet during the election campaign, this included China and Brazil), expressed goodwill, the foreign minister said publicly on social media in early December that he would not join the BRICS.
Subsequently, at the invitation of Argentina, China sent special envoy of President Xi Jinping and Vice Chairman of the Standing Committee of the National People ’ s Congress Wu Weihua to Buenos Aires to attend the inauguration ceremony of Milai on December 10, and met with Milai with Wang Wei the following day.
Mirai later wrote back to China, which Argentine media said contained references to a currency swap agreement between China and Argentina, when one of Argentina ’ s loans to the International Monetary Fund (IMF) was due to be repaid.
Later, Chinese officials also met with Milay ’ s nominee for governor of Argentina ’ s central bank (although Milay had stated during his campaign that the central bank would be abolished and fully dollarized), as well as his economy minister, Luis Caputo.
Ukrainian President Leonid Zelensky also attended the inauguration ceremony of Millet.
(Reuters)
In the end, there seems to be no progress on the currency swap agreement and the related issues of joining the BRICS.
By December 14, Reuters had reported that Milay had reached a loan agreement with the Development Bank of Latin America and the Caribbean (CAF), allowing Argentina to repay the IMF as scheduled on December 21.
On December 19, Argentine media revealed that China had suspended the currency swap agreement with Argentina, saying that Beijing had recalled Wang Wei to Beijing the previous day.
The letter from Argentina renouncing its accession to the BRICS came on the 22nd.
Argentina ’ s renunciation of BRICS membership has been widely interpreted as a setback for China ’ s efforts to “expand ” solidarity with the global South at the BRICS summit in South Africa in August 2023.
At that time, the BRICS decided to invite the United Arab Emirates, Saudi Arabia, Iran, Argentina, Egypt, and Ethiopia to join the BRICS.
However, to put it another way, Millet ’ s renunciation of joining the Golden Brick was just an act of symbolic significance greater than practical significance, and his attitude toward China and even his right-wing libertarian stance have weakened significantly since his election.
Foreign Minister Guido Mondino has made it clear that he will not abandon diplomacy with China and Brazil (Argentina ’ s first and second largest trading partners, respectively).
Millet has quickly appointed a new ambassador to China, and his letter to the BRICS states that he hopes to deepen bilateral relations and increase trade and investment contacts with other countries, and hopes to meet with the leaders of the BRICS countries.
On December 10, Millet addressed supporters after he was sworn in as president. (Reuters)
During the campaign, there were fears that Millet would behave badly when he came to power.
However, the majority of those who were elected were on the right wing.
For example, Economy Minister Caputo is a member of former President Mauricio Macri ’ s Juntos por el Cambio party, and Central Bank governor Santiago Bausili was Finance Minister from 2015 to 2019.
The Adventures of Shock Therapy
Of course, after coming to power, Millet quickly pushed for “shock therapy ” economic reforms, immediately devalued the Argentine peso by half (but its exchange rate remained below the black market), and declared a two-year economic emergency, proposing more than 300 measures in the form of presidential decrees, from loosening controls on food retailers to loosening the use of foreign exchange, from privatization of state-owned enterprises to deregulation of proprietary medicines, from labor protection to employee restrictions. All strikes are complete.
Unions in Argentina have mobilized a revolt, but the scale of the demonstrations has not reached enough to worry Millet.
Security officials from the Milai authorities also issued a stern warning against the demonstrations, which seemed to have a degree of deterrent effect.
On December 29, the economic emergency in Milai came into effect, with demonstrators gathering in the streets of Buenos Aires to protest against economic reforms.
(Reuters)
At the end of the year, Millet also sent more than 600 reform bills to Congress, asking Congress to initiate a special session from December 26 to January 31 to help Argentina move forward quickly with reforms.
The bill includes legalizing Millet ’ s previously declared economic emergency, abolishing the primary election system, increasing penalties for various protest-related crimes, protecting the right to self-defense and strengthening the police, listing state-owned enterprises that can be privatized, allowing the legalization of undeclared property, modifying policies related to the oil industry (such as the government will not impose price limits), and temporarily handing the president more legislative powers on taxes, pensions, security, and other items.
Millay ’ s government says it wants to reduce the government deficit to zero by 2024 (which would have been about 5% of GDP), thereby drastically reducing the size of the government, cutting subsidies for electricity and transportation, cutting funding to local governments, and temporarily raising import taxes and increasing benefits such as the value of food cards to help those most in need.
With only 40 of the 257 seats in the Brazilian Chamber of Deputies and 7 of the 72 seats in the Senate, Millet ’ s party, even with less than half of the traditional right-wing “working together to change ” support, is hoping to use popular opinion to put pressure on Congress to show that if Congress is unwilling to pass his reform bill, it will resort to the law (no law). Binding) referendum.
[Here: Chainsaws are a symbol of Millet ’ s reformist economy, and he often picks them up to campaign events.]
Millet ’ s “crazy ” economic reforms, and the voters ’ support for him, are understandable. After all, Argentina ’ s economy has been a tragedy for more than a century, and its per capita GDP was higher than that of Germany and France 100 years ago, but it is now several times behind them, from advanced countries to developing countries.
According to statistics, its ratio of negative growth to positive growth has been worse than that of war-torn Iraq and Sudan since 1950, and it is now the largest recipient of IMF assistance since its inception.
Not to mention that Argentina has an inflation rate of more than 100%.
Millet has long shown that his shock therapy will bring economic pain, but voters have limited tolerance for the pain, and the pain is likely to grow.
The street demonstrations are not threatening Millet at this point, but if Millet ’ s new deal doesn ’ t work, the situation will be very different in a few months.
In the midst of a crisis-ridden march of economic reform, Millet ’ s foreign policy will remain at the symbolic level, and will never dare to do anything that will really negatively affect the Argentine economy.
Giving up on joining the Brick is just one example.
We don ’ t have to read this diplomatically too seriously — it ’ s just the political norm in Latin America, where the ideologies of the right and the left are fiercely opposed.

What issue did Milei want to address without printing money?

The president's economic reforms have sparked clashes outside parliament over cuts to pensions and labor rights.

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Content: International
2024-06-13 16: 06: 58
Argentine parliament passes economic reform plan, sparks violence
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Argentina ’ s President Javier Milei ’ s proposed economic reforms, which were passed by a narrow margin in Congress, have sparked clashes outside the parliament, with protesters saying the reforms hurt millions of Argentines and local media describing the scene as a “battlefield. ”
Millet, who was elected president last year, is a right-wing economist in Argentina who was elected president at a time of severe economic distress.
Argentina ’ s annual inflation is close to 300%, leaving more than half of Argentines in poverty.
Among the reforms proposed by Millet are declaring the country into an economic emergency, cutting pensions and diluting labor rights.
Left-wing political parties, trade unions, and social organizations opposed it.
The bill was tied with 36 votes in favor and 36 against, but the Speaker of the House, Vice President Victoria Villarruel, voted in favor.
“For all Argentines who are suffering, waiting and don ’ t want to see their children leaving their country, my vote is decisive.
The motion will be considered on a case-by-case basis and is expected to be passed on Thursday (13), after which it will be returned to the next House for final implementation.
The president said protesters were trying to stage a coup.
However, demonstrators outside the parliament shouted "the country is not sold, it is to be protected", and said: "Why does the head of state hate his own country?" According to local media, the local "battlefield", demonstrators threw gasoline bombs and stones at riot police officers, and some observers and opposition lawmakers said that about 10 people needed medical treatment at the scene of the demonstration, including at least five anti-opposition lawmakers.
Argentine police said at least 20 officers were injured and 15 were arrested.
Argentina ’ s presidential office issued a statement thanking the defense forces and describing the demonstrators as “terrorists trying to launch a coup. ”
“We are going to change Argentina and make it the freest country in the world, ” he said. After he came to power, he cut cabinet posts in half and cut 50,000 civil servants, halted new public works contracts and eliminated subsidies for fuel and transportation.
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Milei has labeled protesters as "terrorists" and restricted the right to assemble in Argentina.

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Argentina’s Javier Milei Is Looking To Bluff His Political Rivals

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And just like that, Argentina’s ultra-libertarian president, Javier Milei, sent the whole socio-political-economic ecosystem into disarray

Praised for his moderation and pragmatism during the first few weeks of his presidency, the self-proclaimed anarcho-capitalist has now put in place a series of controversial measures which have divided public opinion, generating a new iteration of Argentina’s infamous “grieta,” our very own version of the polarization that has now become the norm across the so-called ‘Western World.’ But, it’s no longer about the antagonism between Kirchnerites and their opponents, mainly represented by Mauricio Macri and the Juntos por el Cambio coalition, but about those blindly in favor of the wild-haired economist and those denouncing his every move as a diabolic, anti-democratic part of a ferocious plan to tear down the tenets of Argentine society.

Both sides seem to agree that he is executing a carefully crafted plan that will either elevate Argentina back to the lost status of “global power” of the late 19th century or ravage the nation in order put it on the chopping-block and conduct a fire sale to hand over the crown jewels to global financial elites. Those with access to the Casa Rosada tell a different story though, one of amateurism and incomplete staffing that would suggest the La Libertad Avanza coalition is acting more out of necessity than Machiavellian genius.

Milei finally broke out of his honeymoon period with those who didn’t vote for him after launching a massive package of reforms through a “decreto de necesidad y urgencia,” an emergency decree (DNU) which has become the standard practice for presidents seeking to bypass Congress and is generally used for less ambitious projects. The DNU is truly massive, with 366 articles including the repeal of multiple laws which call into question the constitutionality of the measure, even if governing via DNU is already contrary to the spirit of the Constitution and something that has happened in each of the last several administrations. It was quickly followed by the Omnibus law, equally as massive in its scope and ambition, and its capacitiy to divide the political field.

Put together by liberal economist Federico Sturzenegger, who ran the Central Bank under Macri and helds no role in the Milei-Villaruel administration until after the project was presented, the “mega-decree” was announced by national (and obligatory) broadcast several weeks in a dramatic scene that had Milei as the protagonist in the foreground and his whole team standing behind, statue-like, as the president read sternly.

Earlier that day they had scored a political victory with Security Minister Patricia Bullrich’s “anti-picket” protocol making its debut, effectively diluting the first public protest against the government. Some reports indicated there was more security than 'piquetero' protesters. Weeks later, the General Confederation of Labor united the pan-Peronist opposition in a massive march that managed to remain cordial, respecting Bullrich's protocol by trying to show political muscle in the streets.

The reform package conformed by DNU and Omnibus bill immediately generated the reaction of Milei's political opponents, along with a substantial portion of the population who took to the streets for a traditional “cacerolazo,” a protests with pots and pans reminiscent of the worst days of the 2001 crisis. There are no coincidences. Congressional leaders from the pan-Peronist Unión por la Patria coalition spoke with union strongmen from the General Confederation of Labor (CGT) umbrella union group. Members of the Unión Cívica Radical (UCR) warned of unconstitutionality and specialist lawyers indicated Milei was trampling all over the Constitution by failing to respect the separation of powers. Buenos Aires Province governor Axel Kicillof, probably the leading member of the Peronist opposition, and his government decided to ignore Bullrich’s “anti-picket” protocol claiming it violated the constitutional right to protest. A few weeks before, Economy Minister Luis ‘Toto’ Caputo unveiled the government’s initial economic plan, generating a similar reaction in the political field which didn’t seem to make its way to the general population. The situation is beginning to change and as the actual implications of the Milei administration’s actions make an impact, social and political actors will begin to respond.

There should be few doubts that one of the strongest points of La Libertad Avanza’s electoral strategy had to do with communications, particularly on social media. These early moves suggest they will try and double down, betting on the use of their skills to try and compensate for the lack of political support, despite a strong victory over both Sergio Massa and the Peronists, and Bullrich and Juntos por el Cambio. Toto Caputo, however, is known to be particularly uncomfortable with the media. His pre-recorded message several weeks ago announcing tough economic measures — many of which contradicted Milei’s campaign promises, particularly tax hikes — was delayed several times reportedly due to the need for multiple takes and Milei’s direct involvement (or maybe indirectly through sister Karina). The second measure he announced, for example, was a year-long reduction of government advertising to zero – a direct strike to the beleaguered media industry and a measure that has practically zero impact on the deficit but high popular approval. The over-dramatization of the security operation to contain a moderate-to-small protest early into the presidency, together with pictures of Milei and Bullrich supervising from police headquarters, allowed them to take advantage of the far-left Partido Obrero to score an easy win and show his electorate that they can control the streets. Yet, controlling a couple of thousand protesters is one thing. The CGT protest that brought together the political and social power of the unions remained under control, and that's a win for the government, but it was a political protest. If the middle class begins to lose its temper, and expectations, Milei could face a much more difficult scenario.

The “basis for the reconstruction of the Argentine economy” reform package could be another attempt to win the communications game and take the spotlight to appear active in the eyes of the public opinion. With absolute minorities in both chambers of Congress and several controversial reforms included in a massive package passed by Milei’s mega-DNU, it's difficult to imagine that it will quickly pass in the Chamber of Deputies, despite an early win at the commission level with the help of the former Juntos por el Cambio coalition. Furthermore, several interest groups are putting together legal arguments to dispute the issue in court, especially the labor reform which has been stayed. It could quickly make its way to a Supreme Court that has already proven eager to interject politically.

Ultimately, most, if not all, of the regulations, laws, and measures included in the decree will have to make their way through Congress and will therefore be subject to negotiations and amendments. Yet, Milei has shown initiative and wants to maintain, or extend, the popular support which took him to victory in the run-off and has already generated a circumstantial majority in the Senate to defeat the Peronist caucus and at the commissions to get the Omnibus bill past the first obstacle.

There are risks that the ultra-libertarian could prove authoritarian and anti-democratic. He’s shown some of that in the past, particularly by claiming he would govern by plebiscite if he didn’t have the support of Congress (something Hugo Chávez did to amend the Venezuelan constitution) and by picking a dictatorship denialist as his running-mate. Many of his detractors have pointed to signs that suggest Argentina could descend into a state of totalitarianism, and this emergency decree fuels their suspicion.

It’s not clear whether the conditions for such a situation are in place. For now, he seems to be bluffing his political opponents. We’ll see if someone calls his hand.

This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.

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Javier Milei's economic reforms in Argentina aim to address the country's challenges, but their outcome is uncertain and potentially risky.

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Content: Milei Experiment

In the tangled web of Argentine politics and economics, one figure has emerged as both a lightning rod for controversy and a beacon of hope ~ President Javier Milei.

In the tangled web of Argentine politics and economics, one figure has emerged as both a lightning rod for controversy and a beacon of hope ~ President Javier Milei. His first 100 days in office have been marked by a whirlwind of fiscal manoeuvres, bold policy shifts, and commitment to economic reform. But as Argentina teeters on the edge of uncertainty, Mr Milei’s ambitious agenda raises questions even it offers solutions. At the heart of Mr Milei’s strategy lies a radical departure from conventional wisdom.

Brandishing a chainsaw as a symbol of fiscal austerity, he has pledged to slash spending and achieve a budget surplus, a feat unheard of in a country plagued by decades of fiscal mismanagement. His unorthodox approach has garnered both praise and scepticism, as Argentines grapple with the harsh realities of rising poverty and economic contraction. The cornerstone of Mr Milei’s economic vision is the elimination of money-printing and the pursuit of a unified exchange rate. By devaluing the peso and cutting interest rates, he aims to rein in inflation and restore confidence in the economy.

Yet the path to stability is fraught with pitfalls, as the spectre of recession looms large and investors remain wary of the government’s opaque monetary policies. While Mr Milei’s commitment to reform is commendable, his political isolation poses a significant obstacle to meaningful change. With little support in the Argentine Congress and a fragmented coalition, he faces an uphill battle. The recent defeat of a sprawling omnibus bill highlights the challenges ahead, as competing interests and entrenched political factions threaten to derail Mr Milei’s ambitions. Moreover, the uncertainty surrounding Argentina’s future monetary regime adds another layer of complexity to the equation. Will Mr Milei pivot towards dollarization or pursue a more gradual approach to currency reform? The lack of clarity on this front only serves to fuel investor anxieties and exacerbate economic volatility. Amidst these challenges, Mr Milei’s fate hangs in the balance. How much economic pain can Argentines endure before turning on their unconventional leader? And can Mr Milei muster the political support needed to navigate the treacherous waters of Argentine politics?

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In the end, the trajectory of Mr Milei’s presidency hinges on the delicate balance between economic resilience and political manoeuvring. Should he manage to maintain public support and secure crucial alliances, Mr Milei could emerge as a formidable force in next year’s mid-term elections. However, any slip in popularity could spell disaster for his ambitious agenda, opening the door for his adversaries to dismantle his presidency. Whether Mr Milei’s gamble will pay off remains to be seen. But one thing is certain. In a country accustomed to political upheaval and economic turmoil, the journey towards reform is bound to be fraught with uncertainty and adversity. Only time will tell whether Mr Milei’s vision for Argentina’s future will lead to prosperity or further hardship

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