Newly elected President of Argentina Javier Milei of La Libertad Avanza (Photo by Tomas Cuesta/Getty Images)

Shock therapy, please

A frustrated Argentina has chosen radical economic reform

Artillery Row

Whatever fears you read about Argentina’s next libertarian president, known as El Loco (the crazy one), the country that voted for him is now celebrating the landslide election of Javier Milei. As a leader, he is hailed to end decades of decline and turn this country around. Maybe the wider world should hit the pause button, suspend disbelief and recognise what’s at work here: a people saying loudly, and democratically, Basta! Enough!

Enough of failure. Enough of poverty in the land that has it all. Enough of those who used the state to fatten their bank accounts with impunity. Yes to a “root and branch revolution” that promises to deliver a future not just for some, but for all. Argentina never fails to surprise. This time that wider world has good reason to care, given the wars in Europe and the Middle East, and the resultant fears about everything from food to energy.

In the eyes of the voters here, the folks in power had for so long buried decency in a mafia-style political operation, designed to keep themselves in power forever — robbing one of the richest countries on the planet for themselves. They have been making almost half the population certifiably poor and dependent on government handouts, despite a rhetoric of inclusion and social justice that had the old Left in Europe celebrating the ruling Peronist party.

In this scenario, libertarian maverick Milei, an economics professor barely known three years ago, stormed the country with a chainsaw, promising to slash the state and get rid of the entrenched caste of politicians. Anarcho-capitalist, he calls himself. He’s never knowingly undersold.

Milei’s voters were overwhelmingly young, across the entire country, showing how much this means to them. The next generation of Argentines saw this election as do or die — or do or leave — and voted in overwhelming numbers for the former goalkeeper with a boyhood aspiration to be Argentina’s Mick Jagger. To them, the economics professor offered hope: a future that might keep them in a country they love. His message was direct and TikTok savvy: completely blunt on the need for radical change, with private property and capitalism as the guarantees of freedom.

It worked. On the 40th anniversary of its return to democracy, Argentines stood up to be counted and positively chose shock therapy. To protect the integrity of their polling stations, tens of thousands of volunteers watched over every vote cast. Amazingly, all sides ended up acknowledging that the democratic process on voting day was exemplary; the result was accepted as the will of the majority. Again, a positive.

Milei will lead a country that could feed more than a billion people, as well as its own

It is the second time in three elections that Argentines vote the Peronist machine out. Eight years ago there was a centre-right businessman, Mauricio Macri, well known to the country because he had been the boss of Boca Juniors, a football team beloved by millions. He stunned the ruling Peronist movement by winning a tight election on the promise of reform. In four years, Macri was unable to deliver, hampered by weak congressional support and a preference for gradual change. In the end, after Macri took out the largest IMF loan in the country’s history, the Peronists returned, this time promising to go for broke, Vamos por todo. That brought in President Alberto Fernández, widely considered a puppet of his Vice President, Cristina Fernández, who called the shots until she was convicted on counts for corruption for her years in power. The past four years have seen poverty increase, debt levels rise and sky-high inflation.

In this context, the landslide defeat by Javier Milei is not surprising. The remarkable strength of the Peronist political machine is that they still secured 44 per cent of the vote, given that their candidate was Sergio Massa, the economics minister overseeing inflation, estimated to reach 180 per cent by the end of the year, with foreign reserves barely existent.

The new president will have to deal with what he calls “an economic time-bomb”, which the Peronists are leaving him. He campaigned on drastic action, warning this is not the time for gradualism. Yet he will need to make friends, not enemies, and quickly — to negotiate to pass reforms in the Congress and the Senate, even if a conservative majority is numerically possible.

Yet his bullishness remains undaunted. “It will take us 35 years,” he told the crowds on election night, before announcing his intention to privatise huge swathes of the government machinery, from the state oil company to the government’s TV network. “But we will return to the place that should have always been ours, as a global powerhouse. It will take 35 years, but we can do it.”

To get there, he promises to take a chainsaw to the big state machinery — planning to scrap eight ministries, cut government spending by 15 per cent in his early days, and make Argentina the open-market, free-trade engine room of Latin America. “You can question the way he announces policy,” says one of his closest advisers, “but not where he’s coming from. It’s to make our country the sum of its parts, the best it can be, and for all of us.” If the wider world can celebrate Argentina’s democracy, it should also care about what comes next, specifically fulfilling its potential.

When Argentines puff up their chests and speak of their country’s potential, they are not simply sharing their despair at how far they have fallen from once being one of the five richest countries in the world. Milei will lead a country that could feed more than a billion people, as well as its own. That’s 15 per cent of humanity, at a time when the world knows the food supply chain is endangered by Putin’s war in Ukraine. That’s one reason to care about what comes next in Argentina.

A massive pipeline recently ended Argentina’s dependence on imported gas

Milei will have his hand on the spigot of oil and gas from an enormous energy field, called Vaca Muerta (dead cow). The size of Belgium, it is the world’s second largest such deposit. Companies like Shell and Exxon have already made big bets there, and a massive multi-billion dollar pipeline has recently ended Argentina’s dependence on imported gas. It is heralding an export boom precisely when the energy-hungry European market is stressed over the fallout from the war in Ukraine. That’s another reason to care about Argentina’s future.

Then there’s lithium, the essential element to the electric car revolution, with Argentina boasting a serious slice of the world’s reserves. Capital has flowed in, first from the Australians, then the South Koreans, now the Chinese, with 40 lithium projects underway. Argentina is expected to overtake Chile, currently world leader, and produce more than 20 per cent of the world’s output by 2027. When China moves in, as it has, we should all care.

To the world outside, the shock tactics of Milei’s campaign triggered alarm bells, as much as Donald Trump celebrating his election. We’re told, however, that one of Javier Milei’s role models is Margaret Thatcher. She was “a brilliant leader”, he declared late in the campaign, suggesting at least the potential for conversation, not conflict, with Britain over the Falklands. (Soon afterwards, he called Argentinian demands on the Falklands “non-negotiable”, but to the dismay of the die-hards he left open the door to a Hong Kong-style settlement.)

To his supporters, El Loco is known as the Lion, el León, because of his crazy mane of trademark hair. Noticeably, his tone became more presidential in the days post triumph. Yet the actions were not toned down: he promised to live up to the mandate, step by step, for shock therapy on the economy, just as he has drastically changed the political landscape. If the mandate sounds crazy, it is from a country that said a resounding “no” to corruption and said “yes” to the Lion. He believes his people, with a lot of hard work, can once again be a champion in the world and not just on the football pitch. Vamos la Libertad, Carajo. “Freedom, dammit,” he rallies, as the masses on the streets shout it back in unison. Indeed, Argentina never fails to surprise.

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