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Javier Milei's plan to save Argentina: Full interview
Six months into his first term in office, Javier Milei isn't afraid to be blunt about how he plans to save the country's economy. The staunchly libertarian Argentine President swept into office easily on an unconventional slogan: "There's no money." As he tells Ian Bremmer, he’s spending nearly every waking hour trying to reverse decades of misgovernance and economic mismanagement. And so far, most international experts agree: it seems to be working.
When he ran for office, the economics professor-turned-TV pundit-turned-presidential-candidate vowed to eliminate Argentina’s central bank and threatened to replace the Argentine peso with the American dollar. But once Milei came to office, a more pragmatic approach to economic reform emerged. And in just six months, his administration has managed to slow Argentina's 300% annual inflation and turn a budget deficit into a surplus. "We have actually completed the largest reform in the history of Argentina," he proudly tells Bremmer in an exclusive new interview for GZERO World, highlighting the scale of his efforts to overturn what he calls "100 years of decadence."
In this wide-ranging conversation, Milei lays out his “shock therapy” approach to reversing Argentina’s economic missteps, his democracy vs autocracy geopolitical outlook, and his thoughts on China and Israel. The coming years will tell if the fiery new president’s idiosyncrasies may just end up being some of the least noteworthy things about him.
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10 images that captured 2023
With 2023 in our rearview mirror, here are some of the images that defined the tumultuous year: from Fulton County, Georgia to Gaza City,
Feb. 5: Spy Balloon Downed
Credit: Sipa USA via Reuters
Sailors assigned to Explosive Ordnance Disposal Group 2 recover a Chinese high-altitude surveillance balloon off the coast of Myrtle Beach, South Carolina, Feb. 5, 2023.
Feb. 10: Earthquake shakes Turkey and Syria
Credit: Umit Bektas/Reuters
An aerial view shows damaged and collapsed buildings in the aftermath of a deadly earthquake in Hatay, Turkey February 10, 2023.
March 23: France protests pension changes
Credit: Alain Pitton/NurPhoto via Reuters
Riot policemen stands amid clouds of tear gas as more than 70,000 people protest in Toulouse against French President Emmanuel Macron’s attempt to raise the national retirement age and change pension benefits. March 23th 2023.
May 6: King Charles III coronated
Credit: Stefan Rousseau/Pool via REUTERS
King Charles III waves as he leaves the balcony of Buckingham Palace, London, following his coronation, May 6, 2023.
Jun. 7: Canadian wildfires
Credit: REUTERS/Andrew Kelly
People ride bicycles at 6th Avenue as haze and smoke caused by wildfires in Canada blanket New York City, New York, U.S., June 7, 2023.
Aug. 24: Trump mugshot
Credit: Reuters
Former U.S. President Donald Trump in a police booking mugshot released by the Fulton County Sheriff's Office, August 24, 2023.
Sept. 25: Milei’s chainsaw
Credit: REUTERS/Cristina Sille
Argentine presidential candidate Javier Milei holds a chainsaw next to Carolina Piparo, candidate for Governor of the Province of Buenos Aires, during a campaign rally, in Buenos Aires, Argentina September 25, 2023.
Oct. 7: Noa Argamani kidnapped
Nova music festival attendee Noa Argamani reaches out to her boyfriend, Avinatan Or, as they are kidnapped by Hamas terrorists on Oct. 7, 2023.
Oct. 9: Gaza’s children bombed
Credit: IMAGO/Medhat Hajjaj/apaimages via Reuters
A child at Shifa Hospital in Gaza City rests after surgery, having been wounded in an Israeli attack. October 9, 2023.
Oct 23: Afghanistan's historic Cricket World Cup win
Credit: ANI via Reuters
Hashmatullah Shahidi celebrates Afghanistan's victory against Pakistan. Oct 23, 2023
What will 2024 bring? Make sure to subscribe to the GZERO Daily newsletter to keep up.
The Graphic Truth: Argentina's Inflation Problem
Argentina is facing some of the world’s highest inflation, with rates this year climbing back into the triple digits for the first time in three decades in February. Some economists forecast that South America’s second-largest economy could break the 200% inflation mark before the year is out, exacerbating the ongoing economic crisis that has left four out of 10 people in poverty as prices rise faster than wages.
How did things get so bad?
- Argentina never fully recovered from an economic crisis in 2018 when its peso lost nearly half of its value against the dollar. The IMF responded by loaning Argentina a record $57 billion. The loan failed to stabilize the economy, and the country later defaulted on it and on its own government loans. Annual inflation has stayed above 50% ever since.
- During the pandemic, the government printed money and implemented currency controls and price freezes, laying the groundwork for inflation to soar.
- This year, the economy has been crippled by low GDP growth, high prices, reduced consumer spending, and droughts destroying key agricultural exports.
This is having serious political consequences. Rising prices have spurred a cost-of-living crisis, looting, and rampant poverty. The crisis is boosting support for Javier Milei, a radical libertarian who won the primary election earlier this month on promises to dollarize the economy. His unexpected success further destabilized the economy, adding to inflation. But rising inflation is good news for Milei, who can pin the economy’s problems on the establishment parties he hopes to beat in round one of Argentina’s presidential election in October.
Argentina’s economy teeters on verge of collapse
Argentina’s economy is on thin ice, especially since the radical libertarian candidate Javier Milei unexpectedly emerged as the front-runner in the presidential primary this week.
Milei is promising to dollarize the economy and abolish the central bank if elected this autumn. His primary success sent shockwaves through the markets, forcing Economic Minister Sergio Massa – who is also running for the presidency – to devalue the peso’s exchange rate, adding to already soaring inflation, and forcing him to raise interest rates from 97% to 118%.
Wait, why did a primary destabilize the economy? Argentina has been experiencing hyperinflation – with prices rising an average of 6% a month – so the risk of any political turmoil setting off economic chaos was high.
Milei's primary success sparked fears of impending dollarization, spurring Argentines without access to dollars to rush to buy them in the streets, further devaluing the peso.
The official peso-dollar exchange rate now stands at 350 pesos per dollar and 665 per dollar in the “parallel” street market, a nearly 10% drop in value from before the primary.
Massa has promised no more devaluations before the election. But that could lead to government bankruptcy, especially if banks decide to collect on the government's mounting debt or the IMF withholds funds in response.
Some analysts view the strong support for Milei over the establishment party as evidence that the country is ready for deep and painful free-market reforms. But according to Luciano Sigalov, a Latin America researcher at Eurasia Group, Milei 's popularity is bad for the economy, and a bad economy is great for Milei.
“The likely prospect of a Milei victory and the risks from his radical policy program will generate more pressures on inflation and exchange rates. The worsening economic conditions will benefit Milei as he blames [rival] politicians for the spiraling crisis,” says Sigalov.
In other words, Milei has every reason to feed political and economic instability ahead of Argentina’s first-round presidential election in October.
Populism rules the day in Argentina
Far-right eccentric economist Javier Milei surprised everyone in Argentina’s primary election on Sunday. Faced with 116% annual inflation, a 43% poverty rate, a plunging peso, and rising crime, voters responded at the polls by awarding Milei the most votes.
With more than 90% of the ballots counted, Milei has 30% while the conservative opposition bloc has just 28%, and the ruling Peronist coalition has 27%.
Elected to Congress in 2021, the fiery Milei was a television personality and economist before making the leap to politics. Often compared to former US President Donald Trump and former Brazilian President Jair Bolsonaro, Milei is known as much for his controversial beliefs (he wants to legalize the sale of human organs, considers climate change a “socialist lie,” and says sex education is a ploy to destroy the family) as his brash style (he belts out rock songs at rallies and claims to have not brushed his hair in decades).
To tackle Argentina’s economic woes, Milei wants to follow Ecuador’s lead and dollarize the economy, implement a “complete reform of the state” by eliminating government ministries, shuttering or privatizing state-run companies, and slashing taxes and cutting spending by 15%.
Sunday’s vote determined which candidates will participate in the first round of voting on October 22 – with those who drew less than 1.5% of the vote ineligible. Analysts say Milei's better-than-expected performance makes him the likely winner of the upcoming election. But it could also lead to higher inflationary and foreign exchange pressures – not only because the government will spend aggressively to reverse results, but also because Milei's victory is the most destabilizing imaginable.
If Milei wins the presidency, however, Eurasia Group analyst Luciano Sigalov says he will face enormous governability challenges as he will lack the majority needed in Congress to pass aggressive pro-market reforms. Strong Peronism and social movements mean he will also find major resistance in the streets.
Can a far-right populist win in Argentina?
For the first time ever, someone unaffiliated with either of Argentina’s two main political blocs is making a serious run at the presidency. In fact, Javier Milei is not a traditional politician but an eccentric economist and TV provocateur who promises radical measures to rescue an economy in shambles and tame an annual inflation rate hovering over 100%. He claims to not have brushed his hair since he was 13 and is famous for antics like auctioning off his paycheck. With six months to go to the Oct. 22 election, Milei's message is resonating especially with young voters fed up with a political establishment that has long been unable to solve the country’s problems. Let's learn more about this guy from Eurasia Group analyst Luciano Sigalov.
Who is Javier Milei?
A former university professor and corporate economist, the 52-year-old Milei first captured the public’s attention as a conservative pundit on television talk shows. His unruly hair, wild eyes, and inflammatory statements – for example, calling politicians “thieves” and “criminals” – made him a charismatic figure. In 2021, Milei won a seat in congress. Now, he is running for president as the head of his Liberty Advances party.
What are Milei’s political views?
His views have a lot in common with those of far-right populists such as Donald Trump and Brazil’s Jair Bolsonaro. Milei believes politics is a no-holds-barred contest between the “good guys” and the “bad guys,” the latter represented by traditional political parties from the left to the center right of the political spectrum, which he calls the “caste.” He opposes feminism and abortion as part of a crusade against “cultural Marxism” that he believes has awarded minority groups with too many rights, to the detriment of what he considers ordinary people. And he promises a return to an early-20th-century golden era when Argentina was one of the richest countries in the world thanks to its booming agricultural and beef exports.
Milei calls himself an “anarcho-capitalist” – what does that mean?
Anarcho-capitalists seek the dismantling of the state and the creation of a society regulated solely by the free interactions of individuals and their property. But given the impossibility of implementing this vision in the real world, Milei wants to reduce the state’s presence to a bare minimum. He has proposed eliminating several ministries, privatizing state-owned companies, dollarizing the economy, and shuttering the central bank.
Why is Milei so popular?
He is a gifted demagogue who has effectively tapped into a rising tide of antiestablishment sentiment. Opinion surveys show that his popularity is driven more by his vehement criticism of the political elite than by his radical policy proposals and references to economic theories most people have never heard of. Yet the simplicity of the solutions he offers to intractable problems also has appeal for many voters – especially his proposal to replace the country’s currency with the dollar as a remedy for runaway inflation.
What are his main strengths and weaknesses as a candidate?
Novelty is his biggest strength. He has not previously been in government, so he can freely criticize the two main political coalitions, blaming them for all the country’s problems. Yet his rhetoric is too radical to win over many voters, and he lacks an organization capable of conducting an effective national campaign. Nor does he have a team ready to assume office if he wins.
What do the polls say about his chances?
Polls in Argentina do not have a good track record, so they need to be taken with a pinch of salt. The latest polling is tied to the Aug. 13 primaries (everyone running for president in Argentina is required to participate in the primaries, even if they are their parties’ only candidates, as in Milei’s case). Recent surveys show that about 20% of respondents say they would vote for Milei in the primaries, second only to the share supporting Vice President Cristina Fernández de Kirchner (25%), who is not running. That said, the two potential candidates for the Together for Change opposition have a combined vote share of about 30%. The ruling Everybody’s Front has about 25%. President Alberto Fernández — no relation to his Veep — is not running for reelection.
The polling suggests that Milei has a good chance of a second-place finish in the Oct. 22 election, which could force a runoff between the top two finishers on Nov. 19. A runoff is required if the election’s winner fails to obtain at least 45% of the vote or 40% of the vote and at least a 10 percentage point lead over the second-place finisher.
What does Milei’s fame tell us about the state of Argentinian politics and the country today?
It reflects the failure of the political class to agree on basic policies to get the country moving again and end an economic crisis that has gone on for far too long. It also shows that, even though memories of the country’s 1976-83 military dictatorship remain fresh, Argentines are not immune to the appeal of far-right populism and politicians of dubious democratic credentials.
Is Milei an authoritarian?
He has made numerous comments that suggest he might not respect the rules of democracy were he to win the election. He has enthusiastically praised leaders such as Trump and Bolsonaro, who sought to undermine the rule of law in their countries, and has said he would resort to popular consultation mechanisms if congress were to reject his reform plans. When talking about Argentina’s golden era, he links its end to the election of Hipólito Yrigoyen as president in the country’s first free and fair vote in 1916. And though Milei condemns the recent military dictatorship, he disputes the official number of 30,000 people killed or kidnapped by the regime.
Edited by Jonathan House, Senior Editor, Eurasia Group.
Hard Numbers: Glitchy US border app, Japanese no-show canned, Paris stinks, Argentina’s inflation hits triple digits
2.5: A new US government app meant to speed the processing of asylum-seekers and other migrants arriving from Mexico has a rating of just 2.5 stars on Google play. Small wonder, given that the app is reportedly glitchy, difficult to use, and creates opportunities for scammers to prey on migrants and their families.
7: WFH FTW? Not in Japan’s parliament. After failing to show up to work a single time in seven months, Japanese MP Yoshikazu Higashitani was expelled from parliament on Tuesday. Higashitani, a YouTube star who specializes in celebrity gossip under the name GaaSyy, was elected last July as a member of a party whose only issue is to reform Japan’s public broadcast system.
5,600:Paris le Pew! Some 5,600 tons of stinking, uncollected trash have piled up in the City of Light, the result of an ongoing strike by public sanitation workers opposed to the government’s controversial plan to raise the pension age.
100: Argentina’s annual inflation rate has hit 100%, cracking triple digits for the first time since way back in 1991, when, to put things in proper perspective, Maradona was still with Napoli. The country’s soaring prices are a major concern for voters ahead of what is sure to be a super-contentious election this fall.