Argentine libertarian economist Javier Milei, 53, took the oath of office as president of the country on Sunday in a sharp turn for the South American nation as he seeks to find a radical solution to the worst economic crisis in decades and inflation rapidly heading towards 200%.
Major Challenges
Argentina faces enormous challenges, with the country’s net foreign reserves estimated at around $10 billion in the red, annual inflation soaring at 143%, and a recession looming, along with distortions in capitalism affecting the exchange rate.
The Bold Economic Plan
Argentina has suffered from volatile economic cycles for decades due to money printing to finance budget deficits, which increases inflation and weakens the peso. This situation has worsened in recent years with dwindling reserves due to a severe drought affecting key cash crops like soybeans and corn.
Future Challenges
As a major grain exporter, Argentina needs to restructure its $44 billion loan program with the International Monetary Fund, while Milei needs to deal with significant trading partners such as China and Brazil, whom he criticized during the election campaign.
Political Shift
Milei will take over from the outgoing leftist president Alberto Fernández, but he will need to negotiate with rivals since his libertarian coalition holds only a small bloc in Congress. This has already affected his approach, as he toned down his rhetoric in recent weeks and formed his first government of traditional conservatives rather than ideological libertarian allies, placing bolder ideas like dollarization on the line.
Future Outlook
Milei is expected to present his vision in a speech on Sunday, with a detailed economic plan likely to be revealed on Tuesday or Wednesday, according to sources from his team. The ceremony included guests such as Ukrainian President Volodymyr Zelensky, Hungarian Prime Minister Viktor Orban, and an American delegation.
Former right-wing Brazilian leader Jair Bolsonaro also attended, along with Uruguayan conservative leader Luis Lacalle Pou. Chilean leftist President Gabriel Boric was present as well, but leftists Luiz Inacio Lula da Silva from Brazil and Andrés Manuel López Obrador from Mexico were among the notable absentees.
Milei is expected to address his supporters outside Congress rather than speaking in front of legislators as is customary, as he places significant importance on popular support that propelled his rise. Retiree Vilma Bonino, 73, said, “He gives us something we the people need, not the politicians. Now we have to see what happens.”
In a nod to the challenges ahead, Argentine state energy company YPF raised fuel prices this week by an average of 25%, with analysts and markets expecting a sharp devaluation of the overvalued peso after Milei takes office.
Student Delfina Ortiz, 22, said, “Things are not good right now, and it seems to me that change was necessary,” expressing hope and expectations for what is to come.
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