In his inaugural address to the nation on Sunday, delivered on the steps of the Argentina’s domed neoclassical congress, President Javier Milei (53) repeatedly reminded the crowd that “all the money” has gone and austerity looms. His message was met with roars of applause even as he warned the nation to brace for massive cuts in public spending. Milei supporters from all parts of Argentina had travelled to Buenos Aires by the tens of thousands to witness an historic turning point in the chequered history of the country.

Whilst short on specifics and details, President Milei promised to heal the ailing economy with shock therapy and drag the country into a new era of “peace and prosperity.” He also swore to end corruption in all layers of government and fight organized crime. President Milei took a leaf out of former US President Donald Trump’s 2017 inaugural speech when he vowed to return power to “the people.”

Amongst the foreign dignitaries present in Argentina for the inauguration were King Felipe VI of Spain, Ukrainian President Volodymyr Zelensky, and Hungarian Prime Minister Viktor Orbán who could resist posting on X that “the right is winning everywhere!” Brazilian President Luis Inácio Lula de Silva was noted for his absence.

Dismissed by the political establishment as a radical libertarian, mercurial eccentric, or even far-right extremist, Javier Milei unexpectedly cruised to victory in the decisive second round of the presidential election in mid-November. He secured almost 56 percent of the vote and delivered a knock-out blow to the ruling Peronist coalition Unión for la Patria.

Visibly annoyed and shaking with anger over insults hurled at her, outgoing Vice-President Cristina Fernández de Kirchner was caught on camera flipping her middle finger at the crowd of Milei fans as she entered the stately congress building. Mrs De Kirchner was widely considered the power behind (ex-)President Alberto Fernández’ throne and the de facto ruler of Argentina over the past four years.

Crisis Supreme

With inflation expected to hit an annualized 200 percent before the end of the year, and over 40 percent of Argentines living in poverty, the job awaiting the incoming administration is nothing short of “titanic” as noted by the incoming president. In his first official act, Mr Milei halved the number of government ministries to nine.

However, his plan to shutter the central bank and replace the long-suffering peso with the US dollar has been shelved – for now – due to an acute lack of forex. Although Argentina is awash in US dollars, and home to an estimated ten percent of all greenbacks in circulation worldwide, precious few of them are in state coffers. The country’s net currency reserves have dipped an estimated $7 billion into the red. Early next year, Argentina must somehow come up with $40 billion to pay its financial obligations with the International Monetary Fund (IMF) and other creditors.

In a largely symbolic gesture, the new president did order the central bank to stop minting fresh pesos. He also shaved five percent off the federal budget as a first step towards reestablishing fiscal discipline. Earlier, Mr Milei had promised to take a chainsaw to the budget and slash expenditure across the board by fifteen percent or more.

Known as ‘El Loco’ (The Madman) for his often extravagant behaviour and outlandish ideas, Mr Milei is difficult, if not impossible, to pigeonhole. A self-described anarcho-capitalist, He believes that the state is the problem rather than the solution. “Taxation,” Mr Milei said, “is nothing more than armed robbery by the government.”

A somewhat esoteric ideology, anarcho-capitalism revolves around stateless societies, free of government, and held together by contracts and private agencies. The name of the fringe movement was coined by the American libertarian economist Murray Rothbard in 1971. Mr Rothbard argued that the power of the state restricts individual rights and dampens prosperity by creating social and economic problems.

However, since his surprise election win, Mr Milei has toned down considerably and cautioned his followers that many decades of “Peronist-socialist” rule cannot be instantly undone. He also no longer brands climate change as a “Marxist plot.”

The backpedaling coincides with the first signs of Argentina’s powerful labour unions and social movements mobilising against the plans of the new government to end all subsidies (on energy, transportation, and food staples), dismiss untold thousands of civil servants and sell state assets such as oil company YPF and Aerolineas Argentinas.

President Milei repeatedly warned that he will not be swayed by protests even though anger on the streets prematurely ended the careers of three presidents since Argentina’s return to democracy in 1983.

Heaping Praise on a Former Foe

The post election moderation of Milei’s views was welcomed by investors concerned about his ability to govern without a congressional majority. The president seems to have abandoned the idea of cutting ties with China – “ruled by a regime of assassins” – and other communist countries. Mr Milei did, however, firmly decline the invitation for his country to join the BRICS group. The invite was extended by Chinese President Xi Jinping.

In foreign policy, president Milei is determined to align his country with the United States, Israel, and the West. He also said that he will not “push or promote relationships with dictatorships, communists; those who have no regard for peace or don’t hold democratic values.” Whilst keeping relations with China as-is, Argentina will no longer toe the Beijing line as it had done to secure soft loans and trade and investment perks.

Though invariably described as rightwing extremist, Javier Milei is better placed amongst conservative free marketeers. During the election campaign, he heaped much praise on the empowering policy formulas of the late-Margaret Thatcher, the British prime minister who in 1982 dispatched a sizable expeditionary force to recover the Falkland Islands after the invasion and annexation of the South Atlantic archipelago by Argentina. The mentioning of the former foe on the stump was seen as particularly gutsy in a country still bearing the psychological scars from the humiliating defeat suffered four decades ago.

President Milei does not seem to lack in bravado or courage. He has a plan for Argentina to rise Phoenix-like from the ashes and reclaim its destiny, manifest or otherwise, as a regional power. That plan – hare-brained and far-fetched though it may seem – is more than the previous administration could offer voters: more of the same, embellished with a few good intentions and adorned with a great many empty promises.

With almost nothing left to lose, Argentine voters chose hope over experience.

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© 2023 Photo by Presidency of the Republic of Armenia