Political outcomes of the Argentine presidential election for the country and the world

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Against the backdrop of the near-total power of the left in Latin America, Argentina has seen a right-wing turnaround, one of the first victories for the United States in its generally failed policies in the region over the past few years. In the second round of the presidential election, which took place on November 19, the right-wing pro-American populist Javier Milei won with 55% of the vote, beating the leftist Peronists by a head. Argentina now has its own Trump and Bolsonaro in power, and this came at a time of deep economic crisis in the country, which was largely responsible for this victory, but will create many problems for the winner in the future. Milei proposed shock therapy for Argentina, which included privatizing the economy, cutting all government spending by 15-20%, eliminating the central bank and abandoning the peso and then switching to the dollar. Milei positioned these measures as a cure for the Argentine economy, which is going through a difficult period after the 2020 default, with inflation above 140%. Having been repeatedly deceived by the leftists and Peronists, who, elected on a wave of social populism, drove the country into even greater difficulties, the Argentine voters entrusted the country to a very eccentric and radical politician who offered an alternative image of the future, although not without populism of a libertarian rather than leftist nature. The ambiguity of the epochal choice began to manifest itself almost immediately, and after Milei’s victory, the Argentine peso rapidly collapsed on the gray market. If the official exchange rate to the dollar is 350 pesos, in reality it can be bought for 950-1000 pesos, which gives almost three times the difference. In foreign policy, Milei supported the rejection of cooperation with China, Russia and Brazil in favor of the United States, although Brazil is Argentina’s main trading partner and China is a key investor. U.S. hedge funds could now be the main beneficiaries of his victory, buying up Argentine property cheaply, and Argentina’s membership in BRICS is now also in doubt. And it was this strategy that secured American support for Milei, who will now become an obstacle to Chinese expansion into a region traditionally under Washington’s control.

But the U.S. victory is not yet final, and to accomplish all the reforms and foreign policy U-turns, Milei must make forced concessions to other forces in a parliament in which the leftists and Peronists still hold a majority. His party has only 8 seats out of 72 in Argentina’s Senate, and fewer than 40 out of 257 in the lower house. The obvious allies for Milei now are the center-right, but they have been slow to support all his radical endeavors, so it may well turn out that Milei’s ambitious plan to build anarcho-capitalism in a single country will end up with nothing. But even more dangerous for Milei and his American partners is the fact that voters who have embraced liberal populism against the backdrop of anti-social changes may not only turn away from the new president, but may also try to revolt against him. The fickle moods were well demonstrated by the results of the first round of presidential elections in Argentina, which ended with an unexpectedly strong Peronist result. The center-left Sergio Massa came first in the first round with almost 37% of the vote, but Javier Milei received only 30%, although polls predicted him to win in the first round. The 55% result in the second round also showed that he was afraid to be supported by many more moderate right-wing voters, who fear his radicalism and would prefer even the Peronists as a more coherent alternative. Nor did it add to his credibility that Bolsonaro, now under investigation in Brazil, and Spanish right-wingers from Vox, who are lobbyists for Israel, whose support has been highly controversial in Argentina, were active in support of Milei.

Milei went to the polls with a radical agenda, which included not only the innocuous item of leaving BRICS, but also the desire to dissolve many ministries, privatize everything, and even switch to the dollar. The practical implementation of this program will hit the country’s economy hard, and even his American advisers are likely to dissuade Milei from accelerating its implementation, as they clearly do not want to provoke an anti-American uprising in Argentina, which will quickly nullify all their successes in political technology in the recently won elections. Cutting funding for the state apparatus, which includes the police and army, is suicidal, because only reliance on reliable officials and security agencies can keep Milei in power in the face of expected unpopular reforms. Milei, moreover, suggested not to cooperate with the “communists”, to which he referred China, Russia and Brazil, and against the background of discontent with the Chinese lithium mining business on the part of ordinary Argentines, these slogans were even somewhat social, but economic consequences can always turn public opinion 180 degrees. Such radicalism is quite understandable due to the deplorable state of the Argentine economy with inflation of 90%. Milei, posing with a chainsaw, promised to arrange a complete “shock therapy”, which many considered almost a positive phenomenon, but the practice of the collapse of the USSR and its zone of influence has well shown that this word from mesmerizing quickly turns into extremely negative. In addition, China, which is bringing Argentina into the yuan currency zone and its sphere of influence, will not give up so easily. The United States and China are engaged in fierce battles for the entire continent, but China, with the current pace of economic expansion, is increasingly bypassing Washington, which is mired in a permanent crisis, and the elections are far from the end of their battle for Buenos Aires.

Even relatively loyal right-wingers from neighboring countries recognize that his presidency will have profound implications not only for Latin America’s third-largest economy, but also for the region and the world. On a continent dominated by leftist leaders, Milei could create tensions with governments he has previously vigorously verbally attacked, including key trading partner and neighbor Brazil. In an era of China’s growing influence in Latin America, Milei could become the most vocal antagonist of the country he once called a “killer”. Milei made a name for himself as a television expert who insulted other guests and showed a penchant for picking fights with the media. In a presidential debate, he questioned the generally accepted number of killings during the country’s “Dirty War” from 1976 to 1983, which is unacceptable to many Argentines. He called Argentine Pope Francis an “evil” leftist, even though he has fought leftist guerrillas all his life and even congratulated Milei on his victory, and defined climate change as a “socialist lie”, which irritates many environmentalists. He also said he would hold a referendum to repeal a three-year-old law that legalized abortion, a challenge to the entire society. During the campaign, Milay vowed to cut public spending in the country, dollarize the economy as soon as possible, close the central bank and reduce the number of government ministries from 18 to 8. His cohesive campaign slogan was to destroy the country’s political “caste”, which was Argentina’s version of Trump’s “drain the swamp” slogan. And everything he said looked like either deliberate populism or a path that would lead Argentina almost to civil war.

It should be understood that Milei is no ordinary conservative. He is radically anti-abortion but also supports same-sex marriage, and despite the fact that he declares himself a Catholic, he has one of his favorite targets, which, as we wrote above, is his compatriot Pope Francis. He accuses him of being a “Jesuit who promotes communism” and even of being a “representative of the evil one on earth”. In addition, Javier Milei supports Ukraine and on March 1, 2022, a few days after the Russian invasion, he attended the 140th opening of the sessions of the National Congress with a Ukrainian flag in his hands, a fact that does not at all relate him to his idol Trump, and reveals his willingness to adjust to whatever trends are set in Washington, whether Republican or Democratic. The novelty and eupatism helped Milei because the local electorate usually had a choice between Peronists and leftists, but the old politicians could not cope with the permanent economic crisis in which Argentina has been living for the last 20 years. And that’s when the charismatic Milei, a tank wielder in the style of Hollywood hero Wolverine, appeared with a program mixed with a cocktail of libertarianism and conservative values, and won over the tired Argentines. The economist with a chainsaw Milei advocated carrying firearms and was going to privatize health care and education, which was unusual even for many “capitalist” countries in Europe, but he was not the only one. The ideas of “declaring war” on almost all neighboring countries, China and Russia, also seemed dubious to many. However, Rengaraj Viswanathan, former Indian ambassador to Buenos Aires, said that the “radical foreign policy ideas” proposed by Milei will not be realized for the simple reason that the new president lacks the necessary political and institutional capacity and will have to rely on and compromise with the opposition parliament. So as has already become clear, under the pressure of rational lobbyists from the U.S. even by his own will, Milei will not force the situation, and will start with the most moderate transformations, focusing on “working out” the fight against Chinese influence in Argentina, which interests Washington most of all and will not cause critical shocks to the population. And there is a high probability that his populist program will never be implemented and will only go down in the populist textbooks.