• Yomiuri Editorial

Argentina: Economic Turmoil Gives Rise to Radical President

A right-wing economist who has pledged to implement radical restructuring measures is set to become the new president of Argentina, a South American country whose economy is in turmoil. He advocates the “dollarization” of the currency, among other points, but can such plans be realized?

Javier Milei, an independent opposition member of the Chamber of Deputies of the Argentine parliament has been elected to serve as the country’s president — taking over from Economy Minister Sergio Massa of the left-wing ruling bloc — after amassing 56% of the ballots in a runoff vote to select an Argentine president. He will take office on Dec. 10.

Argentina is in the midst of a prolonged economic slump. Inflation is rising due to poor agricultural harvests caused by drought and a weak currency. Consumer prices in October rose 140% compared to the same month last year. With two out of five people in the country living in poverty, there is an urgent need to rebuild the economy.

Milei is a libertarian who values individual freedom and believes the role of the government should be kept to a minimum. During the election campaign, he gained support by advocating a policy of switching from the Argentine peso to the U.S. dollar, abolishing the central bank and drastically cutting public spending, among other issues.

The current left-wing government has failed to control inflation with its economic policy of pork-barrel spending. Public dissatisfaction with the situation has brought Milei to the presidency.

The succession of left-wing governments that have emerged in Latin America in recent years also will likely be questioned by the public regarding the effectiveness of their economic policies, which emphasize income redistribution.

However, many observers have questioned the feasibility of Milei’s campaign promises.

How will he procure the large amount of U.S. dollars needed for his dollarization policy? Cuts in public spending could increase the burden on the low-income population and widen the gap in wealth between the rich and the poor.

What is worrisome is Milei’s political behavior, which seems to be intended to stir up public conflict. During the election campaign, Milei, who considers himself a political outsider, wielded a chainsaw as a symbol of his determination to cut public spending, and he repeatedly criticized the established political forces.

Such an approach is similar to that of former U.S. President Donald Trump and former Brazilian President Jair Bolsonaro, both of whom Milei admires, and both of whom, after losing their respective elections, had their supporters storm the U.S. Congress and the Brazilian parliament, respectively, incidents that shook the very foundations of democracy.

Milei’s ruling party will be in the minority in the parliament. Cooperation between the ruling and opposition parties is essential to proceed with policy items. If Milei views the opposition and its supporters as enemies, as Trump and others did, it is clear that the administration will come to a standstill.

On the diplomatic front, the president-elect has indicated plans to review the country’s dependence on China, and place importance on its relations with the United States. Japan trades with Argentina in rare natural resources such as lithium, and it will need to carefully monitor that country under its new administration.

(From The Yomiuri Shimbun, Dec. 4, 2023)