Javier Milei, the anti-establishment politician who won Argentina's presidential election last week, now faces the challenge of implementing his radical proposals. The self-styled 'anarcho-capitalist' had proposed dollarising the economy and eliminating the Central Bank to combat hyper-inflation, but these plans require congressional approval and may even necessitate constitutional changes.
Milei's Libertad Avanza movement is only the third-largest force in Congress, suggesting difficult negotiations ahead. Economists have questioned the feasibility of dollarisation, noting it would leave interest rate policy in the hands of the US Federal Reserve and make Argentina vulnerable to external shocks. Additionally, Argentina would need between $35bn and $50bn in US dollars to replace pesos, funds the indebted nation currently lacks.
Milei has admitted his 'shock adjustment' plan could take up to two years to reduce inflation. He has also faced criticism for his climate change scepticism, having denied human involvement in global warming and proposed abolishing the environment ministry. This stance risks alienating Argentina from international efforts at COP28.
Before his election, Milei virulently attacked Pope Francis, calling him a 'Jesuit who promotes communism'. However, after a friendly phone call with the Pope post-election, Milei invited him to visit Argentina in 2024, conceding that 'there are some things that require greater doses of pragmatism'.
Milei had also signalled he could freeze ties with Brazil and China, Argentina's top trading partners, aligning instead with the US, Israel, and the 'free world'. A Chinese foreign ministry spokesperson warned that cutting ties would be a 'huge foreign policy mistake'. Milei's predecessor had nurtured ties with Beijing and welcomed an invitation to join Brics.
