Courtesy of Forbes
On November 19, the far-right, libertarian candidate Javier Milei won the Argentine presidency in a runoff election against the economy minister Sergio Massa.
Massa also serves as the leader of the Unión por la Patria coalition, the Peronist party which has held much political power in Argentina throughout the past four decades; on the other hand, Milei is relatively new to politics, having only been elected to the Congress’s Chamber of Deputies in 2021 after experience as a political pundit. Furthermore, this result represents a significant shake-up in the country’s domestic politics and is itself a reaction to persistent economic troubles.
Previously, the first round of elections took place on 22 October, but neither candidate garnered the required 45% of votes needed to win. However, data indicates that in the runoff, Milei won 55.8% while Massa only secured 44.2% of the vote. Milei is also credited with attracting about half of the youth vote, whose support he built in part due to an extensive campaign targeting the demographic on social media. Advised by Fernando Cerimedo (who also worked on former Brazilian president Jair Bolsonaro’s social media campaign strategy), Milei has amassed 1.5 million and 3.6 million followers on TikTok and Instagram, respectively. Particularly, Milei appealed to young people by posting straightforward videos explaining his policies, live streaming, and posting memes. These live streams would often include raffles in which Milei would give away his salary, stating his intent to “give back to the people the money that was taken from them by force.”
One of the most important factors impacting this election cycle has been the declining state of Argentina’s economy, which over the past few years has faced increasing issues of inflation, capital controls on the peso, low levels of foreign reserve currencies, and a shrinking GDP. On top of it all, the country also needs to repay a $44 billion IMF loan. For example, in September 2023, inflation levels had soared to 138%, and experts predict that they could increase to 180%-210% by the end of year. This has led the central bank to raise interest rates to 133%, restricting economic growth. For Argentine citizens, inflation has resulted in growing amounts of poverty, resulting in the electorate feeling a radical change in economic policy is the only solution to Argentina’s economic troubles.
Milei provides the drastic economic changes that many Argentinians are looking for. Throughout his campaign, he has vowed to eliminate Argentina’s central bank as well as cut government spending by 15% of the country’s GDP, privatize certain state-run industries, and reduce the amount of government institutions by half. He has also pledged to switch Argentina’s currency from the peso, which since the pandemic has steadily decreased in value. More recently, over the course of the election cycle, the government was forced to diminish its worth a further 20% immediately following Milei’s victory in the August primary elections, and the currency’s value dipped again following Milei’s claims that the peso is “worth less than excrement.”
While dollarization in Argentina would likely cost billions, it would also curb the government’s ability to print money (over-printing pesos has contributed to inflation) and set the currency to one exchange rate (the government has implemented multiple exchange rates for the peso).
On the other hand, this proposal has been criticized by Massa on the grounds that it would greatly inhibit Argentina’s ability to determine its own economy and monetary policy; much of his campaign was dedicated to warning voters of the possible consequences of a Milei victory on social welfare institutions. Moreover, Massa’s propositions for how to fix the economy were more moderate than his opponents, promising to close the country’s budget deficit and continue with its current fiscal reform policies.
While Massa’s more moderate policies were enough to garner support from voters who were hesitant about Milei’s drastic ones, it is clear that as a whole, the defining characteristic of the elections was voters’ desperation for a candidate who could promise to deliver a dramatic change. Milei has capitalized on this sentiment by employing populist rhetoric, stating that the current state of the country has been brought on by the “political caste” that has exploited regular Argentinians for their own gain and “decadence.”
Moreover, Milei’s election is representative of the continuing rise of the global far-right movement, and both Bolsonaro and former US president Donald Trump have supported Milei and congratulated him. However, while Milei’s supporters view his victory as a pivotal moment in the remaking of Argentina, Milei’s proposed policies (particularly economic policies) will drastically alter the country and have far-reaching impacts. Time will tell whether Argentinian’s desire for any change will manifest into beneficial change.