New Presidency Will Plunge Argentina into Ever Greater Crisis
September 14, 2023,
march against Milei
With a population of 45,773,884 people and a Gross Domestic Product (GDP) of U.S.$449.70 billion, Argentina is the third largest economy in Latin America after Brazil and Mexico, followed by Colombia.
According to data from the Institute of International Finance, its government debt surpassed $400 billion in the second quarter of 2023 to hit historic highs. The International Monetary Fund (IMF) says its total debt-to-GDP ratio is expected to rise to 89.5 per cent in 2023 from 84.7 per cent in 2022. Inflation is currently at 140 per cent.
Argentina has suffered devastating economic crises since December 2001/January 2002 due to the "shock therapy" imposed on the country by the IMF in the early 1990s. This is sure to become much worse in the coming period with the election of Javier Milei to the presidency on November 19. Argentina's electoral authority announced that Milei received 55.7 per cent of the vote cast and Economy Minister Sergio Massa received 44.3 per cent. Milei ran on a platform of dealing with the high debt and deficit, soaring inflation and rising poverty by slashing spending on public programs and services and “putting everything into private hands that can be.” Upon being declared president-elect he said his immediate intention is to eliminate the deficit as quickly as possible, so the country is in a postion to pay off its huge debt to the IMF, currently standing at U.S.$45 billion plus interest -- the biggest bailout of any country in the history of the IMF.
Incurring a U.S.$57 billion debt to the IMF, with all the onerous conditions that entails, was one of the last acts of former president Mauricio Macri before being defeated in 2019 after a single term by President Alberto Fernández. Fernández himself declined to stand for re-election to a second term. Macri, a multimillionaire businessman who still has political ambitions, was decisive in getting Milei elected by striking a deal with him to deliver the votes of a coalition of “more moderate right wing” parties he leads to the “ultra-right” Milei for the second round of the presidential election, allowing him to double the votes he received in the first round and surge past Massa. However Milei's La Libertad Avanza (Freedom Advances) coalition holds just 38 of 257 seats in the Chamber of Deputies and eight of 72 in the Senate, and has no provincial governorships or mayoralties to boot. Macri and the section of foreign and local oligarchs he represents will no doubt use that to their advantage to exert influence over Milei's plans to restructure the state, over where and how the spending cuts are made, and who stands to benefit from his pay-the-rich privatization and debt repayment schemes to ensure they are favoured by them, and if not, to try and block their implementation.
Milei, who has been compared to former U.S. President Donald Trump, describes himself as an "anarcho-capitalist." In his victory speech he said, the "reconstruction of Argentina begins today." He added, "Argentina's situation is critical. The changes our country needs are drastic. There is no room for gradualism, no room for lukewarm measures." According to the Associated Press, "With a Milei victory, the country will take an abrupt shift rightward and a freshman lawmaker who got his start as a television talking head blasting what he called the 'political caste' will assume the presidency."
Stepping up the neo-liberal anti-social offensive will now make the rich even richer and the poor poorer. Milei has announced he will slash the size of the government, dollarize the economy, eliminate the Central Bank, drastically cut spending on social programs and privatize the majority state-owned energy company, the national airline, and all public media companies as a way to tackle galloping inflation and the growing debt load that he blames on successive governments printing money indiscriminately in order to fund public spending. He also campaigned on cutting ties to Russia, China and Brazil.
As part of his anti-people agenda Milei also espouses several conservative social policies, including opposition to sex education in schools and abortion, which Argentina's Congress legalized in 2020. He was often seen carrying a chainsaw to electoral rallies and he now claims his election shows that Argentinians elected him to implement this vicious anti-social offensive, threatening any who try to resist it with swift punitive action. Another thing Milei notoriously did at campaign rallies was wave a big Israeli flag. He has said he expects the U.S. and Israel to be his government’s two closet allies. One week after being elected he travelled to New York and has said his second trip abroad will be to Israel, where his stated intention is to move Argentina’s embassy to Jerusalem from Tel Aviv.
Among the most egregious of the positions the new government is expected to promote, Milei's running mate, Victoria Villaruel, has claimed that the number of victims from Argentina's bloody 1976-1983 military dictatorship is far below what human rights organizations have long claimed.
U.S. Secretary of State Antony Blinken congratulated Milei on his election saying, "We look forward to continuing bilateral cooperation based on shared values and interests."
This article was published in
Volume 53 Number 11 - November 2023
Article Link:
https://cpcml.ca/Tmlm2023/Articles/M530118.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca