Milei could be the big disappointment in six months' time

They have come to work. Here in Madrid their presence does not go unnoticed, especially because of the accent that is felt every day behind the bar of a restaurant, the arrival of many young Argentinians with dual nationality has been increasing in the last six months.

The electoral triumph and the coming to power of Javier Milei, with his ultra-neoliberal ideology in an Argentina with multiple economic and social problems, are enough to drive hundreds of desperate people (especially young people) out of the southern country to find a better standard of living; at least a more stable one. 

Milei is receiving a broken economy, with a broken currency, and if he does not act fast those 14,476,462 votes he received may turn into frustration and discontent in the streets. 

For now, the International Monetary Fund (IMF) has said it will keep a close eye on Argentina's economy, after lending it $7.5 billion last August. 

Argentina has several deep problems:  1) triple digit inflation; 2) constant devaluation of the peso, in August alone in one day it lost 18% to stand at 350 pesos to the dollar; 3) it is one of the most indebted countries in the world, above all, to the IMF; 4) it suffers from a severe drought in the agricultural sector; 5) it is a victim of continuous recessions; 6) it has an ineffective Central Bank; 7) there is a broken political system; and, 8) the country has defaulted on its international sovereign debt nine times for more than 132. 132 billion dollars.

In his first economic decisions since Milei took office on 10 December, the most unpopular has been the more than 50% devaluation of the currency and setting the official exchange rate at 800 pesos to the dollar from 391 pesos to the dollar at the beginning of the month.  

This professor of macroeconomics, an admirer of Milton Friedman, is left to apply the old orthodox formulas to try to revive an economy with cancer: cut spending, eliminate subsidies, slim down the state, reduce the government structure and public administration; devalue, sell state companies, speed up privatisations. Milei even wants to dollarise to lower hyperinflation and even resort to the use of Bitcoin.

All are unpopular measures with socio-economic consequences in a country where half of the population faces varying degrees of poverty and has survived in recent years thanks to the subsidies applied by the Kirchnerist and Peronist governments. Milei has already announced that he will withdraw transport and energy subsidies.

But what does Milei's Argentina look like from the point of view of an Argentinian living in Spain? For journalist Martín Caparros, everything that is happening is very complex. 

"It has many edges and I increasingly have the feeling that this is a 'Menemism'. The measures are apparently very similar to those applied at the time by Carlos Menem... Milei spent the whole campaign talking about dollarisation, now it seems that it can't be done more or less soon; he spent the whole campaign saying that he was going to close, if not burn, the Central Bank and now he has been forgotten over there", says Caparros, who is also a writer.

The exchange convertibility system, in which the Argentine peso was equated to the value of the dollar, in order to facilitate the dollarisation of the Argentine economy, was already in place during the government of Carlos Saúl Menem, when Domingo Cavallo was the architect at the head of the economy.
It was a time when the German economist Rudiger Dornbusch advised several Latin American governments in favour of reducing the state, opening up the economy and giving way to privatisations not only to receive national, but mainly foreign, capital. 

At the beginning of 1991, while Argentina was suffering hyperinflation, Cavallo established a floating band for the dollar in the exchange market before declaring convertibility against the greenback a few months later.

A decree declared the convertibility of the austral with the US dollar at a ratio of 10,000 australes to one dollar. Known as the Caja de conversión or Plan Cavallo, the basic idea was to control prices, lower inflation, stop capital flight and restore the confidence of economic agents.

Menem stayed in government with Peronism until the system he had created began to crumble in 1999 and in 2001, when the convertibility plan collapsed and a new economic and political crisis began. Milei's idea of returning to dollarisation could be the beginning of a future corralito for Argentina. 

Will this be the beginning of another collapse for Argentina?

It is very difficult to know what will happen because in the last twenty days, let's say since the end of the campaign and after the victory, Milei has changed his discourse many times and has even abandoned all the old guard of his party, with whom he has been building his movement, and has begun to replace them with characters from what he has continued to call the caste. 

It is likely, Caparros adds, that the changes promised by Milei will take several months to be noticed and he does not rule out that the situation could even get worse for many people. 

"His handicap may be that he has created too many expectations and that, when people see that half a year has passed and the situation continues and even worsens, citizen discontent may be reflected in other types of demonstrations", he stresses.

In the opinion of the King of Spain International Journalism Prize winner, some of the new government's proposals are absurd, such as the reduction in public works, which, if implemented, would put 500,000 workers out of work. 

With all the worrying aspects of Milei's campaign, he still received the majority of the votes...

Milei's impetus came from young people who were very hopeless in the face of a society that was not offering anything promising, quite the opposite in fact. Young people voted in anger against the caste, eager to break everything, to change everything.

However, they can quickly become disappointed: "I don't know what will happen in six months' time, when people see that he is governing with this caste of Macristas and Menemistas. There is nothing really different about him.

We knew that after the pandemic, the dialectic would lead to political poles. Do you think it is a tendency for more governments to move towards the ultra-right or ultra-left?

I don't see so many ultra-left ones. The ones that have grown a lot are the ultra-right, although I would make an exception in the case of Milei; I believe that a large majority of his voters do not vote for him because of his supposedly ultra-right ideas, but as an expression of that weariness... of that rage, of seeing the country go to the dogs for decades.

Caparros reflects on this and stresses that they did not vote ideologically: "In Argentina, of course a part of the population is right-wing, but it is much more moderate; and in Milei's vote there is also a lot of anti-Peronism. It's all very crazy, this is a man who doesn't know where he's got to, even though 14 million people voted for him".

The emergence of Trump with his nationalist and supremacist discourse seems to have set a certain political style, what do you think?

Yes, there is a certain profile of politician to imitate. In the Netherlands, the far-right Geert Wilders has won, their first common feature would be their dishevelled hair, the hair has become a sign of identity; it is also true that Trump somehow enabled the idea of the "outsider", the curious thing is that in Milei's case he is a true "outsider".

Caparros recalls a little of the recent past of the new president of Argentina: "He is an ex-employee of a company who until very recently lived in a very modest flat and Trump, although he is an "outsider", is a multimillionaire who got the backing of the most powerful party in the United States and, at the time, Bolsonaro in Brazil had and still has the backing of the army and a large part of the industrialists".

Don't you find Milei's rapprochement with Judaism disturbing given the polarisation at the global level at the moment with Israel's war against the Palestinians?

Yes, Milei's position on the Jewish issue is very strange; he has a tendency to be close, although his background is Catholic; the God who told his dog that he was going to be president is Catholic... what is true is that he points out and has repeated as often as possible that Israel is his great ally; in fact, he wants to move the Argentine embassy from Tel Aviv to Jerusalem in order to be more pro-Israeli.