What lies ahead for Argentina as Javier Milei assumes Presidency?
President Javier Milei had his swearing-in ceremony at the National Congress, in Buenos Aires. Image: Reuters
Argentina's President, Javier Milei, assumed office on Sunday (December 11) and emphasized in his speech that he sees no alternative but to implement a sharp and painful fiscal shock to address the country's severe economic crisis.
The ceremony for Javier Milei's inauguration took place at the National Congress burilding in Buenos Aires.
The future of Argentina's economy
Javier Milei, a 53-year-old Libertarian economist, stressed in his speech that a "shock adjustment" was essential to resolve Argentina's severe economic crisis, with inflation nearing 200%.
During his speech, Milei highlighted the financial vacuum left by the previous Presidents, attributing this situation to the country's impending hyperinflation.
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In his address, Milei emphasized his intention to implement stringent austerity measures, asserting that "shock treatment" was the sole path forward.
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He aims to instigate an economic trajectory unlike any of his predecessors. His strategy includes deep spending cuts to reduce significant public debts and curb inflation.
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Milei warned of the possibility of inflation reaching 15,000% annually if left unchecked and raised concerns about a looming $100 billion debt crisis.
Other key issues
- Climate change: Despite previous statements questioning global warming, Milei's new climate diplomat assured Reuters that Argentina would remain committed to the Paris Agreement on climate change.
- Campaign promises: Milei pledged to abolish Argentina's central bank and proposed dollarizing the economy during his campaign. He advocated aggressive economic cuts symbolized by wielding a chainsaw to counter rampant inflation.
- BRICS membership: Argentina will not be joining the BRICS bloc of developing economies next year, as initially planned.
- Ministerial reductions: Milei proposed eliminating multiple ministries he views as contributors to Argentina's economic troubles, a notion he highlighted by removing ministry titles in a viral video.
This is the man who was just elected to be President of Argentina, Javier Milei.
— Kevin Bass PhD MS (@kevinnbass) November 20, 2023
He has big plans for the government of Argentina.
In this video, he explains.
pic.twitter.com/ecLpZTGLFQ
To address the country's economic challenges, Milei has appointed mainstream conservative Luis Caputo to lead the economy ministry, with Santiago Bausili as the Central Bank Chief. Milei is expected to reveal a more comprehensive economic plan between December 12 and 13, as per sources from his team speaking to Reuters.
Current economic situation in Argentina
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Argentina, the second-largest economy in South America, is grappling with 143% annual inflation.
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The Argentine Peso's devaluation has led to nearly four in ten Argentines living in poverty.
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The country faces fiscal and trade deficits of $43 billion, along with a $44 billion debt to the International Monetary Fund (IMF), with a payment of $10.6 billion due to multilateral and private creditors by April.
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Diminishing reserves and a significant drought this year impacting soy and corn crops have worsened the situation.
Javier Milei identifies as a "anarcho-capitalist" and gained popularity through a right-wing platform advocating restrictions on abortion rights, relaxed gun laws, and skepticism towards climate change.