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The Economist: Javier Milei, known for his unconventional and theatrical antics, has been elected as Argentina’s first libertarian president, securing 56% of the votes against Peronist candidate Sergio Massa. Milei’s Liberty Advances coalition, established just two years ago, won in 21 out of 24 provinces. His campaign resonated with voters, especially young men, informal workers, and the self-employed, against a backdrop of frustration with economic mismanagement and corruption in the Peronist movement.
Milei’s victory reflects widespread dissatisfaction with Argentina’s current economic situation, characterized by soaring inflation, multiple exchange rates, and complex financial controls. Argentina also faces substantial debt, including $44 billion owed to the IMF.
In his victory speech, Milei emphasized the need for immediate and non-gradual reforms. His plans include reducing government spending, which has escalated from 22% of GDP in 2003 to 38% today, and tackling the fiscal deficit. Proposed measures include cutting subsidies, reforming the pension system, privatizing state-owned companies, and addressing the convoluted exchange rate system.
Milei aims to devalue the official exchange rate to a level between the official and black-market rates, and lift capital controls. He also plans to simplify regulations and taxes to stimulate business growth and investment. However, Milei faces significant challenges, including the need for congressional support, as his coalition holds a minority in both houses. His proposed reforms, while potentially beneficial in the long term, risk increasing inflation and sparking protests in the short term. The question remains whether Argentines will accept the consequences of the drastic changes they voted for.
The entire article can be read at the link Javier Milei will be Argentina’s first libertarian president (economist.com)
