Sunday, March 3, 2024

OPINION AND ANALYSIS | 03-02-2024 08:11

An outsider at the centre of things

Milei’s game plan is straightforward enough. Unfortunately, as governments the world over are well aware, squeezing the money supply is always a painful process.

Javier Milei won the enthusiastic approval of many extraordinarily rich members of the international financial elite by accusing them of being closet lefties who are all too ready to grovel before their enemies and disgrace themselves by trying to placate them by claiming to agree with almost everything they say. They like him because he seems to represent something new and, of course, because they greatly enjoy being told that they occupy the moral high ground and that their critics are responsible for everything bad.

None of this means that the plutocrats are ready to put their money where their mouths are. Though some insinuate they will probably do so after Milei has transformed Argentina into a going concern, as yet nobody has promised to give him a helping hand by investing a few billion dollars, euros, pounds or even yens in his ambitious project. Were some of his admirers to do this in the coming weeks, the country’s prospects would quickly become far brighter than they currently are. Milei’s own international image may be dazzling, but Argentina’s remains as uninspiring as it was before he made it into the Pink House.

Milei’s game plan is straightforward enough. He wants to kill inflation by depriving it of oxygen and get business moving by eliminating a huge number of bureaucratic regulations that are doing much to hold it back. Unfortunately, as governments the world over are well aware, squeezing the money supply is always a painful process. Millions of people who are already desperately hard up will suffer, as will many others who until fairly recently managed to make ends meet and took it for granted that they would continue to be able to do so.

Will they put up with harsh austerity for as long as it takes? Nobody knows the answer to that key question, but it would be surprising if their patience lasts for more than a few months. And while deregulation is widely regarded as necessary and long overdue, there are plenty of well-placed people who benefit from the way things are and are prepared to fight their corner. Their ability to persuade the government to drop some of its proposals should not be underestimated; for them, gutting the “Omnibus bill” was all in a day’s work.

As Milei no doubt appreciates, his main ally is the sad fact that Argentina is flat broke and the government has run out of money to spend on whatever it thinks desirable. Though it may be politically advantageous to pretend that this is not the case and stage public protests in defence of the status quo, Argentina faces a long spell of severe austerity, no matter what happens in Congress or on the streets.

From the point of view of the multi-millionaire trade union bosses, faithful Kirchnerites, leftists and leaders of organisations set up to represent the many who depend on handouts, it would surely be better to let an out-and-out liberal extremist like Milei be in charge while Argentina is put through the wringer. Some understand this and, like Cristina Fernández de Kirchner, are keeping quiet, but others are openly determined to unseat him as soon as possible. As far as they are concerned, chaos would be preferable to whatever alternative the libertarian has in mind because they think large-scale mayhem would be in their interest. They are individuals who would much rather continue to be big fish in a fetid pond than minnows in a large crystal-clear lake.

Milei seems so convinced that he is right about everything that he continues to make life very difficult for the many men and women who are willing to help him because they want to save the country from what could be a nightmarish period of political turmoil, which would almost certainly end badly. However, he does not take kindly to being criticised and, as is habitual in political circles, he suspects he is surrounded by conspirators who would be only too happy to stab him in the back. He may well be right.

As well as distrusting those closest to him with the possible exception of his sister Karina, Milei is said to fear that, unless he stands firm, La Libertad Avanza – the makeshift party that was put together in a hurry – will be taken over by PRO and he will end up playing second fiddle to Mauricio Macri who, like his friends in the rest of the world, agrees that what the country needs right now is a spell of full-blooded capitalism. Such suspicions may be uncalled for, but politicians are by nature competitive creatures that dislike seeing their authority challenged.

Milei has always been a loner who gets on better with dogs than with human beings, a breed he appears to dislike. Had he remained just an economist with emphatic ideas, his personal traits would be of minor importance, but now that he is Argentina’s president, they matter a great deal. Though the one-man show he is giving may impress movers and shakers in other parts of the word, ruling a country which is beset with a multitude of dire problems has to be a team effort. As Macri, among others, warned him before he won a famous election victory, to succeed in his endeavours Milei will need to fill thousands of administrative posts with capable people who share most, but not necessarily all, of his views. This is something he will be unable to do without the willing collaboration of the leaders of other political parties which, broadly speaking, are on the liberal side of the ideological spectrum and want Argentina to have a vigorous capitalist economy.

Until very recently, such an approach was considered so heretical that, like their counterparts in Europe, few Argentine politicians dared to confess that they were convinced that free-market capitalism had proved to be radically superior to all the alternatives favoured by advanced thinkers throughout the world. It has been almost entirely thanks to Milei that, in Argentina at any rate, intelligent people have become willing to put in a good word for an economic system many had long denounced as heartless, savage or inhuman. This means that should Milei’s term in office prove disastrous, the country could swing back to the other extreme. If what has already happened here under previous administrations, and elsewhere in Latin America under like-minded ones, is anything to go by, Argentina would then condemn herself to a future that would be far worse than most people can easily imagine.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).


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