With the dust settling in the background, Javier Milei is enjoying his moment in the limelight.
There are little doubts that Argentina’s president-elect is at peak honeymoon phase, as polls are showing, with the ultra-libertarian taking the opportunity to profess his admiration and adhesion to Judaism, both in Buenos Aires where he received a blessing from rabbi David Pinto Shlita, and in the United States, where he travelled to visit the tomb of Orthodox rabbi Menachem Mendel Schneerson, known as the Rebbe. He also took advantage of the spotlight, and his trip to the United States, to have a series of high-level meetings with political leaders and officials, from former US president Bill Clinton to Jake Sullivan (Deputy assistant secretary for South America, who cancelled his trip to Buenos Aires) and members of the International Monetary Fund. It was also an opportunity for his newly minted Economy Minister, the recycled Luis ‘Toto’ Caputo, to make the rounds on Wall Street trying to shore up support for the aggressively orthodox economic plan put forth by the La Libertad Avanza leader. They seem to be liking what they see and hear, as Argentine assets have been on a tremendous rip, with both stocks and sovereign bonds rallying aggressively since Milei’s electoral victory. That, of course, is no guarantee of success. Just ask Mauricio Macri.
The Milei that has emerged from the scathing presidential campaign is somewhat different from what he had projected. Rather than appearing irate or violent, his semblance is of a happy man. Instead of erratic, he seems pragmatic. And while serious doubts remain as to how his nascent coalition of inexperienced outsiders will ensure governability, the ultra-libertarian is acting carefully and strategically in the conformation of his cabinet and government, seemingly betting on experience over ideology. Of course, all of this is easier without the weight of responsibility that comes with taking office. For the time being, it’s still Alberto Fernández, Cristina Fernández de Kirchner, and Sergio Massa’s problem. Once the glow begins to dim and his “chainsaw” austerity plan is in full force, what Milei will face the music?
With a 55 percent approval rating, Milei is currently the only national politician with a positive rating in opinion polls, along with vice-president-elect Victoria Villaruel, according to a study put together by consultancy Opina Argentina. Milei’s positive differential stands at 16 percent, while Villaruel’s is at nine percent (47 percent positive ratings compared to 38 percent negative). The president-elect has managed to create a positive shock for economic expectations, with 51 percent of respondents noting they believe their situation will improve when he’s head of state. Interestingly, this huge display of support isn’t accompanied with similar levels of enthusiasm for several of Milei’s main electoral promises: only 22 percent agree with the idea of interrupting diplomatic relations with Brazil and China (56 percent oppose it), while his proposal to dollarise the economy is supported by just 31 percent of respondents (48 percent oppose it). Furthermore, the closure of the Central Bank is a good idea for only 36 percent of respondents (47 percent oppose it). The only one of his policies supported by a majority of respondents is the idea to reduce the state by cutting ministries and government payrolls, with 61 percent in favour (compared to 26 percent against). The privatisation of state-run media companies TV Pública, Radio Nacional, and Telam counts on the support of 50 percent of respondents, with 43 percent opposed, while the privatisation of YPF is supported by 42 percent of the sample and opposed by 45 percent. The elimination of transport and utility subsidies along with the implementation of a voucher system in public universities was also rejected by a greater number of respondents.
There is little doubt that the Milei administration will face a tough situation upon taking office. Runaway inflation and a scuttled Central Bank with hugely negative reserves on the one hand and a fragmented political field on the other appear to be a dangerous mix of initial conditions. Milei and his team will have to find a way to negotiate with Congress and receive tacit approval from the Supreme Court if it is to push through serious reforms. Who will be his negotiating partner within the fractured Juntos por el Cambio coalition, where Macri and Patricia Bullrich haven’t been able to muster the support of their league of governors (the ones who really hold territorial power)? Will the Peronists sit down at the negotiating table with the ultra-libertarians? While Fernández de Kirchner surprised many by receiving Villaruel to organise the transition in the Senate, will she send son Máximo Kirchner and protégé Eduardo ‘Wado’ de Pedro to extract concessions from the libertarians?
The president-elect has repeatedly noted that his plans to dollarise the economy and close the Central Bank are “non-negotiable,” but he’s already watered them down somewhat putting them on a lower level of priority than “chainsaw” austerity. He’s made clear that he will pursue aggressive deficit reduction, which isn’t expected to reach the unrealistic 15 percent of GDP he initially promised on the campaign trail but could be in the vicinity of five percent, while telling governors to start cutting costs and saving in order to pay government workers’ salaries. The ultra-libertarian and his mega-minister for Infrastructure, Guillermo Ferraro, have indicated they will be slashing spending on public works projects. He’s spoken of stagflation (stagnant economic output coupled with high inflation) in the first part of his administration, blaming the Fernández-Fernández-Massa administration’s excessive money-printing while noting it would take 18 to 24 months to bring inflation under control. Social movements, particularly on the far left, are sharpening their teeth for what will be a constant-state of mobilisation and social conflict in the streets of the capital from day one.
As he enjoys his final days as president-elect, Milei and sister Karina continue to lay the foundations of their administration in a contradictory atmosphere of joviality on the one hand and social and economic distress on the other. Macri remains close by, but the ultra-libertarian seems to have been more forthcoming with outgoing Córdoba governor and unsuccessful presidential candidate, Juan Schiaretti. Things are moving fast so there’s little room for speculation, even though several Milei-observers have raised the question about some of the most important members of his inner circle: where exactly are Conan and his family of clones?
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