Maverick Milei takes the reins in Argentina


Maverick libertarian economist Javier Milei was sworn in as Argentina’s president yesterday (Sunday), on the 40th anniversary of his country’s return to democracy.

Inheriting an economic mess (such as empty coffers and $100B in debt), his 35-minute inaugural address contained few surprises compared to his famously unorthodox campaign. Milei said:

  • The outgoing government and broader political class had “left the country at the brink of its biggest crisis in history
  • This means there’ll be tough decisions ahead, “but unfortunately they didn’t leave us any option”, and
  • The solution lies in the ideas of freedom and a new social contract “in which the state does not direct our lives, but rather safeguards our rights“.

The president didn’t offer specifics, though flagged spending cuts equivalent to 5% of GDP, and ended the address with his trademark slogan of “long live freedom, damnit!“. The gathered crowd came straight back with a “¡Viva!

In parallel, Milei had already named some notably mainstream figures to his cabinet, including the highly regarded Luis Caputo as finance minister.

How highly regarded?

When Caputo restored the country’s access to international credit back in 2016, the then president declared him “the Messi of finance”. And honestly, we can’t think of a higher compliment in a country so mad about Messi (the soccer star).

These kinds of mainstream appointments, plus other pirouettes to the centre, partly reflect Milei’s political reality: he only controls 10-15% of Argentina’s legislature, so he’ll need to do deals with the opposition to get much done.

And we won’t have to wait long to see how this all pans out: he’s already signed a cost-cutting decree to halve the number of government ministries, and Milei’s team says he’ll unveil further sweeping reforms (like deregulation) this week.

All the while, business leaders are cheering him on, while unions and social organisations are planning protests. Viva, indeed.

INTRIGUE’S TAKE

Ukrainian leader Volodymyr Zelensky’s attendance at Milei’s inauguration also stood out to us. Zelensky probably had three goals in mind.

  • First, it’s an effort to build support for Ukraine in a region that’s been pretty equivocal in its response to Russia’s invasion
  • Second, he got a chance to speak directly to Hungarian leader Viktor Orbán (seated nearby), who’s consistently tapped the EU’s brakes on support for Ukraine, and
  • Third, he likely also had an eye to audiences in the US, where there’s been overlap between those who’ve enthusiastically welcomed Milei as president, and those who’ve questioned US support for Ukraine.

So getting a bear hug from Milei, an outspoken backer of Ukraine, potentially helps defuse some of the politics playing out in the US Congress, which is still debating US military aid to Ukraine.

Also worth noting:

  • Other attendees included Chile’s left-leaning leader, right-leaning figures like former Brazilian leader Bolsonaro, plus the US energy secretary, Israel’s foreign minister, and a mid-ranked envoy from China (a country Milei described as an “assassin”).
  • The left-leaning leaders of Latin America’s three other biggest economies (Brazil, Mexico and Colombia) were no-shows, which perhaps isn’t surprising given some of Milei’s fiery campaign rhetoric. But still, it’s hard to see projects like the region’s free trade deal with the EU now progressing any time soon.
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