In a seismic political shift, Argentina elected Javier Milei as its new president on Sunday. Milei won decisively with close to 56 percent of the vote, easily defeating the Peronist Economy Minister Sergio Massa in a runoff.
Milei's victory signals an abrupt turn to the political right for Argentina, as voters rejected the political status quo amid spiraling inflation and economic turmoil. He campaigned on a platform of radical free-market policies, vowing to slash government spending and privatize state industries.
The surprise victory leaves many questions about the future direction of Latin America's third largest economy.
To understand the implications, we asked Brett House, professor of professional practice in the Economics Division at Columbia Business School, for his thoughts on what a Milei victory may mean for Argentina and the region. House was a member of the International Monetary Fund’s Argentina team from 2005 to 2007.
CBS: What were the key campaign promises and policy positions Milei advocated during his election campaign?
Brett House: Javier Milei is a libertarian economist who has advocated for substantial reductions in the role of the state in Argentina’s economy, massive cuts to public spending, and the adoption of so-called zero-tolerance policies against crime. He has pushed for market-led solutions to Argentina’s economic challenges through the development of exports, while, paradoxically, at the same time saying he’d refuse to do business with some of Argentina’s largest current trading partners. It’s unclear how much of his platform Milei will be able to implement: He has little support in either Argentina’s national Congress or amongst the country’s provincial governors, but he is an effective campaigner who will know how to leverage the presidency’s bully pulpit.
CBS: Milei and his ideas have been compared to leaders like Donald Trump and Jair Bolsonaro. Is that fair, and why are some concerned about his viewpoints?
House: Like Trump, Milei is a media personality, although he has some limited experience in political office, having been elected to Argentina’s Chamber of Deputies in 2021. Also, like Trump, Milei is a populist who has vowed to shake Argentina’s governing institutions to their core, with little respect for the uncodified norms and conventions that allow these organizations to work effectively: He hasn’t promoted any bills during his time in Congress and has raffled off his salary to his supporters. Milei styles himself an “anarcho-capitalist” who has advocated for cuts in government spending by showing up to rallies wielding a chainsaw.
CBS: Will Milei’s stated policies help some of the challenges facing Argentina’s economy, including soaring inflation and rising poverty rates?
House: Argentina faces some substantial economic challenges—inflation is running at over 140 percent, growth has slowed and may be in a recession, and around 40 percent of Argentines live in poverty—but it’s not clear that the economic shock therapy that Milei has advocated would be helpful or even feasible. For instance, during the campaign, Milei promised to abolish Argentina’s central bank, the BCRA; do away with the peso; and adopt the US dollar as the country’s legal tender. On these points, Milei has already softened his stance and is now advocating efforts to “fix problems” at the BCRA. This is at least partially an acknowledgment that his proposals were unachievable: Argentina doesn’t have the hard currency reserves necessary to replace pesos in circulation with US dollars, and the country is reliant on China, a country Milei has denounced, for foreign financing through a swap line with its central bank.
CBS: How will the results of the election impact the rest of the region?
House: Milei’s victory has potentially huge implications for the rest of Latin America. The election of a hard-right candidate to the presidency in Argentina stands in direct contrast to the rise in recent years of left-of-center governments across the rest of Latin America — governments whose leaders Milei has said he does not consider “partners.” During the campaign, Milei indicated a blanket refusal to work with any countries he deemed “socialist,” lumping together in this bucket Argentina’s biggest trading partner, Brazil, and China, the second-largest purchaser of Argentine exports. Milei has threatened to pull Argentina out of the Mercosur customs union and free-trade area, one of the world’s largest economic blocs.
CBS: How did Milei's background and experiences contribute to his appeal to voters?
House: Milei’s principal appeal was that he comes from outside the political establishment that has been in power for over 30 years and has overseen multiple bouts of inflation, economic crisis, and debt distress. It’s likely that many of his supporters voted to express their anger and push for change, rather than to provide a clear endorsement of Milei’s various campaign proposals and random musings on the stump.