Since taking office in December, Argentina’s Javier Millay has
self-proclaimed The “anarcho-capitalist” president has put a “chainsaw” to his predecessor’s failed left-wing policies and the growing doubts of his critics.
Recent economic signals from the South American country indicate that Millais’ free market reforms could ultimately lead Argentina from ruin to rebirth.
background
Argentina is
one of the richest countries in the world Early 20th century. But six major military coups and decades of unchecked spending left it in ruins. His 2016 paper published in the Journal of Development Studies shown Argentina has defaulted on its national debt nine times and is the only country in the world that was considered a “developed” country in 1900, but was classified as a “developing” country in 2000.
When Argentina’s former leftist president Alberto Fernández resigned from office at the end of last year,
owe something $44 billion to the International Monetary Fund. It had a trade deficit of $43 billion. International creditors knocked on the door. Almost half of the population lived in extreme poverty. And inflation was expected to exceed 211%.
Millais had no intention of seeing the subversive campaign of his socialist predecessors to its inevitable conclusion. After all, he was instead campaigning to implement his so-called personal policies.
chainsaw plan.
“Political thief is over. Long live freedom, damn it!” Millais said.
Blaze News previously reported that the plan includes selling state-owned enterprises, cutting public spending, cutting and simplifying taxes and abolishing various government agencies. He also suggested that Argentina introduce the US dollar and close the Argentine Central Bank.
in
video When this went viral before the election, he excitedly ripped the names of various ministries off a whiteboard and said, “Political thief is over. Long live freedom, damn it!”
Voters ultimately decided to give Millay more than just a whiteboard.
Millay goes to work
The 53-year-old former right-wing economist who views climate change as a “socialist conspiracy” will cut the number of government ministries from 18 to nine and fire more than 5,000 bureaucrats in December, as promised. The situation started with a presidential order. their duty.
Later, the Millais government allowed the use of the peso currency.
54% devalueAnd then his economy minister, Luis Caputo, said that this country reduce spending At least 3% of GDP.
Milley’s government purchased and issued more than $5 billion in dollars to increase reserves while dollarizing the currency.
“Bopreal” bonds This is to deal with import debt.
Late last month, Argentina’s House of Representatives approved key parts of President Javier’s omnibus bill. This includes privatizing some public companies and giving the president expanded executive powers over administrative, financial, and economic matters.
report Bloomberg.
If the Senate approves the plan this month, Milley would be able to lay off more state employees, cut costly subsidies and eliminate various government agencies.
Despite the difficult situation in Congress, where allies do not enjoy a majority, and challenges from both sides.
local government and UnionMillais has continued to implement the chainsaw strategy, hinting at stronger cooperation with the United States. big disappointment BRICS intergovernmental organization led by China.
We are starting to see results.
Prime Minister Millais announced last week that the country had recorded its first quarterly budget surplus since 2008.
report Telegraph.
Although a surplus of 0.2% of GDP is relatively small, it was a significant feat for Argentina, which has reportedly been in the red for 113 of the past 123 years.
This week, the country’s central bank, which has not yet been shut down, cut interest rates for the third time in three weeks, by 50%.
“Argentine leaders are offering a blueprint for a way out,” financial columnist Matthew Lin wrote.
Despite the inflation rate reaching the
March cumulative total 287%USA Today report As a result of Mr. Millais’ shock mitigation measures, monthly inflation has fallen over the past three months.
Eurasia Group founder Ian Bremer said on Wednesday that unlike the collapse so-called experts had predicted, “monthly inflation has fallen every month for the past three months, rising from 25% in December to 25% in March. has fallen to nearly 10%,” he was quoted as saying. , forecasters expect April’s numbers to be in the single digits. ”
Bremer explained:[Milei] The government did this by turning an inherited 5.5% budget deficit into a surplus for the first time in more than a decade, while increasing the central bank’s foreign exchange reserves, lowering the base interest rate, and reducing the money supply. All this was done without destabilizing currencies and financial markets. ”
The Telegraph suggested the economy could soar even further if Mr Millay were able to implement his plan to extract the country’s shale oil and gas from the ground using proven technology.
Matthew Lin, a financial columnist who writes for Moneyweek and the Telegraph, said:
I got it.“Argentine leaders offer a blueprint for breaking away. Despite a woeful lack of results, the world’s economic elites are private about why we need more government and a stronger state.” Argentina is challenging this in a dramatic way.
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