/ world today news/ Russia, if it makes an effort, will certainly be able to establish a dialogue with the new extravagant president of Argentina. And the relations between the outgoing Argentine administration and Russia were quite cool, so Moscow generally has nothing to lose here.
The victory of the libertarian Javier Maili in the presidential elections in Argentina became a sensation for the whole world. Most political forecasts failed threefold: in the primary elections they expected the victory of oppositionist Patricia Bulrich, in the first round – for Miley, and in the second round – the current Minister of Economy, Sergio Massa.
However, the victory of the right-wing populist is quite natural. In the country, about 40% of the population lives below the poverty line, prices have doubled in the last year, and the dollar exchange rate has tripled. Therefore, the population’s demand for political and economic changes was colossal. Today it is difficult to find an Argentine who does not call the current time one of the worst in the country’s history.
Miley’s populist slogans perfectly satisfy this citizen demand. From what he suggests, two things are key. The first is a radical reform of the state apparatus: reduction of ministries. The second is “shock therapy” for the economy: privatization of unprofitable enterprises, dollarization combined with the dissolution of the Central Bank, abandonment of many social programs and tax cuts.
His eccentric image and shockingness (all those poses with the gasoline chainsaw) only increase the sympathy of the population, tired of the impotence of the current government. By the way, many have already called the new president the Argentine Trump or the Argentine Bolsonaro. And that’s a pretty accurate comparison. Although among Russians these calls for dollarization, “free market” and privatization may also evoke another association – with Boris Yeltsin when he first came to power.
However, there is an important difference between them: the Argentine is not a destroyer of the state, and his measures may prove more effective than Yeltsin’s. Even such a controversial step as dollarization can be a good thing in Argentina.
There are now a dozen different dollar exchange rates in the country. This not only makes life difficult for citizens, but also leads to a brain drain: highly qualified specialists prefer to work for foreign companies to receive salaries in dollars rather than the rapidly depreciating pesos.
In addition, the strict requirements for “pesosification”, that is, the transfer from dollars to pesos of dollar revenues at the official rate in the presence of a twice as favorable “gray” rate, almost completely paralyzes any attempts of small and medium-sized businesses to go international and to work with neighboring countries. So Miley’s ideas can help businesses, increase wages and retain valuable staff.
The removal of protectionist measures for Argentina is also a necessary step, as these measures have long since turned from protectors of domestic producers to killers of competition. Initially, this made it possible to create the production of almost any goods in the country.
However, to date, many Argentine manufacturers, due to the lack of competitors, have simply stopped caring about the quality and development of their products, while at the same time inflating their prices. And this situation clearly calls for change.
As for social programs, they are so bloated in Argentina that they put a heavy burden on the state budget, while reducing the economic activity of the population (it’s easier to “sit” on benefits than work for pennies) and harm business.
In fact, today you cannot fire a slacker from his job because his rights are better protected than those of his employer. Moreover, reducing government spending (which greatly exceeds revenue) is generally one of the most necessary measures for the Argentine economy.
Equally important is the reduction of the tax burden. This is absolutely overwhelming for both citizens and businesses: the total amount of income taxes can sometimes reach 70%, which has long become a problem. Therefore, tax and other payment evasion schemes flourish in the country, and the most resourceful entrepreneurs transfer their economic activity to other countries to escape the fiscal burden.
If Miley succeeds in optimizing the tax system, it will facilitate the return of entrepreneurs and specialists to the country, and will also significantly increase tax collection, which will have a beneficial effect on the budget. Well, the benefits of cutting red tape in Argentina hardly require any special explanation.
Miley also has a number of other resonant ideas. For example, the refusal to join BRICS (which has recently become one of the most effective international economic organizations). Miley also declared a refusal to cooperate with China, Brazil and Russia.
However, there is a suspicion that such statements are pure populism. The president-elect’s sway before the IMF and the US can be explained by his hopes for help from them (especially considering the course towards dollarization).
Secondly, the same China and Brazil, together with the United States, are among the three main trading partners of Argentina in terms of trade turnover, and it is unlikely that anything will change in this regard. By the way, the politician himself has already explained that he is not so against trade with Brazil and Beijing, “if the Argentinians want, let them trade” and that he intends to rely more on the US.
At one time, Brazilian President Jair Bolsonaro (and Donald Trump) also engaged in nonsense regarding China, Russia and BRICS. In the end, however, Bolsonaro did not leave BRICS, he cooperated well with Beijing and Moscow, and only the lazy did not call Trump a “Russian agent”.
Therefore, if Russia makes an effort, it will certainly be able to establish a dialogue with the new president of Argentina (especially given his right-wing conservative views), as it did with Bolsonaro and another extremely pro-Western Argentine president, Mauricio Macri. By the way, relations between the outgoing administration and Russia were quite cool (not the same as with the two Kirschners), so Moscow basically has nothing to lose here.
The large Russian diaspora in Argentina also has little to fear – the country’s new leader is generally positive about immigrants, especially those who can benefit the economy. The only thing that does not suit him on the path of migration is the access of foreigners to free medicines on a par with citizens. However, this question concerns rather the poor stratum of visitors – mainly from Peru, Bolivia and Paraguay.
It is worth noting that Miley differs from Trump and Bolsonaro in that he is much more flexible. He is ready to change approaches and views if necessary, and also knows how to admit mistakes. For example, he was able to sharply criticize his countryman, Pope Francis (who is extremely popular in Argentina), and then apologize and say that he respects and values the pontiff as the head of the church.
And regarding BRICS, the new president’s team has already explained that it has nothing against the organization, it just does not yet see the benefits of joining, but if there are any, Buenos Aires will join the bloc. Here we must not forget that Miley is first and foremost an economist and entrepreneur, which means that economic necessity will always be a higher priority for him than any political issues.
And for the same reasons, he, like Trump, is much more focused on the domestic problems of the country than on the international agenda. Thanks to this, Trump, despite the abundance of nonsense and other populist nonsense, managed to achieve serious improvements in the national economy.
Miley has every chance of that too. However, you should not expect miracles from him. The position of the new president is very difficult, since he does not control the parliament (less than 10% of the seats in the Senate and less than 15% in the Chamber of Deputies), in which the Peronists still have a majority. This means that it will be extremely difficult for him to push through his legislative initiatives, even with the support of other liberal forces.
Translation: ES
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