Argentine congressman and presidential pre-candidate for La Libertad Avanza Alliance Javier Milei delivers a speech during the closing of his campaign for the Aug. 13 primary elections, at the Movistar Arena in Buenos Aires on Aug. 7, 2023. The first round of the presidential vote will take place on Oct. 22. (Luis Robayo/AFP via Getty Images)
As Latin American countries lean toward socialism, the victory of right-leaning libertarian Javier Milei in the Argentinian primaries may indicate that the political landscape is shifting.
Over the past several years, socialists have been gaining ground in Latin American elections. Bolivia, Brazil, Chile, Colombia, Cuba, Honduras, Mexico, Nicaragua, and Venezuela all have socialist governments.
Ecuadoran President Guillermo Lasso was the first conservative candidate elected in two decades. This leaves Ecuador, Uruguay, and Paraguay as the only countries in Latin America with a right-leaning government.
It is possible that after years of stalled development and endemic problems, Latin Americans are looking for change. Many of the countries in South and Central America suffer from corruption, violence, security concerns, unstable currencies, inflation, high debt, and low standards of living.
The lack of development has opened opportunities for China’s debt-trap diplomacy, with most Latin American nations signing on to Beijing’s Belt and Road Initiative and rescinding their recognition of Taiwan. China has become the top trading partner of South America, and it’s also involved with energy and infrastructure projects. In addition to its economic engagement, China has strengthened its military ties with several Latin American nations by providing scholarships and training for members of the police and army.
Despite investment from China, economic problems persist. Leading up to Argentina’s primary elections, 40 percent of the population lived in poverty. Argentina has been plagued by inflation of 115 percent and a currency that is nearly worthless. To make matters worse, Argentina’s foreign currency reserves have gone negative as it faces default on its massive debt.
Argentina could borrow from the International Monetary Fund, but countries must commit to economic policy changes to qualify for a bailout. Attempts to meet the IMF standards have caused further devaluation of the Argentinian peso and an increase in inflation. Consequently, an IMF bailout is not likely.
The International Monetary Fund building sign is viewed in Washington on April 5, 2016. (Karen Bleier/AFP via Getty Images)
These economic problems are causing the people of Argentina to gravitate toward Javier Milei, a libertarian who the mainstream media have dubbed “far right.” His party, Liberty Advances Party, has criticized the “political caste.” Echoing former President Donald Trump’s “Make America Great Again” slogan, his party calls for the reconstruction of Argentina. With a nod to President Trump’s “drain the swamp,” Mr. Milei wants to purge the government of “thieves.”
He also plans to make gun ownership easy, adopt the U.S. dollar as the official currency, and reduce the government payroll by eliminating the health, education, and environment ministries. State-owned enterprises will be closed or privatized. Mr. Milei also vows to cut taxes and begin charging for public services such as the health care system. At the same time, he intends to enact an austerity program stricter than IMF standards to bring the country’s finances in order.
Mr. Milei aims to eliminate the central bank. This goal aligns with his two decades of experience as an economics professor, during which he integrated the Austrian school of economics with conventional economic thought.
Most Austrian economists and libertarians see the central bank as an unelected government entity with too much power over the lives of ordinary citizens. They attribute issues such as inflation and economic fluctuations to central banks like the Federal Reserve. The central bank’s manipulation of interest rates causes inflation and currency devaluation.
In light of constant inflation and currency devaluation, Austrian economists raise the question: If market forces are trusted to create the optimal price and quantity of everything else in society, why must the money supply and interest rate be dictated by the government instead of by free markets? This ideology is the reason Mr. Milei has a target on Argentina’s central bank.
Libertarians and Austrian economists also believe in personal freedoms. Aligning with this value, Mr. Milei wants to pass legislation allowing consenting adults to sell their organs. However, he plans to increase restrictions on abortion. Even though this seems contradictory, libertarians and Austrian economists regard abortion as an infringement on the rights of an unborn baby.
The country’s general elections will be held in October. It is unclear if Mr. Milei will win, but his success so far is evidence that people want change.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Antonio Graceffo, PhD, is a China economic analyst who has spent more than 20 years in Asia. Mr. Graceffo is a graduate of the Shanghai University of Sport, holds a China-MBA from Shanghai Jiaotong University, and currently studies national defense at American Military University. He is the author of “Beyond the Belt and Road: China’s Global Economic Expansion” (2019).
