Javier Milei, a flamboyant far-right economist, won a heated presidential election in Argentina on Sunday as more than half the voters picked him to pull the country out of a financial mess.
Milei, of the La Libertad Avanza libertarian party, took 55.7% of the total votes with 99% of the ballots counted as of 10 p.m. local (8 p.m. ET), compared with 44.3% for Economy Minister Sergio Massa, of the left-of-center Peronist Party, according to the National Electoral Board.
A 53-year-old outsider who has been in politics for less than two years, Milei had been tipped to win by many political analysts and pollsters after snaring the most votes in the August 13 all-party primaries. Those chances, however, dimmed when Massa, a career politician who has tried to run for president before, came first in the October 22 first round of the general election against four other candidates, with Milei coming second. This pushed the vote to Sunday’s runoff against Massa and Milei, with most political analysts saying that it would be a close call.
Milei, who will take office December 10, vowed during his 12-minute victory speech on Sunday that he will seek to restore the Argentine economy to the greatness of the late 1800s and early 1900s, then one of the strongest in the world.
“This is a historic day,” he said. “Argentina has a future.”
Milei called on other political parties to join him, adding that he will not allow corruption or violence in his administration.
He went on to tell a large crowd outside his bunker in Buenos Aires that the economic recession and high rates of inflation, unemployment, crime and poverty are some of the big challenges he faces, adding that to restore the economy to its former greatness will take 35 years.
Milei, a former goalkeeper at a professional soccer club in Buenos Aires, said during his campaigning that he will slash public spending as a first step to achieving what has long eluded the economy: sustainable growth. He wants to eliminate the primary fiscal deficit – now at 1.3% of GDP, excluding interest payments on debts – in his first year. He also wants to dollarize the economy, shut the central bank, privatize state companies, scrap capital controls, reduce taxes, streamline regulations, shift public works to the private sector, economize the government and widen international trade.
Milei said during the race that running a tight ship will encourage fresh investment, leading to more jobs, higher salaries and a decline in crime.
Massa, 51, had also vowed to slash public spending, but the economy’s performance since he was named minister in August 2022 weighed heavily on his candidacy.
The economy under his watch has fallen into recession, with the peso steadily devaluing, inflation touching 143% in October and the benchmark interest rate now at 133%, the highest in the world. At the same time, a series of corruption scandals have recently broken out in different factions of the ruling party, including bribery and illegal espionage.
Milei also benefited from an endorsement from Patricia Bullrich, who came third in the first round. Her right-of-center Juntos por el Cambio coalition ruled the country from 2015 to 2019 under then President Mauricio Macri, who publicly spoke well of the ultraliberal economist. Macri said Milei is the best chance to end the domination that Peronism has had in politics for much of the past 80 years.
Milei has also been tempering his proposals and his combative discourses in order to appeal to more voters. He has said, for example, that his dollarization plan will take time, as would the shutting of the central bank and the removal of subsidies on public services.
CEDING OVERSIGHT OF THE ECONOMY
Massa accepted defeat soon after the first results came out, saying that he will hand over “the responsibility” of the economy to Milei, effective Monday. It is a national holiday on Monday in Argentina.
Investors will be watching closely for signs of who Milei will name to his cabinet, in particular who will take on the challenge of reviving the crippled economy. Milei did not mention any names in his victory speech.
In the medium to long term, the economy could benefit from tailwinds. Initially, Milei’s government likely will benefit from a recovery in farm production, a major source of dollar inflows on corn, soybeans and wheat, after a severe drought cost the country $20 billion in inflows, equivalent to nearly half of the central bank’s $21.5 billion in international reserves.
At the same time, the country’s export potential is widening. The development of Vaca Muerta, one of the world’s biggest shale deposits, is increasing oil and natural gas exports, while the burgeoning mining of copper, lithium and other metals promises to do the same.
[PHOTO. Argentine presidential candidate Javier Milei speaks at a rally before the election. Credit: La Libertad Avanza.]