Argentina's newly elected president: man with chainsaw and Ukrainian flag

What should Ukraine expect from Javier Milei's victory and what exactly can give impetus to the development of bilateral relations between our countries

In the Argentine presidential election, Javier Milei, a person with a very unusual political definition - "far-right libertarian" - won the second round on Sunday. He is called a radical, a populist, an inexperienced politician. Some people admire him unconditionally, while others mercilessly criticize him. But for us, the most important thing is that he is critical of Putin's Russia, has consistently expressed support for Ukraine, and even wore the Ukrainian flag at the beginning of the full-scale Russian invasion.

DOLLARIZATION, COST CUTTING, RAPPROCHEMENT WITH THE US

No wonder President Volodymyr Zelensky was one of the first leaders to congratulate Milei on his victory.

"Congratulations to Javier Milei on his convincing victory in the presidential election in Argentina. I appreciate his clear position in support of Ukraine. I look forward to working together to strengthen our cooperation and restore the international order based on international law," the Ukrainian President wrote on social network X.

During his presidential campaign, Milei promised drastic changes that would help overcome the "tragic reality" of Argentina, where inflation is as high as 143 percent and poverty has reached 40 percent of the population. "Argentina will return to a place in the world that it should never have lost," he said.

Milei was notable for attending campaign events with a chainsaw to symbolize spending cuts, including pensions, and for threatening to close the national bank and introduce the dollar to overcome the financial catastrophe.

The right-wing populist with authoritarian instincts, as he is called in the media, has been compared to former US President Donald Trump and former Brazilian President Jair Bolsonaro, but this similarity is only in character and eccentricity, not in views.

The Argentine does not advocate protectionism, unlike the former US president, and is not going to tell manufacturers where to locate their businesses. And Bolsonaro rejected modern democracy with its liberal aspirations.

The economy in general reacted positively to Milei's victory. Investors were especially happy. In New York, prices for Argentine stocks and bonds rose sharply, and the value of the state-owned oil and gas company Y.P.F. jumped by as much as 40%!

Since 2000, Argentina has defaulted on its public debt three times. Over the past few years, drought has hit the agricultural sector. Economic recession, inflation and poverty have become attributes of modern Argentina. Over the past four years, the value of the peso has fallen by more than 90% against the US dollar.

Milei, now 53, first gained attention on evening TV shows, where he talked about everything from sex to the economy. He blamed the government for the economic woes, promising to break down all obstacles. He directed all the fire of criticism at both the center-left Peronist parties that had been in power for almost twenty years and the center-right government of 2015-2019 for not being conservative enough.

If elected, Milei told voters, he would cut government spending, lower taxes, eliminate government regulation, replace the Argentine peso with the US dollar, and eliminate most government institutions, including the central bank.

People believed him, especially young people. He received 56% of the vote.

"Today marks the end of decline in Argentina," he said at a victory party on Sunday.

Milei grew up in the capital city of Buenos Aires. He was the lead singer of the cover band Everest. After a short career as a goalkeeper for the professional soccer team Chacarita Juniors, he switched to economics, earned two master's degrees and worked for several financial companies, including the international bank HSBC. He is a member of parliament with two years of experience.

In an interview with The Economist in September this year, Milei said that his fascination with the publications of New York economist Murray Rothbard turned him into an "anarcho-capitalist." According to him, the economy should function only on the basis of private contracts, and the state and its social institutions are the "enemy."

However, Milei recognized some difficulties in putting this philosophy into practice. However, he remains committed to minimizing the role of the state, believing that its functions should be limited to defense and law enforcement.

Experts note the difficulties that Milei may face in trying to gain the support of a bicameral parliament dominated by center-right and center-left parties.

Serious reservations have been raised about his main trump card: the dollarization of the economy. Milei argues that the root cause of Argentina's inflationary problems is the regular use of the printing press. In his opinion, the elimination of the central bank and the introduction of the dollar as the only legal currency will stop inflation and force the government to take a sober approach to the balance of income and expenditure.

Three Latin American countries - Ecuador, El Salvador, and Panama - already have this experience. These countries have dollarized their economies, but they are much smaller than Argentina.

According to his plan, Argentines would have to exchange all their pesos for dollars.

At the moment, Argentina does not have the dollars needed to dollarize its economy. According to analysts, the country owes more money in foreign currency than it has. This means that for his plan to work, the Milei government will need to borrow $30 billion. "If I don't get $30 billion, I won't solve this problem in one day," he admitted.

In recent years, China has been actively supplying Argentina with hard currency, but Milei is a staunch anti-Communist. He does not accept either Xi Jinping or Vladimir Putin, whom he calls an autocrat, or Pope Francis, whom he also considers a communist.

In the above-mentioned interview, he said that if the parliament does not support his proposals, he will hold referendums to implement structural reforms that he considers fundamental.

Official Washington reacted to the victory of the US supporter with restraint. White House National Security Advisor Jake Sullivan congratulated Mr. Milei on his election "and the people of Argentina on holding free and fair elections."

According to Sullivan, the United States "looks forward to developing a strong bilateral relationship based on a shared commitment to human rights, democratic values, and transparency."

But Trump rejoiced. "The whole world was watching!" he wrote on social media. You will turn your country upside down and truly make Argentina great again!"

ESTAMOS CON UCRANIA

"At the beginning of the Russian invasion, Milei asked the Ukrainian embassy to provide him with a Ukrainian flag to demonstrate support for our country and oppose Russian aggression," Ukraine's Ambassador to Argentina Yuriy Klymenko told Ukrinform. According to him, the future president was photographed with a sign "I support Ukraine" (Estamos con Ucrania).

During the presidential campaign, Milei consistently spoke out against dictatorial regimes and criticized them in every possible way, emphasizing that as president he would primarily develop relations with Israel and the United States. His first visits will be to these countries.

"In this regard, we have expectations that during his presidency, Ukrainian-Argentine relations will receive a new impetus and be filled with new activities," Klymenko said.

In his opinion, Argentina will be able to join the Ukrainian Formula for Peace, as well as participate in the Global Peace Summit to be held in the first half of 2024. The Ambassador noted that Argentina is involved in meetings at the level of national security and foreign policy advisors. In particular, it was present at the meetings in Jeddah, Saudi Arabia, in August and in Malta in October.

Ukraine also expects Argentina to join international sanctions against Russia, although it has never participated in sanctions measures (except for those imposed by the UN Security Council), like other Latin American countries.

"We hope that Argentina will do this, given the importance of sanctions to stop the killing of Ukrainians and stop the war," the ambassador said.

In addition, Ukraine hopes that Argentina will support the introduction of a compensation mechanism to cover the damage caused to Ukraine by Russian aggression and the establishment of a special tribunal for the crime of aggression of the Russian Federation. Two Latin American countries, Guatemala and Costa Rica, have already joined the relevant working group.

In addition, Klymenko added, Ukraine hopes that the presidency of Mr. Milei will give impetus to the development of bilateral relations, both at the level of high-level visits and in terms of deepening economic relations. In particular, a roadmap for the development of relations in the coming years may be developed with specific tasks.

For example, next year a meeting of the intergovernmental Ukrainian-Argentine commission on trade and economic cooperation and a business forum may be held within its framework, the ambassador noted.

There may also be a Ukraine-Latin America and the Caribbean summit, where Argentina would take a leading position. It is not for nothing that in his speech after the victory Milei said that Argentina should become a superpower.

Volodymyr Ilchenko

The first photo: Tomas Cuesta