"The next six months are going to be very tough," warned Javier Milei, the far-right libertarian who won Argentina's presidential election on November 19 with 55.7% of the vote). There will be "no gradualism" in his measures, which are intended to provoke a free-market "shock" from the moment he takes office on December 10. His plans include drastic cuts in public spending (cuts of as much as 15% of GDP), replacing the peso with the dollar, and shutting down the central bank. The idea is to impose a brutal treatment to stabilize the country. But the approach is widely contested by economists of all stripes.

And yet it is the very bitter potion that part of Milei's electorate is ready to swallow, exhausted by a moribund economy that various policy approaches – both redistributive and more market-oriented – have tried to cure since the early 2000s. The results are alarming: 143% year-on-year inflation, 40% of the population below the poverty line, an exchange rate locked by a series of restrictions, and a colossal debt (equivalent to €41 billion euros) to be repaid to the International Monetary Fund (IMF).

The situation smacks of déjà vu. In 2001, the country plunged into the worst crisis in its history. There was looting, massive demonstrations, unemployment, six out of 10 people were living in poverty, and Argentina defaulted on its debt payments. It was a year zero of sorts for many Argentines. Since then, a number of measures have been put in place to help the most deprived, preventing an explosion of anger – for the time being. But why can't this country with many natural resources (agriculture, mining, hydrocarbons, etc.) and top-quality public universities get out of its rut?

'Moving towards a diversified economy'

There are multiple causes. They are all rooted in the country's inability to generate sustainable growth and build a solid productive model. At the root of these shortcomings is often a short-term, or improvised and experimental political vision on the part of both Peronist and anti-Peronist governments. (For 16 of the last 20 years, left to center-left Peronists have been in government.)

But it hasn't all been doom and gloom. After the crisis of 2001, there was an upturn, a mechanical phenomenon, after hitting rock bottom. Reconstruction took many years, under the presidencies of the Peronist spouses Nestor Kirchner (2003-2007) and Cristina Fernandez de Kirchner (first term from 2007 to 2011). The economy grew, buoyed by the price of raw materials, and it was at this time that a social safety net was put in place.

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