Argentina’s stricken economy could now become the test bed for Milei’s ideas. It is - to say the least - in desperate shape. Reserves are exhausted, output is shrinking and the country is effectively bankrupt. To keep services going the outgoing government simply printed money, fueling a catastrophic fall in the value of the peso and a return to the kind of price increases Argentinians last witnessed thirty years ago. The annual inflation hit 143 per cent last month.
Milei wants to sort things out by taking a chainsaw to the public sector, which he blames for many of the country’s woes. He aims to close many ministries, sell off state companies and slash public spending from 38 per cent to 23 percent of GDP.
He has threatened to close the central bank which he once described as “the worst thing in the universe”. He wants to abolish the local currency - the peso - and replace it with the US dollar.
Milei wants to align automatically with the United States and Israel and has said he will refuse to work with “socialist” countries, even though two of those singled out on his black list - neighbouring Brazil and China - are both among Argentina’s biggest trading partners.