‘Its the economy stupid’, why Millie turning Argentina hard towards the west

Submission statement: This article delves into Javier Milei's rationale for shifting Argentina's focus from China and BRICS towards the West, highlighting it as a cornerstone of his presidency. Additionally, it argues that Argentina possesses more favourable conditions for this pivot than commonly recognized.

There have been few political figures as remarkable and widely recognized as the Argentine President over the past year. However, understanding Javier Milei viewpoints has proven challenging for many. Nevertheless, amidst an economically weary Argentina yearning for change, there is growing trust in the 53-year-old economist, whose views might be perceived as a form of accelerated liberalism.

To understand Milei and his vision for Argentina which some has called a libertarian laboratory,¹ it might be needed to look at Argentina's historical dysfunctional past.

Populist economies

Before Javier Milei's influence, Argentina's economic policies were characterized by periods of populistic measures and attempts at economic stabilization through currency pegs and controls.

Throughout its history, Argentina has often found itself on the disadvantaged side of imperialistic relations, a trend that predates the Roca-Runciman Pact of 1933. It has been a common tactic for politicians to deflect criticism from themselves by attributing domestic problems to global powers and multinational organizations like the IMF.²

The country have experienced cycles of inflation, debt crises, and periods of economic contraction, often driven by policies aimed at protecting domestic industries, managing foreign exchange, and controlling inflation through subsidies and price controls.

Since the collapse of the military junta in the early 1980s, Argentine presidents have consistently focused their campaigns on economic platforms. This approach allows for short-term solutions aimed at producing quick results but often results in a cycle where each newly elected president implements immediate fixes, leaving long-term negative effects to be addressed by their successors.

Milei appears determined to break this cycle, and voters have given him the green light to do so.

Milei sees his card, change to the west.

The shift towards the West is not just about economics. As an economist, Milei strongly supports the Austrian School of Economics and identifies as a self-described anarcho-capitalist. This stance contrasts sharply with the market protections employed by countries like China and Brazil, which Milei openly criticizes.³

Milei is unlikely to advocate for an open economy that favours other countries if those countries can alter the rules to prioritize domestic providers over cheaper, faster, and superior Argentine products.

The President officially cut ties with the BRICS primarily due to ideological differences, but it can be speculated that he concluded that Argentina's crippling debt could be more easily resolved through cooperation with wealthier Western trade groups.

Not to mention that Milei probably have learned from history that beind depended on Chinese debt is a very bad idea, with getting rid of it being one of the priorities from the new government.

The truth is that Argentina has a lot resources that can be sold easier, faster and for more money to the west, with the same west having the expertise and tools to exploit it.

Argentina is endowed with abundant resources including oil, gas, minerals such as lead, zinc, iron ore, uranium, manganese, tin, silver, copper, and tungsten, as well as substantial salt deposits. ⁴

The country also boasts extensive reserves of marble, clay, limestone, and granite, crucial for the construction industry. With vast fertile lands, Argentina stands as a global leader in agricultural production.

With a looming climate crisis and the potential for major conflicts, Milei may have concluded that Argentina has the opportunity to emerge as a significant global supplier of food and minerals, thereby positioning Buenos Aires as a global power. This anticipation sets the stage for Milei's next strategic moves.

A NATO ally

Milei's government have applied to become a “global partner” of the North Atlantic Treaty Organization. The only one so after Colombia on the continent. For Argentina it aims to boost ties with western powers and attract investment.

This follows a clear break to the global south, as for Milei it represents the values he despises. Argentina will now bu F-16 fighter jets and use western machines instead of Chinese ones. Argentina is also getting a lot of Western goodwill by sending weapons to Ukraine and Israel.

For U.S it could not have come on a better time as the heavily western Colomba just two years earlier seleted the first left wing president in Gustavo Petro.

1.https://www.economist.com/the-americas/2024/06/20/javier-milei-has-turned-argentina-into-a-libertarian-laboratory
2. https://croft.olemiss.edu/images/Malenfant%20Thesis%20Final%20Draft.pdf
3.https://buenosairesherald.com/economics/mileinomics-javier-mileis-economic-plan-for-argentina
4. https://oxfordbusinessgroup.com/reports/argentina/2018-report/economy/untapped-possibilities-in-a-land-of-great-diversity-and-culture-argentina-seeks-to-unlock-the-potential-of-its-natural-resources