Javier Milei, a radical libertarian economist and first-term congressman, has won a decisive victory in Argentina’s presidential election, vowing “drastic” changes to the country’s economic strategy amid its worst crisis in two decades.
Mr Milei won 55.7 per cent of the vote, against 44.3 per cent for economy minister Sergio Massa of the centre-left Peronist government, with more than 99 per cent of votes counted.
“Today is the end of Argentina’s decline,” Mr Milei told supporters at the Libertador Hotel in Buenos Aires on Sunday. “Today is the end of the model of an omnipresent state that impoverishes Argentines.”
He pledged swift reforms to the country’s fragile economy. “I want you to understand that Argentina is in a critical situation. The changes our country needs are drastic. There is no room for gradualism.”
Mr Massa announced that he had called Mr Milei to concede before the official results were published, adding that he had promised to maintain the “economic, social, political and institutional functioning of Argentina” before Mr Milei’s December 10th inauguration.
Mr Milei’s campaign centred on a pledge to take a “chainsaw” to the state – slashing spending by up to 15 per cent of gross domestic product – and to dollarise the economy to stamp out inflation. Argentina’s annual price rises hit 142.7 per cent in October.
After the results were announced, thousands of Mr Milei’s supporters filled the area surrounding Buenos Aires’s Obelisk monument.
“I’ve been waiting for this all my life: no more Peronists, no more thieving, no more lies,” said Leonardo Estarone, a 57-year-old physiotherapist who was banging a drum in the street. “My children will get to live in a free country.”
Mr Milei, a self-described “anarcho-capitalist”, stirred controversy throughout the campaign, expressing support for ideas such as legalising the sale of human organs and eliminating all gun laws.
He also referred to China, Argentina’s largest trading partner, as “murderous”, the Argentine Pope Francis as “a filthy leftist” and climate change as “a socialist hoax”.
However, Mr Milei walked back several of those statements in an effort to woo centrist voters following October’s first-round vote, in which he came second to Mr Massa. Mr Milei was aided by endorsements from former president Mauricio Macri and Patricia Bullrich, the candidate for centre-right coalition Juntos por el Cambio (JxC), who was eliminated in the first round.
Former US president Donald Trump – to whom Mr Milei has frequently drawn comparisons – congratulated the libertarian outsider. “I am very proud of you,” Mr Trump said in a post on his Truth Social platform. “You will turn your Country around and truly Make Argentina Great Again!”
Italy’s prime minister Giorgia Meloni called Mr Milei to offer her best wishes for his presidency, her office said. Ms Meloni, who spent years on her own country’s political fringes before a surge of popularity fuelled her election victory last year, emphasised the countries’ “common values”.
The win for Mr Milei, a former television commentator who became famous for rants against economic mismanagement and corruption among Argentina’s governing elite, is a rebuke for Mr Massa’s Peronist movement, which has dominated politics since the country returned to democracy in 1983.
Over the past two decades, left-leaning Peronist governments have doubled the size of the public sector and introduced expensive subsidies and tight regulation across the economy.
The Peronist model has faced unprecedented pressure this year amid spiralling inflation. Mr Massa has resorted to money-printing to finance spending and tightened strict trade and exchange restrictions to protect scarce foreign currency reserves.
Mr Milei’s critics had argued that he and his running mate – Victoria Villarruel, a longtime defender of Argentina’s 1976-83 dictatorship – pose a threat to democracy. Mr Milei, who has no executive experience, also faces questions about his ability to realise his agenda, analysts said.
Ana Iparraguirre, an Argentine political analyst and partner at Washington-based strategy firm GBAO, noted that Mr Milei won more votes than any candidate since 1983, albeit in a run-off election. “That result gives Milei a strong degree of legitimacy, but he has an enormous institutional weakness,” she said. “He will have to anchor his reforms in popular support.”
Mr Milei’s La Libertad Avanza (LLA) coalition, founded in 2021, will hold just seven of 72 seats in Argentina’s senate and fewer than 40 of the 257 in the lower house. It has no governors in any of Argentina’s 23 provinces.
While Mr Macri has said JxC will support LLA on “reasonable” reforms, other coalition leaders remain harsh critics of Mr Milei, who in one of his first interviews on Monday said he intended to privatise as many state companies as possible, including oil group YPF.
Most economists in Argentina say Mr Milei’s flagship plan to replace the peso with the US dollar is unworkable in the short term given that Argentina has almost no dollars in its central bank and no access to international credit.
The official exchange rate is fixed at just over 350 pesos to the dollar, but the black-market rate is at 900 pesos, creating widespread price distortions.
Fernando Marull, director of Buenos Aires-based economics consultancy FMyA, said Mr Massa was likely to try to avoid an official devaluation before leaving office, while Mr Milei’s win would put further pressure on the black-market exchange rate.
“But for sovereign bonds and stocks, Milei’s win will be positive, despite the questions about governability and his plans,” he said. “This puts an end to this idea that Argentina never changes – Argentina has just voted for a big change.” – Copyright The Financial Times Limited 2023