What if Milei Wins?
If he wins in the runoff against Sergio Massa, the political, economic, and social realities of Argentina, along with his own convictions, might result, in practice, in a more centrist center-right administration rather than radical in its policies. Based on strong economic and political principles of classical liberalism, it might be also characterized by a pragmatic approach in many cases and of a populist communication style from Milei.
Much has been said about Javier Milei and the upcoming presidential elections in Argentina, set to take place on Sunday, November 19th. There seems to be a consensus that candidate Sergio Massa, the current Minister of Economy, essentially represents continuity, while Javier Milei represents change.
Consequently, considering that either candidate could win, I thought it would be interesting to present these comments on the potential political profile of a Milei government. I present them from an impartial perspective, although I acknowledge that if I were Argentine, I would probably have voted for Patricia Bullrich.
This, moreover, can shed light on the direction of the land of Pope Francis and Lionel Messi might take under Milei’s potential victory. His eventual win and administration could even have a political impact on the rest of Latin America, including Colombia.
Let’s then move on to the points.
1. Ideological Profile of Milei
Given the strong ideological drive behind his political actions, in cases like that of Javier Milei it is particularly important to perform an ideological profiling, within a conceptual framework that is equally applicable to politicians of all ideological tendencies.
Thus, despite the verbal noise, Milei is an outsider within the center-right space. That is, the spectrum that ranges in its various shades from classical liberal center to conservative right.
He is a classical liberal in economics and conservative in politics, akin to the Anglo-American economic conservatism promoted by statesmen such as Ronald Reagan and Margaret Thatcher, and politically close to that of the United States in issues like abortion. He draws inspiration from classical liberal thinkers such as F.A. Hayek and Milton Friedman.
He is radical, with a populist touch, and is not extreme right. Regardless of the intensity of a particular politician’s ideology, these conceptual clarifications are important for conducting more accurate political and geopolitical risk analyses.
He is considered radical because, in the Argentine context, certain ideas associated with classical liberalism are seen as radical. Moreover, he is considered radical for advocating proposals that are viewed as radical even in other countries. For example, the closure of the Central Bank, the dollarization of the economy, or the denial of climate change.
Milei’s populism is predominantly reflected in his communication style and his ability to resonate with the public by channeling their dissatisfaction with the ruling elite, whom he refers to as the “caste.” In contrast, Massa’s populism is manifested in his policies.
Populism understood as a way of accessing power, whether from the left or the right, that exploits citizen emotions against the elites and/or whose policies may jeopardize the political, economic, and social stability of a country.
And Milei is not extreme right because he respects liberal democracy and private property. Nuances aside, what essentially unites the extreme right and the extreme left is their disdain for liberal democracy and the principles and values that underlie it. What separates them is that the extreme left despises private property, whereas the extreme right does not. The Western centrality or broad political center respects both liberal democracy and private property.
2. Context Leading Him to the Runoff
What underlies, what moves emotions and therefore votes in this election towards Milei, and generally towards the center-right, is the deep dissatisfaction of the people with government officials, which, as said before, Milei calls the “caste.”
This is a result of the severe economic crisis that Argentina is going through, especially the high inflation and low growth projections.
According to Bloomberg, as of November 13th, inflation reached 142% year-on-year, the highest since the early 1990s.
Regarding economic growth, Bloomberg reports that it fell by 2.8% in the second quarter, making the worst since the pandemic in early 2020. It adds that economists surveyed by the Central Bank expect it to fall by 2.8% this year and contract again in 2024.
At the time, Forbes, for its part, reported that the OECD in a document released in September estimated that the GDP would fall by 2% in 2023 and by 1.2% in 2024. Likewise, it calculated that inflation would rise to 118.6% this year and that next year it would be even higher, reaching 121.3%
Voters are therefore seeking change, a sentiment that transcends social classes, ideological divisions, political affiliations, and generational limits. In fact, Milei is quite strong among the youth.
Massa, for his part, has played on the fear of change to Milei’s policies and to an outsider with his explosive personality.
He has also leveraged his power as Minister of Economy by implementing the “Plan platita” after the PASO, that is, the joint primaries.
The “Plan platita” consists of a series of economic measures implemented during the campaign to increase citizens’ purchasing power in the short term amidst the described economic difficulties. These measures can include both an increase in disposable income for citizens and a reduction in their tax burdens.
3. What Milei’s Administration Would Look Like
Milei has clear economic and political principles and is increasingly seen as more pragmatic. His discourse, manners, and alliance with former President Mauricio Macri and his former contender, Ex-Minister of Security Patricia Bullrich, indicate this.
Such factors, along with the lack of a parliamentary majority for his party and the economic and social realities of Argentina, would mean that if he wins, his administration might be more centrist than radical, albeit one of change in economic, political, and social terms.
Thus, in practice, it might be a more centrist center-right administration rather than radical in its policies. Based on strong economic and political principles of classical liberalism, it might be also characterized by a pragmatic approach in many cases and of a populist communication style from Milei.
In the end, what Milei seeks is to liberalize and stabilize the Argentine economy, which in principle could make it more attractive for investment.
4. Final Considerations
If Milei wins, Argentina would become another Western country that chooses an outsider with a radical approach, whether from the right or the left, in response to people’s exhaustion with the establishment, economic challenges, or security concerns, which has been the other theme of the campaign.
Some have performed better than others. His potential victory and whether his government is good or bad could have a significant political impact across the region.
How will it go if he wins? It’s hard to tell, and we will have to monitor the situation. At CC&PRMC, we help not only to identify, evaluate, and minimize risks but also to turn them into opportunities.
At CC&PRMC, we deeply understand the dynamics of geopolitical and political risk, and its impact on businesses, both locally and globally. We specialize in the political, geopolitical, economic, and business environment of Latin America and Colombia.
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* The author is the Managing Partner at CC&PRMC, a firm specializing in political, geopolitical, and compliance risk. Connect with him on LinkedIn for further insights and discussions here.
© 2023, Jorge Enrique Gómez Pardo. All rights reserved. If you use this content, please give credit to the author.
