Chainsaw economics: will it work for Argentina?

Menas Associates logo

Date: Wednesday, 17 January 2024

Time: 14:00 - 15:00

Date: Wednesday 17 January | Location: Online Webinar | Time: 14:00 – 15:00 (UTC)

Javier Milei, who was sworn in as Argentina’s new president on 10 December, has promised wide-ranging shock economic treatment, including: dollarising the economy; shutting down the central bank; the wholesale privatisation of state companies; and reductions in bureaucracy and government spending. He aims to sweep away inflation and inefficiency, and to attack the entrenched corruption of the traditional ruling establishment. To make his point, for much of the election campaign he waved a chainsaw, claiming government spending could be cut back by the equivalent to 15% of GDP.

The success or failure of the Milei experiment matters. Despite rich natural resources and a well-educated labour force, Argentina has suffered a century of comparative economic decline. In the 1920s it was one of the world’s top 10 wealthiest economies. If Milei succeeds, he will trigger a fundamental realignment in Argentine politics towards the right of the spectrum while setting a new standard for free market reforms in Latin America. On the other hand, failure risks: a resumption of popular protests; further downward economic spirals; and renewed political polarisation. Somewhere amid these uncertain scenarios lies the more benign possibility that foundations may be laid for a consensual approach to the economic crisis.

The webinar will cover:

  • Election results and the current political balance
  • Milei’s diagnosis and economic plans for Argentina
  • Governability – the state of play in Congress
  • The new cabinet team
  • Government approaches to privatisation
  • The planned sale of the state-owned YPF oil company
  • Can Argentina dollarise without dollars?
  • Is this the end of the Mercosur trade bloc?
  • Will there be a realignment on the centre left?
  • Can soya, lithium and shale gas save the day for Milei?
  • Scenario planning for 2024

Speaker

Andrew Thompson was brought up in Argentina where he was based as a foreign correspondent for The Times and other publications during the Falklands/Malvinas war. He covered: the collapse of military rule and the restoration of democracy in the early 1980s; many subsequent cycles of economic booms and busts including hyperinflation and the default and devaluation crisis of 2001/2002. Andrew — who worked as head of the BBC’s Latin American Service — is now an independent analyst covering political risk across major Latin American countries. He has previously worked for Latin News, the Economist Intelligence Unit (EIU), and Oxford Business Group. He is an associate fellow at Canning House in London.

Carlos María Regúnaga is the head of Menas de Argentina. He holds a law degree from Buenos Aires University with post-graduate studies at Buenos Aires, Princeton, and New York universities. Corresponding Academician at the National Academy of Sciences of Buenos Aires. Academician at the Academia del Plata. President of the Fundación Circulo Cultural. Consultant of the Argentine Council for International Relations. Knight Commander with Star of the Equestrian Order of the Holy Sepulchre of Jerusalem. Former Chief of Cabinet of the Argentine Department of Commerce. Former professor of Constitutional and Integration Law at several universities in Buenos Aires and Porto Alegre, Brazil.