Javier Milei’s victory in Sunday’s presidential election runoff in Argentina was not that hard to predict. But the 11-point gap with which the “market anarchist” trounced Economy Minister and Peronist center-left candidate Sergio Massa stunned everyone in Buenos Aires – even his own most ardent supporters. In the end, anger at the “political caste” was stronger than fear of the extreme right.
First of all, the election result marks a clear internal political reconfiguration: the coalition bipolarity that has been in place for the past two decades, with the heterogeneous Peronist pole, dominated by the center-left and the figure of Cristina Fernandez de Kirchner, and the liberal-conservative pole of former President Mauricio Macri (2015-2019), has definitively collapsed.
Massa, who aspired to become the new moderate leader of a Peronism in freefall, announced on election night that he was retiring from political life. The Unión por la Patria that supported him is already struggling to hold together. And Macri, an enthusiastic supporter of Milei after the defeat of his own candidate Patricia Bullrich in the first round on October 22, can be considered the real winner of these election: in one fell swoop, he got rid of the moderate wing of the coalition that supported him during his failed stint in government and secured top positions for his acolytes in the “libertarian” executive that will govern starting on December 10.
Milei’s La Libertad Avanza party doesn’t even have the needed number of leading figures to fill all the positions of a national government. Moreover, it can only count on a small group in Parliament, it has no control of any of Argentina’s 24 provinces, and there are very few municipalities in which it has a majority. Macri’s support will be vital to Milei’s future: a partnership sealed in the long embrace between the two at the Hotel Libertador, where the new president-elect awaited the results on Sunday. Press officers from both parties were quick to spread the news of that embrace as widely as possible.
One of the many questions that arise is whether the mainstream right’s support for what promises to be the world’s first “libertarian” government will bring a glimmer of rationality and moderation to its ultra-neoliberal agenda. Milei’s ideology is based on an extremely individualist and economy-based conception of the defense of individual freedoms. The great axiom that brings together the extravagant proposals he put forward during the campaign is the minimization of the state, seen as an enormous source of corruption and distortion for the economy and society. “Today the transformation of Argentina begins,” were his first words as president-elect. “Today the end of decadence begins. The model of the omnipresent state that creates poverty is finished.”
In the early hours of Monday, the shares of Argentinian companies listed on the New York Stock Exchange soared by 40 percent. These all operate in heavily state-regulated sectors (banking, energy, transportation) that the president-elect has announced he will liberalize. In his first hours as president-elect, Milei also doubled down on some of his most controversial plans: to close the Central Bank, privatize major state-owned companies, including the national energy company YPF, public television, Radio Nacional and the state news agency Télam. He stressed that as early as the day he takes office, he is going to take urgent measures to reform the state’s complex bond system – Argentinian bonds were up 6 percent on Wall Street after his victory – and restore Argentina’s finances.
Argentina’s Sovereignty Day, a public holiday it celebrates on November 20, postponed by one day the local market’s first verdict on the election result. There was great trepidation, especially around the currency market: the U.S. dollar, with which Milei would like to replace the Argentinian peso, has been the benchmark currency for the prices of durable goods and the reserve asset for Argentines’ savings for years. Any jump in its value will bring severe spillovers to the local market, and a disproportionate rise was expected for Monday. Milei himself has predicted such instability, but was careful to preemptively place the blame for any economic collapse that may happen between now and December 10 on the outgoing government.
Meanwhile, of great concern is the fact that the Milei phenomenon has opened the floodgates for speech that had been considered unacceptable or politically incorrect. Social media is now filled with complaints from activists and human rights defenders who have received threats in recent days. “From Monday, the green Ford Falcon will be back,” read many anonymous notes delivered to the homes of several activists, referring to the car used by the military during the dictatorship (1976-1983) to disappear political opponents.
In a country like Argentina, marked by very strong activism and widespread political participation, Javier Milei’s model will only be possible through a harsh crackdown on social opposition in the streets. The new president-elect has already warned, as soon as the results were confirmed, that there will be zero tolerance against those who protest.