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At a crossroads: Argentines elect new head of state
The radical cure planned by Javier Milei is particularly well received by young people. photo
© Matias Delacroix/AP
Carry on like this or a radical turnaround? The runoff election is about the future of South America’s second-largest economy, which is plagued by high inflation, poverty and debt.
Amid a severe economic crisis, Argentines are electing a new president. At today’s In the runoff election, Economy Minister Sergio Massa from the ruling Peronists is running against the libertarian populist Javier Milei. In the most recent polls, the two were almost neck and neck. Around 35 million people are called to vote. Voting is compulsory.
The self-proclaimed “anarcho-capitalist” Milei promises a radical turnaround: He wants to introduce the US dollar as legal tender, abolish the central bank and many ministries and radically cut social spending.
“No one with such extreme views on economic issues has ever been elected president of a South American country,” said economist Mark Weisbrot of the US research institute Center for Economic and Policy Research. “It barely recognizes a legitimate role for government in some of the most important policy areas that most people see as necessary for a democratic, humane and stable society.”
Living in constant crisis mode
The radical cure planned by Milei is particularly well received by young people. Many only know life in constant crisis mode, are disappointed with the political establishment and finally want a fresh start.
Government candidate Massa, on the other hand, is likely to fundamentally continue the current policy of massive state intervention in the economy and extensive social programs. Most recently, he reached deep into the state treasury to keep voters happy. He ordered mass new hires in the public sector, approved higher income tax allowances and granted one-off payments for employees and pensioners.
Deep economic crisis
According to media reports, Massa has pumped the equivalent of several billion euros into the economy in recent months, around 1.5 percent of gross domestic product. The moderate Peronist recently fueled fears of a social cut-off if his rival Milei won the election.
South America’s second largest economy is in a deep economic crisis. The inflation rate is over 140 percent, and around 40 percent of people in the once rich country live below the poverty line.
Argentina suffers from a bloated state apparatus, low industrial productivity and a large shadow economy that deprives the state of much tax revenue. The national currency, the peso, continues to lose value against the US dollar and the mountain of debt is constantly growing.