How feasible is it for Milei to carry out the proposals with which he promises to transform Argentina?

Javier Milei He achieved what many believed improbable some time ago and was elected president of Argentina this Sunday. Now comes his biggest challenge: governing without majorities a country in crisis that he promised to refound..

This libertarian economist who burst into Argentine politics just two years ago with an anti-system speech triumphed in the presidential runoff with 55.7% of the votes compared to 44.2% for the ruling Peronist candidate Sergio Massa, with 99% of the count completed. .

LOOK: “Today the end of Argentine decadence begins”: the phrases from Javier Milei’s first speech as president-elect

“Today the reconstruction of Argentina begins”Milei said in his victory speech Sunday night.

Argentina is going through one of its worst economic and social moments since it regained democracy 40 years ago, a key factor why Milei’s message against the “political caste” attracted so many frustrated voters.

The Argentine president-elect proposed radical changes that range from dollarizing the economy and closing the Central Bank to cutting the role of the State in society.

But several experts anticipate that Milei’s electoral platform will clash with the system of checks and balances of Argentine democracy, since the next president will lack majorities in Congress and will have to negotiate even with rivals that he reviled in the campaign.

“Milei has a structural weakness to be able to advance his agenda in the Legislative Branch. And in a federal country like Argentina, where governors have extraordinary weight, he does not have a single governor from his party,” says Argentine political scientist Sergio Berensztein.

“We are facing a president who is going to have enormous weakness,” Berensztein tells BBC Mundo.

“The great challenge”

Milei, who is 53 years old and also defines himself as an “anarcho-capitalist,” has said that his goal is to straighten Argentina’s course so that it once again becomes a thriving power.

“Today we return to the path that made this country great (and) we once again embrace the ideas of freedom,” he said in his first speech after being elected president.

But the country has recently lacked medium-term political consensus. AND The confrontation between the ruling party and the opposition has become a norm that, in turn, increased the instability and deterioration of the economy..

Argentina today has more than 18 million people or 40% of its total population living in poverty, as well as an annual inflation of 143% in the last 12 months until October, according to official figures.

In this context, Argentines have decided to entrust the government to a candidate whose anti-system speech draws comparisons with the former far-right Brazilian president Jair Bolsonaro or the American Donald Trump, whom he says he admires.

However, Milei’s lack of experience in politics and in executive tasks in the public or private sector raises “an enigma regarding his ability to make decisions”warns Berensztein.

The president-elect must promote reforms that he proposed, such as the elimination of 10 of the 18 ministries that the government has or the drastic reduction of public spending, in a Congress where no political force will have a majority and Peronism will be the first minority.

La Libertad Avanza, Milei’s coalition founded just two years ago, will have just 38 deputies in a chamber of 257 members and eight senators in a total of 72.

For Sunday’s runoff, Milei achieved the support of rivals such as former president Mauricio Macri and former presidential candidate Patricia Bullrich.

But this divided their center-right coalition, Together for Change, which at most would guarantee the president-elect the support of about a third of the deputies and senators.

Milei suggested during the campaign that, If you had difficulties getting Congress to approve reforms that you consider fundamental, you could submit them to a plebiscite.

But the Argentine Constitution provides that binding popular consultations must also go through Congress to be convened.

Milei has also raised the possibility of calling a plebiscite to repeal the law that allowed abortion in 2020, although experts disagree on whether that would be constitutional, since the norm is criminal.

Questions have also arisen about Milei’s idea of ​​decentralizing the education system by giving educational vouchers or checks to parents so that they can choose which school to send their children to, because education depends by law on provincial governments.

Even the decrees of necessity and urgency that Milei could resort to as president to promote some measures would have to be ratified in Congress.

“Milei is not going to have a majority in either chamber and this is a very specific condition that he is going to face,” agrees Argentine political analyst Rosendo Fraga.

“The political system is Milei’s great challenge”Fraga tells BBC Mundo.

And dollarization?

Even if it overcomes the great political challenges it faces, Milei would have practical obstacles to carry out two of its most emblematic proposals, such as the dollarization of the economy and the closure of the Central Bank..

The lack of control of Argentine inflation led Milei to maintain that the country is “incapable of having currency” and that the issuance of banknotes by the Central Bank represents a “robbery” from the population.

But the president-elect has offered few details about how he plans to implement this change.

A key question about Milei’s monetary plan is How will the economy of a country where dollars are scarce be dollarized?.

“To carry out an orderly dollarization, it is necessary to have a sufficient amount of dollars to replace the existing pesos and to dollarize the financial system,” Claudio Loser, former director of the International Monetary Fund for Latin America, tells BBC Mundo.

Milei himself estimated during the campaign that this would cost about US$35 billion, which in his opinion could be covered using the reserves and bonds held by the Central Bank.

But Loser, like other economists, warns that any dollarization plan will first require correcting the country’s fiscal and monetary policy, reducing inflation, stabilizing the financial system and securing lines of credit to gain confidence.

All this could take at least several months.

“If you want to do it immediately, my expectation is that it would generate a significant shock to the economy,” says Loser, who presides over Centennial Group Latin America, a financial consulting firm based in Washington.

At the same time, even if Milei achieved the promised dollarization, Experts doubt that the Central Bank can be completely closedsince in addition to a monetary function this institution controls the banks that operate in the Argentine market.

“If what [Milei] He says closing the Central Bank is so that the government is no longer financed, it is feasible. Eliminating it does not exist in practice in dollarized countries (…) because there is a need to maintain financial discipline and that without a Central Bank or equivalent would be very complicated,” says Loser.

However, in the opinion of this Argentine specialist, the most serious challenge that Milei may face would be growing conflict as it promotes measures to reduce subsidies and lower public spending.

In Argentina, the fight for the agendas of non-Peronist governments usually moves to the streets, with union and student protests that can become massive.

“It may be in the interest of Peronism or the eventual opposition to Milei for him to carry out fiscal consolidation and pay the political cost of doing so,” Berensztein reasons.

“So it is likely that on some things he will achieve consensus,” he adds, “not because the political system is generous, but on the contrary: it is rather selfish and Milei would become a very unpopular president.”