Throughout the lengthy campaign, the ultraliberal candidate, Milei, has failed to provide a clear explanation regarding the financing of the dollarization of South America’s second-largest economy, Argentina. This lack of transparency regarding the necessary funds needed to achieve this objective is a serious concern for the country, especially considering Argentina’s insufficient US dollar reserves.
Argentina finds itself in a precarious situation, as Milei attempts to make a limonada, a lemonade, without any limes. The absence of cash reserves not only undermines the credibility of Milei’s economic plan but also raises doubts about the feasibility of implementing such a drastic measure. Dollarizing an economy is a complex process that requires careful consideration of various factors, including the availability of foreign currency reserves, the stability of the financial system, and the impact on domestic industries.
As the campaign unfolds, one prominent symbol associated with Milei’s “mileista” movement is the motosserra, or chainsaw. This tool serves as a representation of the candidate’s ambitious goal to significantly reduce government spending. Given that the Argentine government currently consumes approximately 40% of the Gross Internal Product (GIB), Milei contends that reducing spending is a necessary step towards revitalizing the economy. He claims that one-third of all expenses can be attributed to the motorcycle industry alone.
However, recent developments indicate a decline in the motoserra’s power. In the second round of the campaign, Milei’s tone has noticeably softened. While he has been critical of Argentine government subsidies in the past, he now promises a more gradual approach to reform. Rather than advocating for sudden and drastic changes, he warns against substantial increases in the cost of electricity or fuel, possibly to alleviate concerns and gain wider acceptance among the general public.
In contrast, Sergio Massa, another candidate in the race, has adjusted his stance under the pressure of widespread scare tactics from the government. Massa has moderated his plans for shrinking the size of the state, stating that he will not terminate public employees or privatize the education and healthcare systems. This shift in tone appears to be a strategic move to capture the votes of the radical voters who propelled him to the second place in the first round. Massa understands that without their support, his chances of winning the election on Sunday are slim.
While the change in rhetoric from both Milei and Massa may make political sense, it leaves lingering questions about the candidates’ ability to translate their promises into action if elected. It is still uncertain whether Milei has a concrete plan to address the economic challenges that Argentina faces. Dollarizing an economy requires strong financial backing, meticulous planning, and the support of various stakeholders. Without a clear explanation of the source of funding for this ambitious undertaking, doubts persist about the feasibility and potential consequences of such a radical economic transformation.
In conclusion, Milei’s failure to provide a comprehensive explanation of the funding for dollarization, coupled with Argentina’s lack of US dollar reserves, raises serious concerns about the viability of his economic plan. Additionally, the softening of his tone and the moderation of Massa’s plans highlight the challenges of implementing drastic reforms in a politically volatile landscape. While promises and rhetoric play a crucial role in election campaigns, the real test lies in the candidates’ ability to translate their words into tangible actions. Only time will tell whether Milei, if elected, can overcome these challenges and bring about the change he envisions for Argentina’s economy.