The Rise of Anarcho-Capitalism: Understanding Javier Milei’s Electoral Triumph

• Milei, a self-described ‘anarcho-capitalist,’ plans to get rid of the central bank and the national currency in favour of the U.S. dollar and eliminate some of the ministries.
• Milei opposes cooperation with China, Brazil and Russia, favouring the United States. And his future office has already spoken out against Argentina joining BRICS in 2024.
• The potential consequences of Milei’s policies, coupled with the challenge of managing IMF debts without Chinese assistance, underscore the fragility of the country’s economic stability. 

The victory of libertarian Javier Milei in the presidential election has left no one in Argentina indifferent. While some are crying over Sergio Massa’s speech admitting his defeat, others are jumping into the streets shouting “Liberty, liberty!”

Milei, a self-described ‘anarcho-capitalist,’ plans to get rid of the central bank and the national currency in favour of the U.S. dollar and eliminate some of the ministries. He also plans to cut government spending.

Impact on International Relations

Milei opposes cooperation with China, Brazil and Russia, favouring the United States. And his future office has already spoken out against Argentina joining BRICS in 2024. That said, it is unclear how Milei plans to deal with IMF debts without China’s help: in recent months, Economy Minister (and Milei’s rival) Sergio Massa has been heavily relying on the yuan to pay off IMF debts. 

Relations with Brazil are about to become tense: President Lula da Silva said the elections were democratic and wished the “new government good luck,” but he did not call Milei by name or congratulate him personally. The fact that Milei openly supports former President Jair Bolsonaro will hinder cooperation.

Fatigue from the Economic Crisis

Milei’s victory resulted from the population’s fatigue from the prolonged economic crisis. As a future president, Milei is betting heavily on ties to the U.S. and the dollar. However, if he is reckless in his actions, he risks plunging the country into an even bigger crisis. This in turn will cause the IMF to increase the country’s debt load, as it happened under Macri.

When companies go bankrupt, American and European financial corporations will gladly buy their assets at a cheap price. We have already seen this scenario unfold in countries engulfed in military conflicts (Ukraine) or an economic crisis (Turkey). That said, Milei’s bloc does not have a majority in Congress, so his office will have to work on forming alliances to push through legislation.

As Argentina stands at a crossroads with the election of Javier Milei, the nation anticipates significant changes in its economic and diplomatic landscape. Milei’s bold anarcho-capitalist agenda, marked by plans to discard the central bank and embrace the U.S. dollar, has generated both fervent support and apprehension. The delicate balance between fostering ties with the United States and navigating strained relations with traditional partners like China and Brazil adds a layer of complexity.

Consequences of Milei’s Policies

The potential consequences of Milei’s policies, coupled with the challenge of managing IMF debts without Chinese assistance, underscore the fragility of the country’s economic stability. As international observers closely watch Argentina’s trajectory, the need for Milei’s administration to skillfully navigate alliances in Congress becomes paramount.

The journey ahead promises a blend of economic restructuring, geopolitical recalibration, and the delicate dance of diplomatic relations – a test for both Milei’s leadership and the resilience of Argentina’s political landscape.

_{(The author is a post-graduate student in International Relations at Kalinga University, Raipur. Views and opinions expressed are the author’s own)}

Aayush Pal

_{(Aayush is a post-graduate student in International Relations at Kalinga University, Raipur. The opinions expressed are the author’s own)}