Milei and the master of the universe

Donald Trump says he will keep Argentina’s economy afloat as long as a friendly government led by his good friend Javier Milei remains in charge, but if it is replaced by one that is hostile not only to him but also to the United States and is of the sort that could apply policies like those that ruined Venezuela, he will let it go under. By spelling this out, Trump set off what let us hope proves to be nothing more than a minor storm in the financial markets. While it is only to be expected that a US president or his counterparts in other countries would seek to help foreign leaders who are on their side and make life difficult for their enemies, most politicians understand that it would be better to let the people concerned take this for granted. But Trump is different: he wants everyone on planet Earth to know that his or her personal fate depends on him

Hours before hosting Milei in the White House, Trump jetted back from the Middle East where, after getting a rapturous welcome in Israel and being compared to Cyrus the Great, the Persian monarch who over two and a half millennia ago freed the Jews from their captivity in Babylon, he announced that – thanks entirely to him – that benighted region, which is littered with what on other occasions he calls “hell-holes” fought over by bloodthirsty fanatics, had just entered a “golden age” of peace and prosperity.

That little matter done and dusted, he said he would do his bit to “make Argentina great again” but also warned her inhabitants that if they failed to take proper advantage of the chance he was giving them by declining to back Milei in the upcoming midterm elections, they would be consigned to outer darkness.   

Trump is hard at work redesigning the international order to ensure that everything revolves around him.  It is a vanity project on a truly gigantic scale that – for him at any rate – so far has gone very well. Foreign dignitaries know that unless they feed his voracious ego they will get short shrift so, without thinking twice, European presidents and prime ministers, Arab sheikhs, Asian potentates and the odd Latin American – following in the footsteps of Milei who got there first – flock to Washington where they tell him how wonderful he is and how much he deserves the Nobel Peace Prize he openly covets. Do they really worship him? Some who pander to him may, but most know that, given his short attention span and his habit of turning against those who somehow offend him, everything could go wrong at any moment.

By behaving the way he does, Trump has put Argentines in a bind. Though it is clearly advantageous for the country to cosy up to him because he disposes of plenty of dollars, nobody likes having a foreign politician telling them to vote for those he approves of or face the consequences. While letting Trump play the role of the nation’s godfather may be far better than any available alternative, if there is one that is worth thinking about, there are plenty of people who would dearly like to tell him, and his favourite Milei, where to get off.   

By international standards, Argentina’s public debt is fairly low, but confidence in the country’s ability, or willingness, to service it properly is much lower. Were it not for this awkward detail, Milei would have no need to rely on the willingness to prop up the peso of Trump’s Treasury Secretary Scott Bessent because the capital markets would be happy to lend him whatever he needs to get through a difficult patch. Just how long this unfortunate state of affairs will last is anyone’s guess, but if big earnings from energy exports, mining, rare earths and farming soon come on stream, Argentina could be out of the woods within a couple of years.

However, for that to happen the country would have to resist the temptation, which appears to be growing stronger, to go back to the old days when Kirchnerite governments felt it worth their while to stoke inflation because they believed it encouraged gullible voters to think that good times were fast approaching. For a year or so after Milei moved into the Casa Rosada, many both here and abroad tried to believe that large swathes of the population had finally come to the conclusion that severe belt-tightening was necessary because the world did not owe them a living. Presumably, most know this is true but pollsters inform us that an increasing number feel that they at least should be doing better and, as happens everywhere, they blame the government of the day for their personal situation.

Milei may be as clean as a whistle when it comes to corruption, if only because his mind is on higher things, but few think the same of his sister Karina and some other members of the government he has formed. The widespread assumption that Karina and her cronies are on the take has done much to give voters who not that long ago supported the ruling La Libertad Avanza party an excuse either to stay at home on election day or to back some apparently innocuous faction that has no chance of reaching power.

This confronts Milei with what for him is a most unpleasant challenge. Even if he thinks Karina is innocent of all the charges that are being levelled against her, often by notorious kleptocrats, there can be no doubt that her proximity to the very centre of power is harming her brother and that, to reboot his government as he is expected to do after the elections, he would have to ask her, and those closest to her, to step aside. Should he refuse to do this, he would find it hard to strengthen his government by incorporating into it politicians and skilled administrators closely linked to former president Mauricio Macri.

A refusal to dispense with Karina’s political services could also cost him, and therefore the country, the patronage of the United States; Bessent and others are well aware that, to have any chance of succeeding in the extraordinarily ambitious task he has set himself, Milei will need the full backing of a broad-based political coalition rather than the rag-bag collection of cranks and opportunists he attracted when it suddenly became evident that he had a good chance of winning the presidency. Perhaps Trump made this clear to him during their mutual ego-boosting session in the White House. He probably did: the world-bestriding statesman does not like it when lesser beings, or lesser countries, let him down and, as he openly said, he will not treat Argentina kindly if she strays from the path he thinks will take her to greatness.  ​