On December 10, marking the 40th anniversary of the end of military dictatorship in Argentina, Javier Milei, a libertarian economist from the far-right "Libertad Avanza" party, was officially sworn in as President of Argentina. During his election campaign, Milei made several bold promises, including abolishing the central bank, replacing the Argentine currency with the US dollar, significantly reducing public spending, and supporting the sale of human organs.
Similar to former US President Donald Trump, Milei is a climate change skeptic and has criticized climate change as a lie. In foreign affairs, he advocated for Argentina to align closely with the United States and strengthen ties with Israel, even threatening to sever ties with Argentina's largest trading partners, Brazil and China.
Milei's inauguration ceremony attracted far-right politicians from around the world, including Hungarian Prime Minister Viktor Orban, former Brazilian President Jair Bolsonaro, and the leader of Spain's far-right Vox party, Santiago Abascal. Trump also intended to attend but withdrew due to logistical issues.
In his inauguration speech, Milei reiterated his commitment to implementing drastic spending cuts, stating that Argentina is "out of money." As a first step in reducing expenses, he announced a 50% reduction in the number of departments in the Argentine central government.
However, in his inaugural address, Milei did not mention abolishing the central bank or dollarization. His newly appointed Minister of Economy is not a right-wing figure but a former president of the Argentine Central Bank who had negotiated with the International Monetary Fund.
Milei's stance on foreign affairs also softened. During his inauguration, he met with Chinese representatives and emphasized the new Argentine government's high regard for Argentina-China relations, committing to continue adhering to the One-China policy.
Despite his campaign's unconventional approach, Milei's chosen ministers are not fringe figures. The nine ministers, including the Minister of Health, are either technical personnel or former government officials.
On Tuesday, local time, the new Argentine government will announce new economic policies, with significant spending cuts and privatization reforms as key focuses. The government plans to cut public spending by 5% of GDP.
According to Argentine media, the new government initially aimed to abolish nearly 3,000 regulations and rules to promote economic liberalization. However, plans have been adjusted, and discussions are ongoing.
On Monday, the first day of Milei's presidency, Argentina's main stock index rose nearly 4%.
In his inauguration speech, Milei softened his stance on several issues. He did not mention dollarization or abolishing the central bank. The new Central Bank president appointed by Milei, Santiago Bausili, is not expected to close the bank and plans to rebuild its independence, according to Brazilian independent media. The Argentine government has not commented on these reports.
Regardless of media accuracy regarding Bausili, Milei's omission of abolishing the central bank in his speech suggests that the new government will at least postpone plans for dollarization and abolishing the central bank.
Milei also made concessions on climate change. Although the new central government departments do not include an Environment Ministry, Milei appointed experienced climate diplomat Marcia Levaggi as Argentina's top diplomat for climate change affairs, attending the ongoing United Nations Climate Conference in Dubai.
Levaggi confirmed that Argentina would remain in the Paris Climate Agreement and fulfill its commitment to achieve net-zero emissions by 2050.
In foreign affairs, Milei softened his stance towards China after confirming his election as President of Argentina and extended greetings to the Chinese people.
Meanwhile, at the end of last month, Diana Mondino, who had not yet assumed the role of Argentine Foreign Minister, stated in an interview that joining the BRICS would not benefit Argentina and that Argentina would not join the group. In August this year, the BRICS decided to invite six countries, including Argentina, to become formal members of the BRICS cooperation mechanism starting January 1 next year.
On Tuesday, Chinese Foreign Ministry spokesperson Mao Ning revealed that during Milei's presidential inauguration ceremony, he met with Chinese representatives and stressed the new Argentine government's high regard for Argentina-China relations, reaffirming Argentina's commitment to the One-China policy and expressing willingness to further promote exchanges and cooperation in various fields between the two countries.
China is Argentina's second-largest trading partner and the largest market for agricultural exports. Argentina's central bank reserves include $18 billion as part of a currency swap agreement with the People's Bank of China, and Argentina is also a significant destination for Chinese lithium industry investments.
Despite the need to adjust new government policies based on actual circumstances, Milei will face another major challenge in implementing new policies: his "Libertad Avanza" party does not hold a majority in the Argentine Congress.
In Argentina's Chamber of Deputies, which has 257 seats, "Libertad Avanza" holds only 39 seats; in the Senate, with 72 seats, the party has just eight seats. This means that to implement any major reforms, Milei will need to constantly struggle and negotiate with Congress.
