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Election winner Milei immediately announces privatizations
November 20, 2023, 8:13 p.m
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Argentina’s new President Milei seems to want to take action immediately after the elections. He directly announces the privatization of state property. He doesn’t want to stop at companies or broadcasting. Shares of Argentine companies react to the announcement.
The day after his election victory, the future Argentine president announced the privatization of state-owned companies and public broadcasting. “Everything that can be in the hands of the private sector will be in the hands of the private sector,” the ultra-liberal politician said on the radio. Among other things, Milei wants to privatize the state energy company YPF, public television and radio and the official news agency Télam. “If we don’t make rapid progress with structural changes, we’ll be heading straight for the worst crisis in our history,” Milei had already laid out his political route.
The 53-year-old clearly won the runoff election against government candidate Sergio Massa on Sunday with a lead of around eleven percentage points. The economist wants to significantly reduce the role of the state and leave many areas to the free market. Among other things, he plans to introduce the US dollar as legal tender, abolish the central bank and many ministries and cut social spending. However, for several of his planned reforms he would need a parliamentary majority, which he does not have.
“No one with such extreme views on economic issues has ever been elected president of a South American country,” said economist Mark Weisbrot of the US research institute Center for Economic and Policy Research. “It barely recognizes a legitimate role for government in some of the most important policy areas that most people see as necessary for a democratic, humane and stable society.”
Stocks are going through the roof
“The first announcements of Milei’s policy will please markets, with aggressive fiscal consolidation and the removal of foreign exchange and capital controls being the biggest priorities,” said portfolio manager at Swiss asset manager Vontobel, Thierry Larose. In fact, the financial markets reacted positively to the election result. The shares of Argentine companies on the New York Stock Exchange have now risen by 23 percent, and government bonds by 6 percent.
Milei will take up his new position on December 10th. Above all, the frustration of many Argentines over the ongoing crisis and anger at the political establishment may have helped the outsider win the election.