Presidential Elections in Argentina.
What are the Plans of the Grouping “La Libertad Avanza” and its Candidate Javier Milei?
Background
Over the past seventy years, Argentina has gone from being one of the richest countries in the world to one where half of the population lives in poverty. The candidate for the Argentinian presidency Javier Milei wants to change this trend. To the surprise of many, he emerged as the winner of the presidential "primaries", a special institution in Argentina where presidential candidates present themselves for voting several months before the official ballot.
The election in Argentina is scheduled for October 22, 2023. In addition to the members of Congress, the presidency is also up for election. To prevail in the presidential elections, the winner needs at least 45% of the votes, or a relative majority of 40% of the votes if the second-placed candidate receives at least ten percentage points less. If no candidate reaches the required quorum in the first round, a run-off election between the top two finishers will take place. In this case, this is to take place on 19 November. The president is elected for a five-year term, which would last until December 10, 2027. Voting is compulsory.
Javier Millei
In his self-portrait for the presidential candidacy, Javier Milei introduces himself as follows:
"I was born on October 22, 1970, in the City of Buenos Aires. I am the son of working-class parents, my father was a bus driver, and my mother was a housewife, I grew up in the city and still live there. Even as a child, I knew I wanted to study economics, when I was young, I got involved in football and music, but my true calling was still waiting for me.
After the hyperinflation of 1989, I decided to study economics to understand monetary and social phenomena as they affected Argentina. In 1993, I obtained a bachelor's degree in economics from the University of Belgrano and then a postgraduate course in economic theory at the Institute of Economic and Social Development at the University of Torcuato Di Tella. I am the author of 52 scientific articles, sixteen books, and more than five hundred popular articles in print media."
Taking a look at the academic productions of Javier Milei, one can see that he is a competent economist. Not untypical for Latin America, he had to study the prevailing left-wing Keynesianism during his studies, but soon came to neoclassicism and monetarism of his own accord. From there it was only a small step to the discovery of the Austrian School of Economics. Studying the main authors of the Austrian schools, everything fell before his eyes, so to speak, and he made up his mind to put the teachings of this free-market school into practice. His cultivated eccentricity helps him in this. He is a welcome guest on various television programs and has his show. The fact that he sometimes goes over the top verbally for propaganda purposes should not obscure the fact that the liberal alliance is a serious project whose program is anything but utopian.
Milei and his comrades-in-arms want to put Argentina back on its feet. As leader of the alliance “La Libertad Avanca” (literally: Freedom Advances) he wants to put an end to the misery into which the country has fallen through seven decades of political aberration. In 35 years, Javier Milei explains, he and his allies want to reverse the development that has plunged the country into misery over the past 70 years. The populist and totalitarian governments since the middle of the past century have created a paternalistic state that has restricted private initiative and crushed the middle class. As a result of these policies, now half of the population lives below the poverty line, there has been a drastic decline in private enterprises, and illiteracy rates are rising in a country that was once the leader in literacy not only in Latin America but in the world. Today, according to the alliance in its election manifesto, the public school system has produced graduates who no longer understand texts and those few with skills are emigrating. The Alliance wants to change this trend.
To be able to correctly assess the concrete plans of this freedom movement, one must not rely on the consistently polemical press reports. In the following, we will take up the election manifesto signed by the members of the Congress of "La Libertad Avanza", where the mission, values, and planned measures are presented in detail.
The Alliance's election manifesto
The document of the electoral program of "La Libertad Avanza" begins with the declaration that liberalism is based on full respect for the life plan of others, based on the principle of non-aggression and the defense of the right to life and liberty. The basic institutions are free markets without state intervention, free competition, the division of labor, and human cooperation.
The electoral alliance "La Libertad Avanza" describes itself as a movement that wants to unite people to promote politics in favor of freedom. The alliance calls on Argentines to engage in economic, political, cultural, and social recovery to regain "the prosperous country" that Argentina once was. The alliance aims to create "a modern, reliable, and prosperous society". Argentina should become a modern, fair, and prosperous country "where its inhabitants are proud to be part of the path of growth in the realization of personal and common goals."
The first stage of the reforms is to bring about a drastic reduction in public spending by the state and reforms that include tax cuts, more flexibility in the labor market to create jobs in the private sector, and the opening to international trade. This is to be accompanied by a financial reform that promotes free and deregulated banking as well as currency competition.
For the second phase, the program proposes a pension reform to reduce government spending on public pension payments. The pension reform aims to establish a system that promotes the formation of private capital. Linked to a program of voluntary retirement of civil servants, the goal is minimizing the role of the state. For this purpose, there are also plans to reduce the number of ministries to eight.
In the final phase of the reforms, a far-reaching reform of the health system is to take place. As with the reform of the education system, private initiative and competition are to be strengthened.
The election manifesto of "La Libertad Avanza" describes point by point the measures that would prepare the economic reform of the government of Javier Milei.
The following measures are listed in the election manifesto as the main objectives of "La Libertad Avanza":
Catalog of economic policy measures
1. Elimination of unproductive expenditure by the state.
2. Optimization and downsizing of the state.
3. Incentives for the creation of productive and qualitive jobs.
4. Privatisation of the loss-making public enterprises.
5. Promoting private investment.
6. Expansion of the national road network to connect the different means of transport in order to facilitate the transfer and the exchange of goods at local, provincial and international levels, the installation of new investment projects and the strengthening of existing investments.
7. Creation of ports and airports in neuralgic points of the country as well as improvement of existing ports.
8. Improvement of highways, routes and roads with private investment to promote the exchange of products with the countries of the region, provinces and municipalities.
9. Review of leases for real estate used by the state and replacement of unproductive real estate owned by the state.
10. Promote private investment for the execution of works that promote trade and the regional economy and favor the exchange of products throughout the national territory.
11. In a third stage, consideration to abolish the central bank.
12. Competition for currencies that allow citizens to freely choose the monetary system or the dollarization of the economy.
13. Abolition of exchange rate controls.
14. Abolition of withholding tax on exports and import duties.
15. Unification of the exchange rate.
16. Promotion of a rental law throughout the national territory, which provides for the agreement between the parties on the terms of the deadline, the update, the currency, etc.
Contrary to the media's claim that Milei wanted to abolish the central bank at the beginning of his term, the program of "La Libertad Avanza" states that the abolition of the central bank would only be "considered" in a third stage. In addition, the program states that currency reform is about free currency competition and that the introduction of the dollar as the national currency is only one option among others, which will only be used if the citizens decide to do so.
Tax reform
Like the points mentioned above, the content of the tax reform also contains goals that are by no means utopian and are directly directed at the goal of getting Argentina back on track.
1. Abolition and reduction of taxes in order to promote the development of privately production and to promote the export of goods and services.
2. Abolition of export duties or withholding tax.
3. State funding from a system of royalties and concessions for the exploitation of natural resources by private companies.
Labor market reform
The electoral platform of La Libertad Avanza details the labor reform to be implemented by the government of Javier Milei. It consists of ten points, which the document lists as follows:
1. Promote a new employment contract law that abolishes gratuitous compensation and replaces it with an unemployment insurance system to avoid litigation.
2. Reducing the burden on employers.
3. Promoting the freedom of trade union membership.
4. Promoting the temporary limitation of trade union memberships.
5. Reduction of labor taxes for employees.
6. Restoration of vocational training in the skilled trades through private investment
7. Creation of a public labor market exchange based on private financing.
8. The current law on occupational risks is to be replaced, without retroactive effect, by legislation that corresponds to the international context.
9. Restoration of the hierarchy in public administration.
10. Shrinking the state with the offer of voluntary retirements, early retirements, revisions of contracts for the rental of works and services that cannot explain their raison d'être.
Time will tell how realistic the plans are and whether they can be implemented if “La Libertad Avanza” should come into power. The program of the Argentinean liberty movement is neither “libertarian” nor “anarcho-capitalist”. It is rather a program of dismantling the numerous paralyzing laws and regulations of the administrative-paternalistic state that has suffocated the Argentinean economy. The program is a manifesto in favor of an ideological turnaround. Instead of more government intervention, as has been the political impetus in the past, the program calls for less state and more private initiative.
If “La Libertad Avanza” should succeed and prosperity will come back to Argentina, it would provide an example of a model of governance based on freedom and may serve as an inspiration for many other countries - not only in Latin America. In this way, the upcoming election is relevant beyond Argentina itself.