Not long ago on Sunday, Argentina welcomed a new ** - Milley, known as the "Trump of South America". At the same time, the new ** was also sworn in, but the original cabinet of 18 departments is now only half, which is a cause for concern.
According to the explanation of the Argentine **office on social media**, the first **order signed by Milley after taking office was to cut the **department in half. Eight departments were originally planned to be eliminated, but the Ministry of Health was unable to merge with other departments that had been laid off, so it was eventually changed to nine. Milley expressed similar sentiment in his inaugural speech, pledging to reduce public spending by 5% of GDP and to take a "shock" to address the current economic crisis and take action for the country's future.
The so-called "shock**" is not new in history. Many countries went through this phase in the early days of Soviet independence, and the result was often misery. Russia's current ** Putin even drove a taxi part-time to make ends meet. However, the situation in Argentina is not exactly the same as the shock in Latin America and Eastern Europe**. As a special economy independent of the developed and underdeveloped countries and Japan, Argentina faces more complex problems.
Milley is known as a liberal economist who advocates the abolition of the Argentine peso and the central bank and the full implementation of "dollarization". Doesn't that sound familiar?That's right, there was a similar practice in Menem** more than thirty years ago, and this ** is Milley's idol. The two met in 2019, when the left-wing Fernández had just been elected, and the political climate in Argentina was not good for the right. However, after Menem heard Milley praise him as the best Argentine had ever seen, he invited Milley to his home and said to him, "You have to be" that changed Milley's fate.
Although there were differences in the economic ideas of the Milley and Menem periods, the latter's policy was to exchange the peso and the dollar at a 1:1 exchange rate in order to control inflation and currency depreciation. Although it looked good at first, the peso suddenly became valuable, and Argentines no longer had to worry about a decrease in purchasing power due to the exchange rate**, and they could spend lavishly. However, austerity has deactivated the economy, with a large number of businesses closing, and the overvalued peso hitting Argentina's exports hard. In addition, privatization reforms have further led to the control of important enterprises in Argentina by foreign capital. Eventually, Argentina fell into a deep crisis, and Menem** was forced to terminate the reform process, losing two years later**.
Today, Argentina faces a similar situation as it did back then: with the lowest economic growth, inflation in the triple digits, and $44 billion in debt to the International Monetary Fund**. Faced with such a dilemma, Milley once again drew on his previous experience and put forward a further proposition, that is, to directly abolish the peso and the central bank, and fully implement dollarization. However, economists such as Giacomini have questioned this. They argue that the reason Milley's approach doesn't work is that times have changed. Compared to the United States of Menem's time, the United States today faces economic problems of its own and is no longer the only superpower. Washington has also begun to emphasize the role of economic regulation, and privatization is no longer the optimal solution. In addition, cuts in public spending could lead to the elimination of public benefits such as fuel subsidies, which in turn could exacerbate the living conditions of the people at the bottom and even trigger mass riots.
It is worth mentioning that Milley's far-right party, Free Forward, is the third largest party in parliament, but even with other right-wing allies, it cannot achieve a majority, which makes it difficult for any major adjustment bill to be approved in Congress. For a person with a weak political foundation, it is still unknown whether it can withstand the anger of the people.
In general, the policy of cutting down the department adopted by the Argentine ** Milley after taking office has attracted widespread attention from the society. His economic advocacy and admiration for "shock" are similar to those of Menem**, but in the context of today's times, such an approach could have more serious consequences. Argentina's current economic problems are serious, the political background is weak, and how to solve the economic crisis and deal with popular opposition will be a difficult task. What are your thoughts and suggestions on this?Please leave a comment to participate in the discussion.