In inaugural speech, new president prepares nation for painful shock adjustment

BUENOS AIRES (AP):

It wasn’t the most uplifting of inaugural addresses. Rather, Argentina’s newly empowered President Javier Milei presented figures to lay bare the scope of the nation’s economic “emergency”, and sought to prepare the public for a shock adjustment with drastic public spending cuts.

Milei said in his address to thousands of supporters in the capital, Buenos Aires, that the country doesn’t have time to consider other alternatives.

“We don’t have margin for sterile discussions. Our country demands action, and immediate action,” he said. “The political class left the country at the brink of its biggest crisis in history. We don’t desire the hard decisions that will need to be made in coming weeks, but lamentably, they didn’t leave us any option.”

South America’s second-largest economy is suffering a 143 per cent annual inflation, the currency has plunged, and four in 10 Argentines are impoverished. The nation has a yawning fiscal deficit, a trade deficit of US$43 billion, plus a daunting US$45-billion debt to the International Monetary Fund, with US$10.6 billion due to the multilateral and private creditors by April.

“There’s no money,” is Milei’s common refrain. He repeated it on Sunday to explain why a gradualist approach to the situation, which would require financing, was not an option.

But he promised the adjustment would almost entirely affect the state rather than the private sector, and that it represented the first step towards regaining prosperity.

“We know that in the short term the situation will worsen, but soon we will see the fruits of our effort, having created the base for solid and sustainable growth,” he said.

Milei, a 53-year old economist, rose to fame on television with profanity-laden tirades against what he called the political caste. He parlayed his popularity into a congressional seat and then, just as swiftly, into a presidential run. The overwhelming victory of the self-declared “anarcho-capitalist” in the August primaries sent shock waves through the political landscape and upended the race.

Argentines disillusioned with the economic status quo proved receptive to an outsider’s outlandish ideas to remedy their woes and transform the nation. He won the election’s November 19 second round decisively — and sent packing the Peronist political force that dominated Argentina for decades. Still, he is likely to encounter fierce opposition from the Peronist movement’s lawmakers and the unions it controls, whose members have said they refuse to lose wages.

Earlier on Sunday, Milei was sworn in inside the National Congress building, and outgoing President Alberto Fernández placed the presidential sash upon him. Some of the assembled lawmakers chanted “Liberty!”

Afterwards, he broke tradition by delivering his inaugural address not to assembled lawmakers, but to his supporters gathered outside — with his back turned to the legislature. He blamed the outgoing government for putting Argentina on the path towards hyperinflation while the economy stagnated, saying the political class “has ruined our lives”.