Argentina's president-elect Javier Milei plans to move quickly on his plan re-engineering the country's economy after his win on 19 November.
Milei, a right-wing congressman, defeated finance minister Sergio Massa 56-44pc in a run-off race most polls had forecast within the margin of error. Milei won in 20 of the country's 23 provinces, including some with more than 70pc, as well as the capital city, Buenos Aires.
The president-elect, who defines himself as a libertarian, said during his victory speech Sunday night there was no time to waste ahead of his 10 December inauguration.
"If we do not move quickly, we will head into the worst crisis in our history," he said. "Getting Argentina back on its feet and moving ahead is not a task for the meek, cowards or the corrupt."
He began meeting with potential cabinet members almost immediately after the results were announced. The official transition with outgoing president Alberto Fernandez began 20 November.
Milei will face a daunting challenge when he takes office and will have to deal with an opposition-controlled congress, but he could be helped by changes already underway in the country that should create opportunities for economic growth.
The first task will be addressing inflation and depreciation of the peso. Inflation averaged 120pc on an annual basis in the first 10 months of this year, and was an 8.2pc monthly rate in October. The peso had lost more than 60pc of its value and the country's economy is forecast to contract by 2.5pc this year.
Milei's recipe for change involves a complete economic overhaul, starting with replacing the peso with the US dollar and later eliminating the central bank.
He plans on shrinking the size of the state, eliminating subsidies for basic services, such as electricity and urban transportation, and privatizing state-run companies, like oil company YPF and energy company Enarsa. In the case of YPF, he has said that several units, like those focused on lithium, renewable energy and technology, would be spun off quickly.
Several of the changes, such as reining in subsidies, can be accomplished with executive orders. The big-ticket items, particularly eliminating the central bank, will require negotiations with congress, but Milei's party holds very few seats in either chamber of congress.
Pipelines, end of drought, will help
Several prior developments should help Milei's efforts toward better economic performance.
Fernandez's government built pipeline infrastructure to monetize the Vaca Muerta shale formation, which holds 308 tcf of natural gas. It has allowed the country to eliminate dependence on energy imports, which were above $5bn last year. The government forecasts an energy surplus of $3.8bn in 2024 and $18bn by 2030.
It began exporting oil and gas to neighboring Chile this year after a 17-year hiatus. Energy exports should help reverse the trade deficit, which was $7.4bn in the first 10 months of the year.
A historic drought in the past few years is over, which should allow for recovery of corn and oilseed crops. The soybean harvest for 2024 is forecast at 50mn t, more than double the drought-stricken 2023 harvest.
Production of lithium, a critical metal for the energy transition, is also ramping up in the country. Argentina now has installed capacity to produce 35,000 t/yr of lithium and should be at 50,000 t in 2025. It has an estimated 20mn t of lithium resources, the second highest in the world.
