???? ?? Milei and How He Sees the World

What drives Argentina's extravagant president, what does he want to achieve and what impact could this have on South America and the world?

Rarely has a leader from Latin America stirred up as much global attention and interest as Argentina’s President Javier Milei. His recent speech at the UN General Assembly drew a level of attention reminiscent of past appearances by other Latin American icons from the opposite end of the ideological spectrum, such as Cuba’s Fidel Castro or Venezuela’s Hugo Chávez.

Just one month after taking office, Milei already seized the spotlight at the World Economic Forum in Davos in January, aiming to teach the world a lesson. A key point of his now famous (or to some infamous) speech was his updated definition of socialism. According to Milei, governments no longer need to directly control the means of production to exert total control over the economy and people’s lives. His tirades against "woke" paternalism, overregulation, and excessive bureaucracy struck a chord in many parts of the Western world—though mostly met with rejection.

Milei appears to feel called upon to improve the world, far beyond Argentina’s borders. No other Argentine president has traveled abroad as much in the early months of his term as Milei has. His trips, mostly to the United States and Europe, were less about meeting heads of state and more about promoting his personal mission. Meetings with government officials were the exception, while Milei often connected with representatives of the international right-wing movement in America, Brazil, and Spain, or prayed at the Western Wall in Israel.

Quite obviously Milei does not travel to promote Argentina and lure investments into his country - he mainly travels to advocate for himself and his cause. Argentina's disastrous history of crisis, which allowed an "anti-political" outsider like him to be catapulted to the presidency in the first place, seems merely to serve as a launchpad for Milei’s broader goal of liberating the world from socialism and defeating the enemies of freedom. "Today, I am the most significant politician in the world, alongside Donald Trump," Milei recently declared. So much for his motivations and missionary zeal as arguably the most flamboyant head of state today. But what, in practical terms, is Milei doing in foreign policy and international economic relations?

Milei’s Foreign Policy: Strong Anchoring in the West

Whenever it comes to Argentina's place in the world, Milei emphasizes his country's clear alignment with the West. By far, the most important allies are the United States and Israel, as well as all the "liberal democracies" of the world. Argentina has abandoned its traditional neutrality, Milei affirmed at the UN Assembly. Argentina stands with Ukraine in its fight against Russian aggression. Volodymyr Zelensky attended Milei’s inauguration, yet even so did Viktor Orbán. One of the first actions of the Milei government was to withdraw from entering the BRICS bloc, led by China, which includes Brazil, Russia, India, and South Africa. Instead, the process of joining the OECD, the club of wealthy industrial nations, was resumed. Milei also wants Argentina to become a global partner of NATO.

At the United Nations, however, Argentina refused to support the recently approved "Pact for the Future." Milei calls the UN's 2030 Agenda a supranational, socialist program that violates states sovereignty and individual rights and only exacerbates poverty and inequality. He also criticizes the "socialist agenda" of the Davos World Economic Forum for bringing "only misery to the world."

Ideology and Pragmatism

However, as ideologically charged as Milei’s speeches are, his government often acts pragmatically. Milei’s personal relationship with Luiz Inácio Lula da Silva, the president of neighboring Brazil, is frosty. They speak about each other with mutual disdain rather than talk to each other. On the international stage, Lula and Milei avoid each other, and there have been no reciprocal visits yet. But at the same time, the governments of both countries continue business as usual. After all, Brazil is by far Argentina’s most important trading partner. When Argentina had to withdraw its diplomatic personnel from Venezuela due to rising conflict with dictator Nicolás Maduro, Brasília even took over the administration of the Argentine embassy in Caracas and the care of Venezuelan opposition members who had fled there.

Milei's foreign policy takes a clear ideological stance in the conflict with Maduro. Among global critics of Maduro, Milei wields the sharpest sword, while Brazil's Lula still tries to mediate. However, the more neutral governments in Brazil and Colombia are finding it increasingly difficult not to take a tougher stance against Maduro. This indirectly gives Milei’s radical position more weight. The sharp polarization with Maduro also benefits Milei domestically, where his favourite political rival, Cristina Kirchner, once again dominates the opposition stage. Kirchner and Maduro serve as deterrents for many Argentinians who may doubt Milei but definitely do not want a return to Kirchnerism—or an even darker future following Venezuela's example.

Milei’s foreign friends are found on the other extreme of the ideological spectrum, such as the American Conservative Political Action Conference (CPAC), Spain's Vox, Hungary’s Viktor Orbán, the Bolsonaro family in Brazil, and Israel’s Netanyahu. His relationship with President Nayib Bukele in El Salvador is particularly close, with Argentina’s Security Minister Patricia Bullrich reportedly keen to learn from Bukele’s strategies in fighting drug and gang crime.

Ambivalent Stance on Mercosur: Between Rejection and Hope for Investment

Tensions between Argentina and Brazil could hamper the development of Mercosur and the negotiations on the EU-Mercosur agreement. Milei demonstratively skipped the first Mercosur summit of his presidency, instead accepting an invitation from Jair Bolsonaro to attend a conference of far-right figures in Brazil at the same time. Milei's positions on Mercosur and its foreign relations are contradictory. Ideologically, Milei rejects Mercosur as a protectionist fortress and aims for a unilateral opening of the economy, following Chile's model. This would break up Mercosur in its current form. On the other hand, Milei sees the EU-Mercosur Agreement as an opportunity for immediate trade liberalization and advocates for a speedy conclusion, much like Lula. Rather, the biggest obstacles to a final conclusion of the agreement lie in Europe.

From a German and European perspective, Argentina is primarily of interest as a supplier of raw materials like copper and lithium and as a potential energy partner. Under Milei, mining and fracking for shale oil and gas are expected to flourish. Argentina also has vast potential for green hydrogen, but it lags behind other South American countries like Chile, Uruguay, and especially Brazil in establishing an institutional framework for this emerging industry. There is considerable activity in the bilateral startup scene, supported by the German government. Milei seems determined to transform Argentina into a global paradise for artificial intelligence. His frequent meetings with technology giants such as Elon Musk, Mark Zuckerberg, and Google CEO Sundar Pichai suggest as much.

Changing Policy on China

Milei’s stance on China appears to be evolving. Initially, he said he would not strike deals with communists. But in a recent TV interview, he sounded quite different. China is “a very interesting trading partner because it makes no demands,” Milei said. Additionally, it’s Argentina’s second-largest partner in foreign trade. “China has pleasantly surprised me,” Milei added, noting that the country had easily extended a currency swap fostering Argentina's external reserves. “The only thing they ask for is not to be bothered,” the president said. This contrasts with the demands, for example, that the International Monetary Fund (IMF) makes for providing new loans. Although Milei’s austerity policies are more radical than what the IMF would ever demand, Argentina continues to chart its own course in monetary policy.

The IMF is apparently unhappy with Argentina's continued control over the official exchange rate, which is still managed by the government-dominated central bank. The IMF and numerous independent economic experts tend to recommend a greater devaluation of the peso and an early lifting of foreign exchange market restrictions (the "cepo"). However, Milei seems to have other plans. He intends to float the peso only when it is possible to do so without risking a new wave of devaluation and inflation. At the same time, Milei is practically forcing Argentines to liquidate their dollar reserves by stopping the printing of pesos. A "currency competition," as Milei calls it, is intended to gradually make the peso disappear in an "endogenous process." At the same time, Milei remains true to his long-term goal of shutting down the Argentine central bank. So far Argentina's own ways.

What if Milei succeeds? The possible global impact of Argentina's experiment

But what can Milei, the president of a widely impoverished, chronically bankrupt country, actually achieve on the global stage? “If Milei succeeds with his approach, it will change the world,” enthused economist Philipp Bagus, who already published an entire book on "The Milei Era - Argentina’s New Path." a few weeks ago. Bagus knows Milei from academic exchanges about the “Austrian School” of economics. Bagus, however, has never been to Argentina.

What does “if Milei succeeds” mean anyway? Bagus and many other liberals in universities or foreign editorial offices see success simply in the fact that a liberal-libertarian outsider like Milei could even become president of a country and push forward the harshest market-radical reforms at a breakneck pace. But so far, the drastic measures have mostly caused suffering and worsened social hardship.

Whether the world can learn anything from the Milei experiment – or, in any case, what it can learn – will likely be decided in Argentina first and foremost. The economic and social situation remains precarious, and the political resistance to the president, whose party holds only a weak minority in parliament, is growing significantly. After more than a dozen “foreign tours,” Milei is now primarily occupied with defending his position in his own country. That will be challenging enough.