Milei excites rich people desperate to end Argentina’s crisis

There is a tango very beloved by Argentines titled Balada para un loco, which maintains that madness is a way of enjoying a life in freedom.

The election of Javier Milei as the next president of Argentina struck that chord. As a magnate from Buenos Aires put it: only a madman can do what is necessary to move the country forward.

The phrase sums up the mood among business leaders after the libertarian’s victory by a larger than expected margin in Sunday’s runoff, when the majority of Argentines opted for a drastic new path after decades of economic failure despite fear to the unknown.

From the technology sector to real estate and agriculture, Argentine executives rejoiced at Milei’s victory after four years of byzantine policies that only aggravated the country’s chronic problems and economic crisis.

“It is very good news for Argentina”said Eduardo Elsztain, president of IRSA Inversiones y Representaciones SA, who runs an empire of shopping centers, agricultural land, offices and gold mines. “Argentines are willing to change, it is a good sign”.

The strong market rally on Monday confirmed the extent to which Milei’s victory quickly changed business expectations, although the country’s dire outlook, which includes inflation exceeding 140%, lack of access to international credit and a plummeting economy, They are still very much alive after the elections.

Both bonds and stocks registered strong increases and some values ​​soared by up to 40%. That investment euphoria not seen in the country in years contrasts with economists’ warnings that Milei’s economic proposals — including dollarization and closing the central bank — could catapult Argentina into greater volatility or even hyperinflation.

However, Elsztain downplayed the concerns, saying Argentina’s biggest challenge is not its currency, but controlling the government’s fiscal waste.

“The market reaction… is only the first day, but it should be continuous“he said in an interview on Monday.

Marcos Galperín, CEO of the e-commerce giant MercadoLibre Inc. and a recurring critic of the outgoing Peronist administration of President Alberto Fernández, euphemistically celebrated Milei’s electoral victory with an image on X, the social network formerly known as Twitter, of birds breaking chains. He only added one word: “free”.

For his part, Martín Migoya, founder and CEO of the software multinational Globant Inc.—another Argentine unicorn listed in the United States—congratulated Milei. “Freedom, hard work, a lot of humility and long-term thinking, to together make the country that we Argentines dream of and can build.“, wrote.

And Cristiano Rattazzi, heir to the Italian Agnelli family that founded the automotive giant Fiat, declared to the newspaper La Nación that “between the madman and the fox, luckily Argentina voted for the madman.”

Billionaire Marcelo Claure, a former SoftBank Group Corp. executive with extensive business in Latin America, and even Tesla Inc. founder Elon Musk also celebrated Milei’s victory.

“Now the hard work begins to take Argentina back to what it was 100 years ago”Rattazzi said, according to La Nación.

Initial reaction

The initial enthusiasm for Milei’s victory among Argentina’s business elite, sparked by his subdued victory speech on Sunday night, contrasts with the doubts and divisions observed until just a few days ago.

At various events held last week at the traditional Alvear Hotel in Buenos Aires, business leaders questioned Milei and his rival in the second round, Economy Minister Sergio Massa, about the details of their stabilization plans. Preferences were divided, with Massa seen as a less disruptive option, but almost none of the businessmen expected the libertarian candidate to beat his Peronist rival by almost 12 percentage points.

At the same time, Argentine businessmen continue to want to see more details of the plans of the libertarian, who came to the presidency by upsetting Argentina’s two main traditional coalitions. And it’s also true that morale and expectations among groups that depend on government business were much worse Sunday night, given the uncertainty generated by Milei’s policies, according to a person with regular contact with the business elite. from Buenos Aires.

Wall Street and Washington leaders will likely get their first chance to meet with Milei as president-elect — and hopefully get details of his policies — when he takes what he calls a “spiritual” trip to New York and Miami in the coming days. before the change of command on December 10.

But in any case, Milei will need all the support he can get, as his main economic policies will likely face strong resistance in a divided Congress, where his party only controls a fraction of the seats. The deep spending cuts and shock therapy that Milei has promised to reduce the government’s chronic fiscal deficit could also possibly generate tensions with social groups and unions.