South American Politics thread - Page 63

BUENOS AIRES, Argentina (AP) — As soon as Leandro Francisco Diana woke up Tuesday, he reached for his phone like many Argentines on the first business day after the election victory of President-elect Javier Milei.

“I opened my eyes, got my phone and looked for the price of the dollar to see how the country had awakened,” said the 26-year-old Diana, who owns a hardware store with his father in Villa Crespo, a middle-class neighborhood of Buenos Aires.

The exchange rate of the peso with the U.S. dollar has become a widely watched barometer of the nation’s economic health, and is top of mind for millions of Argentines coping with triple-digit inflation. Knowing a further depreciation of the peso will boost the price of consumer goods, they are anxious for signs of what Milei’s victory on Sunday meant for the value of the currency that has tanked against the U.S. dollar in the past year.

Diana, who loves traveling to New York and visited Miami last month, said he had feared he would find on his phone news of a major run on the currency as Argentina emerged from a long weekend. A large depreciation didn’t fully materialize; rather, the dollar’s value in the parallel retail market – popularly known as the “blue dollar” – increased some 13%. He was relieved.

Inflation is running at an annual rate of more than 140%. Uncertainty about prices was rampant this campaign season, with many Argentines stocking up on goods and lining up at gas stations to beat potential post-election price increases. On Tuesday morning, local media were reporting that wholesalers were sharply increasing prices.

Prices are pushed higher by a weaker currency that makes imports more expensive. Milei, an outsider and right-wing populist, has also accused the Central Bank of recklessly printing money in order to fund public spending. Inflation is a chief reason voters elected Milei, who promised drastic measures to curb price hikes including deep public spending cuts and dollarization of the economy.

The morning after his victory, Milei told Radio Mitre that inflation is so entrenched it could take him as much as half his four-year term to fix.

An existing government program forces major supermarket chains to keep prices of certain basic goods roughly one-third below their market value to minimize inflation’s impact on consumers. Still, price increases are common.

On Monday, a national holiday, many clients in one such market stocked up on nonperishables — tuna, water, pasta — in anticipation of a post-election surge, said its manager, Javier, who declined to provide his last name because he was not authorized to speak publicly. The next morning, his market raised prices somewhat for basic goods including milk, butter cheese and pasta.

Milei, a self-described anarcho capitalist, has said he will abolish the Central Bank and has promoted replacing the local currency with the dollar to rein in inflation. He associated his campaign so closely with the idea that supporters at rallies carried giant 100-dollar bills bearing his face.

The government has made access to foreign currency increasingly more stringent, which has caused the parallel market to flourish. While the Central Bank-set price of the dollar is 356 pesos, it is nearly triple that in the main cash exchange, the “blue dollar.”

The key position to appoint is that of economy minister, given Argentina’s gaping budget deficit, depleted dollar reserves, and a $44 billion loan program with the International Monetary Fund that it must continue paying down. Four in 10 Argentines are living in poverty, annual inflation is running at the red-hot rate of 143% and it is likely to continue accelerating, at least in the short term.

The White House said that President Joe Biden spoke with Milei Wednesday about “the strong relationship between the United States and Argentina on economic issues, on regional and multilateral cooperation, and on shared priorities, including advocating for the protection of human rights, addressing food insecurity and investing in clean energy.”

During his victory speech on Sunday night, Milei said that “Argentina’s situation is critical. The changes our country needs are drastic. There is no room for gradualism, no room for lukewarm measures.”

Milei said in an interview on Nov. 21 that any of his ministers who increase spending will be immediately dismissed. When contacted by the AP, a spokesperson declined to comment on appointee plans.

For now, at least, the market seems to be giving Milei the benefit of the doubt. Argentine stocks and sovereign bonds have risen and the peso has lost a bit of its value, but hasn’t taken the plunge many had been expecting.

“The great merit that Milei has is that the market seems to believe him a little more than it seemed to do before the election,” said Javier Timerman, Managing Partner at AdCap Asset Management in New York.

Milei said in a statement that he will not make any of his appointments known until Dec. 10 — although he did reveal a few names during his first few interviews as President-elect, like his picks to lead the justice ministry and a new human capital ministry, people whom political columnist Joaquín Morales Solá wrote in newspaper La Nación on Wednesday are “people with a proven aptitude for public function.”

In order to triumph in the runoff, Milei struck an alliance with center-right former President Mauricio Macri that provided him with the national network needed to bring in votes.

“I talk a lot with him, and he contributes a lot from his experience,” Milei has said of Macri.

Berensztein said, however, that “he used Macri to win the election and now he is enlarging his coalition and Macri is not going to have as much influence as he thought.”

Macri, however, could play a key role in helping Milei fill the lower-ranking roles.

As if he had time to spare, Milei has said he plans to travel to Miami, New York and Israel before he takes power. Still, he does appear to recognize the enormity of the challenge ahead; on the day after his victory, he said had been working through the night without sleep. On Nov. 21, he said in an interview broadcast on YouTube that, after he’s sworn in, he won’t even waste time on the helicopter rides to and from the presidential palace; instead, he will become the world’s first fully operational work-from-home head-of-state.

On November 24 2023 08:51 GoTuNk! wrote:
Argentina is a left-wing-mafia run corrupt shithole, with a 10% MONTHLY inflation rate the government causes by printing pesos to pay its client people that keep them in power. Each argentinian is allowed to purchase a maximum of 200 usd per month. Taxes and regulations make running a legal business borderline impossible. This has been going on for decades, with the exception of 1 term government of Macri, that failed at succesful reforms.

Normal people got sick of that and want change. A stable currency, freer markets, freedom to purchase stuff and freedom to move around. Nebuchad's words salads of "everyone who is not a communist like me is a closet Nazi" are just ridiculous and should not be taken seriously.

BUENOS AIRES, Argentina (AP) — Right-wing populist Javier Milei has been president-elect just four days and already Argentina’s unions and social organizations are vowing pushback and even protests if he makes good on his promises to slash the size of the state and privatize companies.

Milei, who famously campaigned with a revving chainsaw to demonstrate what he would do to public spending, says radical measures are needed to get the South American country’s moribund economy back to life and reduce annual inflation of 140%.

The day after winning the election with a wider than expected margin, 56% to 44%, the libertarian said in a radio interview that “everything that can be in the hands of the private sector will be in the hands of the private sector.” He has said he wants to privatize state-owned media companies and state-run oil and gas firms, and has raised the possibility of privatizing water distribution and train service, as well as ending all public works.

Labor union leaders said Thursday they are paying close attention to what the libertarian president-elect says and what they are hearing is in opposition to their interests.

“We clearly have as a central idea for the country development, with production and the creation of jobs, and it seems that all (Milei’s) affirmations about cuts in the economy, about privatizations and other things do not go down this path,” Héctor Dear, the secretary general of the powerful General Confederation of Labor umbrella organization, said following a meeting with labor leaders.

The most emphatic opposition so far to Milei’s privatization plans came from the head of the Airline Pilots Association, Pablo Biró, who said Wednesday that Milei “will have to literally kill us” to go through with his plan to change the ownership structure of state-owned airline Aerolineas Argentinas.

Most labor leaders, however, have emphasized a wait-and-see attitude, saying they’re on alert but recognize Argentines voted for Milei and will wait for him to implement policies.

WASHINGTON, Nov 28 (Reuters) - Argentina's president-elect Javier Milei met on Tuesday with top U.S. officials in Washington and his economic team huddled with IMF officers as he seeks to formulate a plan to reshape the country's foreign policy and lead its economy out of crisis.

Milei told reporters as he left the White House that his meeting had been "excellent." Among those in attendance were national security adviser Jake Sullivan and Juan Gonzalez, the National Security Council's senior director for the Western Hemisphere.

"We talked about the economic and social conditions in Argentina at the moment," Milei said in brief comments before he was whisked off in his official car. Milei aligned himself with Western values, his office later said.

The White House said Sullivan and Milei had discussed during their meeting the importance of building on a strong bilateral relationship on economic issues and shared priorities such as investment in clean energy and technology.

Milei, a far-right libertarian who takes office on Dec. 10, won election this month pledging radical reforms such as dollarization and "shock" austerity to fix Argentina's economy. Inflation is near 150%, foreign currency reserves are in the red and a recession is looming.

His foreign policy, meanwhile, is unabashedly pro-United States and pro-Israel, with a cooler stance on top trade partners Brazil and China.

"Milei is a unicorn, the leader of a major Latin American economy who is ostentatiously pro-American," said Benjamin Gedan, director of the Latin America program at Washington-based think-tank the Wilson Center.

While Milei's incoming team has looked to moderate earlier criticism of China and Brazil's leftist government, the U.S. trip ahead of his inauguration underscores his priorities.

He has also pledged not to join the China-led BRICS trade group. That's a sharp change in approach from outgoing center-left President Alberto Fernandez, who visited Moscow as Vladimir Putin was readying his invasion of Ukraine in February last year and recently returned from a visit to Beijing.

THE $44 BILLION QUESTION

Milei also needs to get the country's $44 billion deal with the International Monetary Fund back on track, with support from the U.S. - the IMF's largest shareholder - key to any revamp.

IMF Managing Director Kristalina Georgieva said earlier on Tuesday that she would meet Milei at the lender's headquarters, but the meeting did not happen. The IMF did not respond to a request for comment on the missed meeting.

Economic advisors to Milei, Nicolás Posse and Luis Caputo, met with the IMF's No. 2 Gita Gopinath and other fund officials, the fund said separately.

"They discussed the country's complex challenges and plans for urgently strengthening stability and setting the basis for more sustainable growth," the IMF said in a statement.

A U.S. Treasury official confirmed that Milei's advisors met with Treasury officials to discuss the president-elect's economic agenda, but declined to provide details. The Treasury manages the dominant U.S. shareholding in the IMF.

Argentina is by far the largest global debtor to the Washington-based lender but its program has ran off the tracks, and the IMF has been losing patience. The program is used mostly to pay the Fund back for a failed $57 billion program from 2018.

During his campaign Milei vowed to dollarize South America's second-largest economy, though he seems to have put that on the back burner while he looks to overturn a deep fiscal deficit and tamp down inflation. He has stuck, however, to pledges that he will radically change the mandate of the central bank.

The IMF has said in the past that dollarization is not a substitute for sound macroeconomic policy. Lack of an orthodox policy framework under the current administration and a sharp increase in central bank-financed spending in the run-up to the presidential election further hurt the Argentine economy.

Milei and IMF officials had a first virtual meeting on Friday, which Georgieva called a "very constructive engagement".

Milei's office said the meeting with the IMF was part of protocol to explain the incoming team's economic plan and not in search for more financing.

Georgieva, however, told Reuters in an interview that the IMF was "very keen" to support Argentina and the country could be a candidate to receive a relatively small amount of extra financing through a trust for middle-income countries.

BRASILIA, Nov 29 (Reuters) - Brazil "has intensified defensive actions" along its northern border as it monitors a territorial dispute between its neighbors, Guyana and Venezuela, the country's defense ministry said on Wednesday.

"The Ministry of Defense has been monitoring the situation. Defensive actions have been intensified in the northern border region of the country, promoting a greater military presence," it said in a statement.

Brazil's push to move more military resources north comes amid rising tensions between Venezuela and Guyana over an oil-rich region known as the "Esequiba," which constitutes over two thirds of Guyana's total land mass.

Venezuela's claims on the Esequiba, which have been the source of a long-running territorial dispute, were reignited in recent years after Guyana's discovery of oil and gas near the maritime border.

On Dec. 3, Venezuelans will vote in a referendum on "the rights" to the Esequiba. The International Court of Justice (ICJ) is expected to rule on Friday on a request by Guyana that the referendum be called off. Venezuela's government has said it will go ahead no matter what.

Venezuela protested an oil tender announced by Guyana in September, arguing that the offshore areas are subject to dispute and the companies awarded the fields will not have the rights to explore them.

The Venezuelan communications ministry did not immediately respond to a request for comment on Brazil's actions.

THE HAGUE/CARACAS, Dec 1 (Reuters) - Judges at the World Court on Friday ordered Venezuela to refrain from taking any action that would alter the situation on the ground in a potentially oil-rich territory that is the subject of a border dispute with Guyana, which controls the area.

The court did not expressly forbid Venezuela from going ahead with a referendum on Sunday over its rights to the region around the Esequibo river, as Guyana has requested.

But judges at the International Court of Justice (ICJ) - as the World Court is formally known - ruled that any move to alter the status quo should be stopped.

"The court observes that the situation that currently prevails in the territory in dispute is that Guyana administers and exercises control over that area," presiding judge Joan Donoghue said.

"Venezuela must refrain from taking any action which would modify that situation," she added.

Guyana's President Irfaan Ali hailed the court's ruling, while Venezuelan Vice-President Delcy Rodriguez said it was a victory for her country.

"As the court has made clear, Venezuela is prohibited from annexing or trespassing upon Guyanese territory or taking any other actions – regardless of the outcome of its referendum on December 3 – that would alter the status quo in which Guyana administers and controls the Esequibo region," Ali said in a statement.

The five-question referendum will go ahead, Rodriguez said on state television, adding that Venezuela wants a negotiated solution to the dispute.

The vote "will ratify that our rights over the Guayana Esequiba are irrevocable and unquestionable," Rodriguez said.

The vote about the 160,000 square km (61,776 square mile) territory, which is largely thick jungle, has caused anxiety in Guyana, with the government urging citizens to keep calm.

Venezuela reactivated its claim on the area in recent years after the discovery of offshore oil and gas. The maritime border between the two countries is also in dispute.

Venezuelan President Nicolas Maduro has vociferously encouraged voters to approve the referendum, in what political analysts say is a test of government support before planned 2024 presidential elections.

Venezuela's dispute with Guyana may have an impact on the elections, said security analyst Rocio San Miguel of the Citizen Watchdog on Security, Defense and the Armed Forces.

"If the elections represent a threat to Maduro's power, he'll suspend them through this route," she said, calling the dispute "a perfect distraction tactic."

She said that while Venezuela has significantly more military power than Guyana, it would not be able to stand up to Guyana's allies, which include the United States.

The referendum, which is "consultative" and can be approved by simple majority, asks Venezuelans, among other things, if they agree to incorporate the region and create a state called Guayana Esequiba.

Political analysts expect voters to approve the proposal, given the lack of any 'no' campaign and the likelihood that voters who are opposed will stay home.

Friday's ruling is the latest development in the larger border dispute. The ICJ said in April it had jurisdiction over the case, but a final ruling could be years away.

On December 04 2023 17:06 WombaT wrote:
Is this actually disputed territory in a complex sense with legitimate claims either side, or a Venezuelan territory grab? Profoundly ignorant on this particular topic.