Milei's Presidency: Implications For Argentina, El Salvador, And Bitcoin Adoption

On November 19, 2023, Argentine voters elected Javier Gerardo Milei, an Austrian economist known for his candid and unconventional style, as their new president. He ran on a platform promising substantial reforms: cutting spending, reducing government intervention, addressing inflation, and eliminating the central bank.

Milei's path to victory was unexpected. In the general elections, he secured second place with 30% of the vote, trailing Sergio Massa of the Peronist establishment, who garnered 37%. Patricia Bullrich, former Minister of Security under President Macri's administration, obtained 24%. These results forced Balotaje, or a run-off election between Massa and Milei.

On the run-off election night, it became apparent early on that Massa's camp wouldn't prevail, leading him to concede before official results were released, extending well-wishes to Milei.

During his victory speech, Milei conveyed several key messages:

- He emphasized the start of Argentina's reconstruction and thanked pivotal figures, including poll watchers from his party and PRO, an establishment coalition party. He also thanked former President Macri and his election opponent, Patricia Bullrich, acknowledging their contribution to bringing about change.

- Milei declared an end to what he called the "Argentinian Decadence," denouncing a system favoring a privileged few and vowing to revisit the principles of liberty, Alberdi's ideas (an Argentine Libertarian), and the vision of Argentina's founding fathers.

- He invited all Argentinians to join this new transformational project in embracing liberty, highlighting unity over differences while acknowledging resistance from those entrenched in the existing system. His message to his opponents was striking, as he warned them that under a Milei administration, “everything within the law, and nothing outside the law.”

- Asserting the need for immediate and drastic changes, he warned of an impending crisis if the country doesn't rapidly address critical issues like inflation, poverty, security, and unemployment. He emphasized that his administration could not afford gradualism, lukewarm implementations, and half-measures and that changes must be swift.

- Milei extended a global commitment to democracy, free markets, and cooperation with other nations for a better world, culminating in his passionate rallying cry: "Viva la libertad, Carajo!"—Long live liberty, dammit!

While Milei's victory signifies a milestone for Latin America in advancing post-partisan politics, which Salvadoran President Bukele leads this movement, and potentially influencing Bitcoin adoption, some caution is warranted. Milei himself is not a Bitcoiner, but as an Austrian economist, he understands the need for Bitcoin to counteract central bank and Keynesian policies. In fact, one of his main policy planks is to dollarize the Argentinian economy to more closely reflect the reality of what is already happening on the ground. The dollarization of the country alone is one of the most anti-Bitcoin measures he could take; however, this is where idealism meets reality, and Milei must do what is best for Argentina.

Milei’s alliance with the conservative and center-right party, PRO and Patricia Bullrich, might require compromises for political support. His challenges echo Macri's, including the need to move towards market-friendly policies, address corruption allegations, and avoid the perception of favoritism to the Argentinian elite.

Despite Milei's limited support in Congress, his need to garner votes may lead to political compromises, possibly deviating from his intended policies. El Salvador’s President, Bukele, was in a similar situation when he was blocked from running in his own party and then chose to run with a political rival GANA. While Bukele did not capitulate to GANA and eventually garnered enough votes in Congress, it is still uncertain how Milei’s situation will impact his policies.

It's crucial for Bitcoiners to exercise patience and manage expectations, as Milei did not run on Bitcoin as a main economic policy. While Milei aims to address deep-seated issues in Argentina, his primary focus might not align with Bitcoiners’s vision of Bitcoin adoption. Argentina, with its size and resources, has the potential to achieve greatness, but Milei recognizes this, and he will likely proceed cautiously in some areas and be swift in others, and not all will be to the satisfaction of Bitcoiners.

As My First Bitcoin’s founder, John Dennehy, put it best, “There's been a lot of cheerleading on here because Argentina’s president-elect, Javier Milei, has said positive things about Bitcoin. If we judge politicians not based on what they have done but on what they promised during their campaign, then we have learned nothing. Don't trust, verify.”

This is a guest post by Jaime Garcia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.