With his win, ‘The Madman’ of Argentina causes anxiety across the region

The possibility of Javier Milei winning the Argentinian presidential election was a scenario a few regional leaders were ready for. But Mr. Milei swept the polls with a record margin.

The last Sunday night was quite nervy in Buenos Aires. It was edgy in Brasilia, too. The possibility of Javier Milei winning the Argentinian presidential election was a scenario a few regional leaders were ready for. But Mr. Milei, who is known as ‘El Loco’ (The Madman), swept the polls with a record margin. The prospect of Mr. Milei, who has promised to deploy “shock doctrine” by privatizing all state-owned firms and replacing the peso with the dollar, being in charge of the second biggest South American economy is a stuff of nightmares for the region which still suffers from the trauma of past economic turmoil. Mr. Milei’s foul-mouthed tirade against the leftist leaders, especially President Lula of Brazil, during the campaign has been another ominous sign.

The worrying signals have continued since Sunday. Mr. Milei has already invited former Brazilian President Jair Bolsonaro, another far-right demagogue, to his inauguration on December 10, creating an awkward situation for Mr. Lula. To add fuel to the fire, Diana Mondino, who could be the next Foreign Minister of Argentina, said on Tuesday that their government will not “promote relations with Brazil and China”. When asked by a reporter, if Argentina would encourage trade with both countries, Ms. Mondino blurted: “We will stop interacting with the governments of Brazil and China.”

It was a blunt warning to Argentina’s two biggest trading partners, especially Brazil under Mr. Lula who is a big defender of the Southern Common Market (Mercosur).

Politically, Mr. Lula and Mr. Milei are poles apart. The Brazilian President defends the role of the state in economic growth and poverty alleviation, while Mr. Milei preaches “anarcho-capitalism” – an economy without any state regulation. On the issue of regional cooperation too, Mr. Lula and Mr. Milei don’t see eye to eye. The Argentinian seems more interested in enhancing a network with former U.S. President Donald Trump and his far-right clones in the region. “Clearly, Trump-like politics is gaining ground in South America and it will strengthen Mr. Bolsonaro in Brazil and similar movements in Colombia, Chile and elsewhere. The extreme right-wing has gained an extra post with Mr. Milei’s victory. If Mr. Milei pursues what he said during the campaign, it will create problems for Mercosur and for Brazil, and the centre-left project of regional integration will also be weakened significantly,” says Rafael Ioris, Professor of Latin American history and politics at the University of Denver, Colorado.

The signs of an ideological shift in the region have already been there. When Mr. Lula assumed office in January this year, nine of the 12 countries in South America were led by left or centre-left Presidents. After Mr. Milei’s inauguration, South America will have four right-wing governments. In the past four years, Argentina, Ecuador and Uruguay have flipped from left to right. “Things have got more complicated for Argentina and for the centre-left and left in the region, especially for Brazil. And possibly even for the BRICS as well because it is quite possible that Mr. Milei may not join the group. That will not weaken the BRICS but it may help the narrative in the U.S. and Latin American media that the BRICS group is not so good for the global south,” says Professor Ioris, who has done extensive work on Brazil.

Contrary to common belief, the rivalry between Brazil and Argentina exists only on the football pitch. Economically and politically, the two neighbours are joined at the hip. Though there have been governments of opposing ideologies in both countries, none of the leaders has ever tried to rock the boat. But Mr. Milei’s radical proposals like the dollarisation of the economy, scrapping of the Central Bank and exit from Mercosur will profoundly affect the bloc which also comprises Brazil, Uruguay and Paraguay.

Brazil has been patient with Mr. Milei so far. Mr. Lula has not responded to any of his provocations. Brasilia definitely wants to give diplomacy a chance to deal with Mr. Milei. “The bilateral relationship is of such dimension and such depth that it must be capable of resisting any change in government from one country or another,” Brazil’s Ambassador to Argentina, Julio Bitelli, said a day after the election results caused an earthquake across the region.