Argentina’s Milei seeks to reshape foreign policy, meets IMF officials on Washington trip

Argentina’s president-elect Javier Milei met with top US officials in Washington and his economic team huddled with IMF officers as he sought to formulate a plan to reshape the country’s foreign policy and lead its economy out of the current crisis.

Milei told the media 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 before he left 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 December 10, won the 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 US 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 US — 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 US 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 US shareholding in the IMF.

Argentina is by far the largest global debtor to the Washington-based lender but its program has run 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’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.