Javier Milei sworn in as Argentina's president, pledges bold reforms amid economic challenges

Javier Milei assumed the role of Argentina’s president on Sunday, as the country steels itself for harsh spending cuts and economic reforms aimed at curbing rampant inflation.

The 53-year-old libertarian economist, committed to decisive actions, pledged to address the longstanding issues of overspending, debt, and convoluted currency controls in Latin America’s third-largest economy.

Taking the presidential oath, Milei declared, “I swear to God and country… to carry out with loyalty and patriotism the position of president of the Argentine nation.”

Thousands of supporters gathered outside Congress, expressing their enthusiasm with the country’s flag and echoing Milei’s rallying cry of “freedom!”

The diverse gathering of world leaders at the event included Ukraine’s President Volodymyr Zelenskyy, Hungary’s Prime Minister Viktor Orban, and Chile’s leftist leader Gabriel Boric, among others.

Milei’s inauguration caps a meteoric rise for the former television panelist who entered politics only two years ago.

His rants against the “thieving” establishment fired up voters and drew comparisons to leaders like Bolsonaro and former US president Donald Trump.

With his deliberately disheveled mop of hair and rock star persona, he would wave a powered-up chainsaw at political rallies, vowing to slash public spending and a bloated cabinet.

He vowed to “dynamite” the central bank and replace the ailing peso with the US dollar.

Inflation has hit almost 140 percent year-on-year and 40 percent of the population lives in poverty.

“Like many of his predecessors, Milei will take office with the warning lights all flashing red,” said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.

But for Argentines, the future is mired in uncertainty over what exactly their new president plans to do.

With few lawmakers from his party in Congress the hard reality of politics has set in, and Milei has softened many of his stances and allied with politicians he previously insulted, incorporating some into his cabinet.

Talk of shutting the Central Bank, dollarization and welfare cuts has dissipated.

“Milei 2.0 will still face an uphill climb, but he appears to have adopted a more pragmatic agenda and sought the advice of more experienced political figures,” said Gedan.

However, with central bank reserves in the red and no credit line Milei is facing “bare cupboards,” added the analyst.

“His rescue strategy, including a rapid downsizing of the government, will be tough to swallow for a long-suffering population. Either way, the next few months will almost certainly see social and political turmoil.”

Among the questions hanging over Argentines’ heads in the coming days will be whether Milei will devaluate the strictly controlled peso and loosen the currency controls which have birthed a multitude of dollar exchanges.

Economist Victor Beker of the University of Belgrano said the first “litmus test” for Milei will be if he actually halts the money printing by the Central Bank that he has so derided, which funds much of the government’s spending.

Milei has warned that it could take between 18 and 24 months to bring the country’s inflation under control, warning of months of “stagflation” — rising prices coupled with economic stagnation.

For 2023, the International Monetary Fund (IMF) has projected a contraction of 2.5 percent in Argentine GDP.

With inputs from AFP