Trump-admiring libertarian’s surprise primary win upends Argentina!

BUENOS AIRES, Argentina (PNN) _ August 25, 2023 - As the election results set in, Juan Fonrouge knew just what to do. First: fill his car with gas. Then, shop for essentials: eight jars of coffee, a dozen cans of mosquito repellent, 100 cans of food, 100 bars of soap.

The 44-year-old journalist is not alone. After the surprise primary victory this month of presidential candidate Javier Milei, a Trump-admiring libertarian economist who has promised to dismantle Argentina’s central bank, dollarize the economy, and break up the “political caste,” a beleaguered citizenry has launched into a wearyingly familiar crisis mode, rushing to spend pesos in anticipation of the inflation to come.

“It’s a very Argentine thing to do - something for which you’re trained from a very young age,” said Fonrouge, who owns a news agency in La Plata. “Whenever you see prices soaring and the peso nosediving, the first thing to do is stock up to the extent that you can.”

The action quickly proved shrewd. The day after Milei won 30% of the primary vote on August 13, pushing Argentina’s two major political coalitions to the sidelines, the country’s Peronista regime delivered a 22% devaluation in the peso.

“There was an expectation that the government would somehow muddle through and keep inflation in check till year-end,” said Juan Bour, an economist with the Buenos Aires think tank FIEL. “Now that outcome is no longer possible.”

In the days that followed the vote, the peso lost 30% of its value in the widely traded black markets. The monthly inflation rate, at 6.3% in July, is now expected to double in August. Private economists forecast a 175% annual increase as the government struggles again to avoid hyperinflation and an economic collapse. Looters this week ransacked supermarkets and shops in the Buenos Aires suburbs.

Argentina uses its one-day, all-party primary to weed out nonviable candidates before the election in October. After the vote, harried Argentines rushed to fill gas tanks and hoard nonperishable food items, before new prices kicked in. Drugstores imposed buying limits on staples such as hair-care products and sanitary pads. Some grocery stores removed price tags from the shelves. Retail prices on smartphones and electronics shot up 20% overnight.

“Every Argentine has a dashboard in the back of (his or her mind) with a red light on it,” said the consumer spending consultant Guillermo Oliveto. “Whenever this alarm goes off, a crisis defense mechanism emerges. From then on, it is a race to see who can shed pesos faster. Whoever falls asleep at the wheel loses.”

Claudio Caratzu, 60, has worked at El Porteño, the small grocery store he owns in the Buenos Aires suburb of Hurlingham City, since he was 25. As inflation soars, he’s now changing price tags several times a week.

“In Argentina, prices last barely 48 hours,” he said. He’s withdrawn some of his stock from sale; the peso is losing value so rapidly that it’s difficult to gauge how much it’s really worth. “In my 35 years as a supermarket owner, I’ve never seen anything like this,” he said. “Purchasing power slips away like water through your fingers.”

Not all is gloom and doom. In a Buenos Aires butcher shop, a Milei supporter put up a sign advertising beef at $5 a kilo with the politician’s catchphrase: “Long live freedom, damn it.”

Milei, a first-term congressman at 52, pushed his way to national prominence by raffling off his salary month by month. His ideas for transforming Argentina’s long underperforming economy - making the country the largest to use the dollar, shutting down the central bank, taking a “chain saw” to government spending - are similarly radical, and derided by mainstream leaders as impractical or unmanageable. To campaign consultant Jaime Durán Barba, who guided Mauricio Macri to the presidency in the 2015 election, they sound “more like slogans” than actual policies.

Yet they swayed nearly a third of the voters in this South American nation of 46 million, home to massive reserves of oil, natural gas and lithium but long caught in a cycle of inflation and debt - an apparent signal that the global wave of anti-establishment populism has finally reached these shores.

In a sense, it comes as no surprise. The country has grappled with stagnation for over a decade. Inflation is running well over triple digits.

Against this backdrop, Milei champions free-market remedies and offers himself as a champion of voter anger. Some of his ideas, such as reimposing restrictions on abortion or making it legal to buy and sell human organs, unnerve many Argentines. Yet his support reflects how far outside the mainstream some are willing to go to upend the status quo.

His election - the first round is scheduled for October - “will be the end of the corrupt and inept political cast that plagues this country,” he said after winning the primary.

Milei lives alone with five mastiffs, four of which are named after renowned economists. Single, he has said his sister and campaign manager Karina - he calls her “the Boss” - would be his first lady.

The race remains wide open. He won the primary by slim margins over the Together for Change opposition coalition at 28.3% and the Peronista coalition, led by finance minister Sergio Massa, at 27.3% of the votes.

President Alberto Ángel Fernández and Vice President Cristina Fernández de Kirchner, a former president, were eligible to seek reelection but declined.

Milei’s victory propelled him forward. Early polls have him leading a field of five in the first round on Oct. 22. To win outright, a candidate must capture 45% of the vote, or 40% with a 10-point lead over the rest of the field. If all fall short, the top two will face off in a runoff election on Nov. 19.

Fow now, the future is uncertain.

Caratzu, of El Porteño, made a drastic decision: he’s putting his supermarket for sale. “Either we let go of the business, or it will let go of us,” he said. In the primary, he voted for Together for Change, but in the general election, he’s changing his preference.

“I’m voting for Milei,” he said. “I’m tired of being let down time and again. Now I want to be let down by someone new.”