© Reuters. Argentine President-elect Javier Milei departs the Eisenhower Executive Office Building after meeting with Biden administration staff at the White House complex in Washington, U.S., November 28, 2023. REUTERS/Kevin Lamarque
By Jason Lange and Rodrigo Campos
WASHINGTON (Reuters) – Argentina’s president-elect Javier Milei met on Tuesday with top U.S. officials in Washington and his economic team huddled with IMF officers as he seeks to formulate a plan to reshape the country’s foreign policy and lead its economy out of crisis.
Milei told reporters as he left the White House that his meeting had been “excellent.” He had been scheduled to meet with 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 in brief comments before he was whisked off in his official car.
Milei, a far-right libertarian who takes office on Dec. 10, won 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 U.S. 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 U.S. – the IMF’s largest shareholder – key to any revamp.
His advisers were meeting with officials from the IMF on Tuesday.
Argentina is by far the largest global debtor to the Washington-based lender but its program has ran 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 and IMF officials had a first virtual meeting on Friday, which managing director Kristalina Georgieva called a “very constructive engagement”.
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.
Georgieva, however, told Reuters in an interview that the IMF was “very keen” to support Argentina and the country could be a candidate to receive a relatively small amount of extra financing through a trust for middle-income countries.
