Argentina on Sunday chose a new president and a new course, pivoting away from decades of Peronist policy domestically and, if new president-elect Javier Milei sticks to his campaign rhetoric, toward a new neighborhood policy that might jolt Latin America and a new foreign policy in the Middle East and toward China.  

The results of the presidential election runoff were not surprising, knowing the depth of the anger of the electorate at the economic crisis in the country. Inflation has hit 140 percent and poverty affects 40 percent of the population, while a $44 billion debt program with the International Monetary Fund did not even scratch the surface of solving the problems of Argentina. 

People wanted and demanded change, even if it came in the form of a right-wing populist and self-described “anarcho-capitalist,” who even brandished a chainsaw during the election campaign, vowing to cut the government down to size. An economist and former TV personality, Milei won with 56 percent of the vote, compared to the 44 percent of his opponent, the current Economy Minister Sergio Massa. He promised Argentines that there is “no room for lukewarm measures” and vowed to purge the government of corrupt establishment politicians. 

His platform is very radical even for Argentines, who are willing to forgive his style for the sake of change and a new beginning. He has said he will dollarize the economy, abandoning the national currency, the peso; eliminate the central bank; shut down the ministries of education and health; privatize the state-controlled energy firm YPF, after making it better to get a good price; and privatize the state-owned media, which he described as “a covert ministry of propaganda” as it gave him negative coverage during the campaign. Sound familiar? 

The incoming Argentine president is an admirer of former American President Donald Trump and some see a resemblance between them, including the mop of hair. He is even referred to as the “Trump of Argentina.” He is also a friend of former Brazilian President Jair Bolsonaro and both congratulated him, with Trump telling Milei: “You will make Argentina great again.” Bolsonaro said: “You represent a lot for Brazil.” 

However, Argentina’s relationships with its two largest trading partners, Brazil and China, seem to be heading into uncharted waters with Milei’s presidency. During his campaign, he attacked Brazilian President Luiz Inacio Lula da Silva, calling him an “angry communist” and a “socialist with a totalitarian vocation,” prompting a Brazilian official to demand an apology before any talks between the two leaders can start. 

The president-elect softened his position on some domestic measures in the last days of the campaign, such as retreating from his vow to abolish the ministries of education and health, signaling that reality might sink in and a more pragmatic approach might be contemplated, especially as his party does not control the Congress and he cannot pass any of his promised measures without its approval.  

The question is though, how will he handle his relationship with Brazil, or any of his Latin American neighbors, especially since some of them did not hide their disappointment at his election? 

The biggest change from Argentina’s previous policies is predicted to be in his China policy. The president-elect advocated during the campaign breaking off relations with Beijing in favor of ties with “the civilized side of the world,” meaning the West. His Middle East policy might also bring a sea change to Argentina’s traditional policy for the region.  

China is the second-largest trading partner of Argentina and their relationship has warmed recently, with Beijing investing billions of dollars in projects in different sectors of the economy. China even helped the country avoid default by offering a $6.5 billion loan to help it make its debt payments one month before the elections, according to Bloomberg.  

The growing relationship between Argentina and China was a matter of concern in Washington, especially after Buenos Aires joined the Belt and Road Initiative in 2022 and accepted the invitation to join BRICS next year.  

The Chinese have expanded their influence in Latin America with the billions invested in the region through its Belt and Road Initiative. Seven countries in South America were participating in the initiative as of 2022, with projects ranging from the construction of infrastructure to energy, challenging the US in its backyard.  

According to World Economic Forum figures, trade between China and Latin America grew 26-fold between 2000 and 2020, increasing from $12 billion to $315 billion. It is expected to double by 2035, reaching more than $700 billion, which is about the same as the current trade between China and the US.  

According to the House Foreign Affairs Committee website on China’s influence in South America, in 2021 alone, Chinese state-owned companies “funded $11.3 billion worth of projects in South American countries.” But the committee adds that the “US still provides more foreign direct investment in Argentina than any other country, totaling $131.6 billion in the past decade.”

Other Chinese projects in Argentina have added to the anxiety in Washington, such as talks on setting up a port in the southern Tierra del Fuego province, as well as the satellite tracking station in Patagonia that Reuters has referred to as a Chinese “military-run space station” and a “black box.” 

Washington was not a mere spectator in all of this. It has continued to seek close relations with Argentina to counter China’s influence. Argentine President Alberto Fernandez visited Washington earlier this year and, after a visit to Argentina, Colombia and Brazil by NASA Administrator Bill Nelson, these countries all signed NASA’s Artemis Accords. Nelson was clear when he talked about the motive, as he noted “all of these countries have had entreaties from the Chinese government.” And, with Argentina in particular, he said the US wanted to “keep the ties, the information, flowing between our two countries.” 

Milei might try to decouple from China, as he promised, but experts echo what a Chinese spokesman said after the elections — that such a move would be “a serious mistake” on Argentina’s part.  

Both the US and China today need Argentina for a precious resource: lithium, which they need because it is essential for electric cars and the energy transition. Argentina has one of the world’s largest lithium reserves and it needs trading partners to get out of its economic crisis. Milei might soon learn that it is better for Argentina to keep all its options open.  

Milei’s platform is very radical even for Argentines, who are willing to forgive his style for the sake of change.

Dr. Amal Mudallali

Meanwhile, Argentina’s Middle East policy appears to be heading for a sharp turn toward Israel. Milei reportedly said that he plans to travel to the US and Israel before he takes office on Dec. 10. American and Israeli media outlets have written about his close ties to rabbis in Miami and New York, as well as his spiritual attachment to and his admiration of Israel.  

He has reportedly considered converting to Judaism and has supported Israel’s right to self-defense during its attack on Gaza. He has often waved Israeli flags at his campaign rallies. He has previously said he wants to move the Argentine Embassy in Israel from Tel Aviv to Jerusalem, following in Trump’s footsteps, according to Politico. 

With Argentina’s turn to the right, the great power competition between China and the US is reminding people that America never likes to be challenged in its backyard. During their last debate, Republican presidential hopefuls spoke about reviving the Monroe Doctrine, which holds that any intervention in the political affairs of the Americas by foreign powers is a potentially hostile act. The Dallas Morning News warned that “reviving the Monroe doctrine is a dangerous idea” and cautioned that the Republican candidates’ posturing “will push Latin America into China’s arms.” Countering China’s influence is a bipartisan issue in Washington and Latin America will find that out soon.  

Source : Arab News

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