Milei Sets Aside Dollarization Plan Due to Politics
Argentine President Javier Milei blamed politics for being unable to fulfill his campaign promise of dollarizing the country’s economy, suggesting that such a move could have led to his impeachment.Â
“It’s not that it wouldn’t have been unfeasible to do that in technical terms, but we did infer that in political terms, politics was going to play dirty,” Milei said during an interview with Bloomberg last week.
During the interview, Milei spoke of the challenges he faces as the leader of the South American country, including a “bankrupt” central bank and a “fiscal, monetary, and currency disaster of extravagant proportions.” Milei’s initial plan to overturn the crisis was to anchor Argentina’s economic future to the U.S. dollar.
“We had a strategy to dollarize. It was to take the assets of the Central Bank against the national government, transfer those securities to the market, and get dollars,” Milei explained. He claimed that this approach would have “worked properly” because when his term began, Argentine securities were valued at an attractive $18, significantly lower than their current value of $54.Â
“It would have been a highly successful approach,” the president added. “But given the structure of Argentina’s political system and considering how intellectually dishonest politicians and economists are in Argentina, if we had actually engaged in that sort of transaction at market prices…they would have probably accused us of shady business and would have sent us to prison.”Â
Milei’s presidential campaign was marked by his support for a series of free market reforms to revitalize Argentina’s economy, proposing bold measures such as “dynamiting” the central bank and dollarizing the economy.
Dollarization, the process of adopting the U.S. dollar as a country’s national currency, has historically helped mitigate the impacts of economic or financial crises, often generated by governments excessively printing money to finance high rates of public spending. By replacing a rapidly depreciating local currency with the U.S. dollar, countries can stabilize the economy, instill credibility, and curtail inflation.
To date, t
Article from Latest
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.