Don't cry for Milei, Argentina: peso plunges after populist tops primary polls

Populist Javier Milei won the Presidential primary poll in Argentina, triggering turmoil in financial markets

Transcript

00:00 Argentina suffered a political earthquake and the response of the markets has been clear.

00:07 Prices have jumped 30 percent in the two days following the victory of the anti-establishment

00:11 populist Javier Mille in last Sunday's primaries. And the peso plunged by 18 percent.

00:19 The question is whether he or anyone can really correct the economy in Argentina is it's going

00:26 to be tough. There are a few bright spots which I'll talk about. But these are structural

00:30 issues. For example public spending represents 40 percent of the country's GDP. That means

00:36 that if we're going to address the debt problem the issue of inflation and the tendency of

00:42 the central bank to print currency it's going to have to cut dramatically subsidies.

00:49 In a country struggling with annual inflation of over 100 percent growing poverty and a

00:53 rapidly depreciating currency the vote has been a response to anger against the political

00:58 class. But does it really represent an ideological shift in Argentina.

01:04 I don't think so much. Millet's surprise victory in the primaries really represents a wholesale

01:12 shift within the Argentine electorate towards the right and towards this sort of view of

01:17 libertarian almost calls himself an anarcho libertarian of sort of a much reduced state

01:26 reflects core popular values of Argentina. I think Argentina remains very much a center

01:31 left country in its orientation.

01:37 The corruption and lack of renewal of the political class has had consequences throughout

01:41 the region. We've seen them in the United States Brazil and much of Latin America.

01:47 Faced with their sense of insecurity people are looking for extreme alternatives.

01:52 There is a sense that there's been no political renovation that politicians are unaccountable

01:58 but also the sense of profound economic insecurity that's driving this in the surveys done in

02:03 Latin America by Vanderbilt University. More than 80 percent of respondents believe that

02:08 half or more of their politicians were corrupt. When people don't trust their politicians

02:13 when they don't trust their institutions they look for extreme answers outside the system.

02:17 [SWOOSH]