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Javier Milei, the President of Argentina, speaks at the final day of the conservative conference on February 24, 2024.
Hard Numbers: Argentina in the money, China-Libya drones plot in Canada, Recording Gaza’s casualties, Arms spending peaks
0.2: Argentina is in the black for the first time since 2008. The South American country is starting Q2 with a 0.2% fiscal surplus in quarterly revenues. President Javier Milei took a victory lap and promised to continue his fiscal austerity program, causing bond valuations to jump.
2: Two former UN employees in Montreal were charged with participating in a conspiracy to sell Chinese military equipment to Libya, including large drones capable of carrying multiple missiles. The men are accused of violating sanctions related to the Libyan civil war (2014-2020) between 2018 and 2021. One of the suspects was arrested Tuesday, but the other remains at large.
80,000: The US State Department’s annual human rights assessment found that nearly 80,000 people in Gaza have been killed or injured during the Israeli offensive, amounting to some 3% of the population.
2.4 trillion: The Stockholm International Peace Research Institute found that global military expenditures reached an all-time high of $2.4 trillion, a year-over-year increase of 6.8%. The United States alone made up 37% of that spending, and with China spending another 12%, the two leading military powers cumulatively spent just under half of the world’s entire military budget.
Argentine presidential candidate Javier Milei of La Libertad Avanza coalition holds a placard depicting a dollar bill with his face on it, during a campaign rally in La Plata, Buenos Aires, Argentina, September 12, 2023.
Chainsaw cuts path to new Argentina-IMF deal
Argentine President Javier Milei’s dramatic spending cuts have provoked protests at home, but they’ve won him plaudits from abroad. On Thursday, an IMF delegation lands in Buenos Aires, reportedly to restart a $44 billion bailout program for the crisis-wracked country.
The eccentric, “anarcho-capitalist” Milei, who at times campaigned wielding a chainsaw, promised to slash spending to address an economic crisis that has driven inflation above 150% and plunged almost half of the population into poverty.
Since taking office, he’s halved the number of government ministries, devalued the currency by more than 50%, and deregulated dozens of industries. He’s now asking Congress for another 600 changes that would filet government regulations, expand presidential powers, and crack down on protests.
The IMF, which suspended its lending to Argentina last August after the previous government missed key reform targets, says his actions to date are “bold.” A fresh deal would unlock about $3 billion more in assistance, and not a moment too soon: Argentina owes the fund roughly that amount over the next two months.
The bigger question: Milei’s party has few seats in a largely hostile Congress – his power comes from a popular mandate for change. Keeping that mandate – which he will need to continue his one-man radical reform program – will require him to show, soon, that the economic shock and pain he is inflicting on society is worth it. The clock is ticking.
Demonstrators protest against Argentina's new President Javier Milei's adjustment policy, outside the National Congress in Buenos Aires, Argentina December 21, 2023. The banner reads, "For Sale".
Extreme economic makeover: Milei edition
Ten days after his inauguration, President Javier Milei set out to turn Argentina from a nanny state to a bastion of free market capitalism, announcing a sweeping set of economic reforms that uproot major sectors of the economy and have enraged the country’s powerful labor unions.
The decrees will privatize state-owned companies and strike down regulations in the housing market, export controls, the food industry, and other sectors to encourage competition. Worker benefits, from severance packages to maternity leave, will also be cut.
Thousands of protesters poured onto the streets of Buenos Aires on Thursday in response to the reforms. They were met with a massive show of force from the police, and no signs of backtracking from Milei, who said the participants “suffer from Stockholm syndrome … smitten with the [economic] model that impoverishes them” as he announced that further austerity measures were on the way.
Argentina’s constitution gives presidents the authority to act with authority on most areas of policy during times of crisis, which Milei argues fits the current moment since he devalued the country's currency by 50% last week.
But implementing these reforms will be an uphill battle. The reforms can’t stand if either house of Congress votes against them, which is likely given Milei’s lack of a majority and the opposition in the streets. Milei likely included so much in the decrees with the knowledge that much of it would be struck down – and in the hopes that if he threw enough at the wall, something would stick.
Volodymyr Zelensky
Ukraine faces threat from Western flank
While visiting Buenos Aires on Sunday for the inauguration of Argentina’s new president Javier Milei, Ukrainian President Volodymyr Zelensky was able to buttonhole Hungarian Prime Minister Viktor Orban.
Cameras caught an unimpressed-looking Zelensky sharing his thoughts with a defensive-looking Orban. We don’t know what he said – Zelensky said later that it was a “frank” exchange – but we can guess that the Ukrainian was calling Orban out for acting on behalf of Russian President Vladimir Putin, who is seeking to gain through politics what he has so far failed to gain on the battlefield: Ukraine’s submission.
Twenty months after Russian tanks crossed the border in a failed thunder run for Kyiv, the war is at a stalemate. Ukraine’s improbably successful resistance stopped an outright Russian victory, but a counteroffensive this year failed to make the hoped-for gains, and now Putin’s friends in Western capitals are seeking to capitalize on fatigue with the war to stop the Western arms that allow Ukraine to fight.
Orban, Putin’s best European ally, is threatening to block Ukraine’s accession to the European Union and is arguing against a crucial European aid package for Ukraine at a summit this week, although France’s Emmanuel Macron will try to get him onside. Meanwhile, Orban’s representatives in Washington are meeting with far-right Republicans who want to prevent the United States from approving $60 billion in military aid for Zelensky’s fighters.
Quid pro quo
Republicans are split on the question of aid to Ukraine but united in a desire to stop migrants from crossing into the United States, so President Joe Biden is trying to appease them by putting more resources into securing the southern border.
The White House is wrangling with Senate Republicans to seek a compromise, but the holidays are coming, and they need to make a deal before they all leave for the year on Friday.
“Biden is under tremendous pressure to approve an additional aid package,” says Clayton Allen, Eurasia Group director for the United States. Such a deal would likely help him with voters later, said Allen, since border security “has proven a perennial issue for his reelection chances.”
To stop the increasing number of migrants, Biden is reportedly offering to expel migrants without processing their asylum claims using Title 42, a pandemic-era measure that Donald Trump used to turn away migrants on public health grounds.
If GOP leaders in the Senate can make a deal with Biden before the holiday break, it may allow Speaker Mike Johnson to sell it to enough of his members to get it through the House. On Tuesday, he said that border security was the “hill to die on.” Johnston will likely not be able to convince Freedom Caucus members — the people who are meeting with Orban’s representatives — but he may be able to put together enough votes to get it passed, as he did to avert a government shutdown last month.
Money on the line
Biden’s job may be easier than it looks because congressmen will be motivated by a desire for economic activity in their districts, says Christopher Sands, director of the Wilson Center’s Canada Institute. “All these wars do have a tendency to benefit us in that sense because it's such a big military production that'll help a lot of congressional districts.”
When the horse trading in Washington is over, it seems likely that Ukraine will get money to keep fighting Putin, but the politics is not getting easier as the war grinds on.
“Whether Orban is the mastermind or Putin, we've seen over the last couple of years that the authoritarian countries … have been going for our great weaknesses in democracies, which is free debate,” says Sands. Spreading fake news or propaganda is “the best way to weaken the support for Ukraine.”
Canadian Conservatives change sides
Until recently, all Canadian parties shared a consensus on support for Ukraine. More than a million Canadians trace their roots to that country, so there are good electoral reasons to support Zelensky, but the Conservatives under Pierre Poilievre have quietly started voting against aid to Ukraine. In the run-up to the next general election, Poilievre wants to avoid losing any conservative support to the far-right People’s Party of Canada, which has always opposed helping Ukraine, like populists around the world.
“I think what he understands is that he has to ameliorate the right flank,” says Canadian pollster Nick Nanos. “He's doing the political calculus that if he can pick up three points out of the PPC, that could put him into majority territory.”
The Conservative votes in Canada can’t stop aid to Ukraine, but it is nonetheless a sign that Zelensky’s diplomatic challenges are getting tougher. If the Russians can win in Western capitals, and Ukraine is left to its fate on the battlefield without support from NATO countries, Putin will be able to conquer its neighbor, and the West will be weakened.
“A collapsing USA now obviously has very significant near-term military implications for Ukraine,” says Allen. “It cuts off supplies of artillery and air defense, which are essential to Ukraine's offensive and defensive capabilities.”
But it also raises questions about the durability of US security commitments and guarantees with American allies. “A failure to approve additional Ukraine aid now,” says Allen, “will diminish US influence and leverage in negotiations and interactions moving forward.”
Zelenksy has used skillful diplomacy and media savvy to build global support for his country’s struggle against Russian imperialism, but time looks to be on Putin’s side.
Argentine President-elect Javier Milei
Is Milei moderating? Argentina’s president-elect takes power
After running a scorching campaign that promised to turn Argentina into a Utopia of free-market capitalism by any means necessary, President-elect Javier Milei is cooling things down a bit ahead of his inauguration on Sunday.
Milei won last month’s election in a landslide by blasting the economic policies of the outgoing Peronist government, promising to slash government spending, cut taxes, eliminate most ministries, close the central bank, and dollarize Argentina’s economy.
But now he is aligning himself closer to the Peronist party he derided and hiring mainstream figures to help him shape his economic agenda, conceding that he can’t topple the central bank overnight. He is also moderating his promises to cut social spending, as powerful labor unions and working class movements line up against him.
Milei comes to power during the worst economic crisis in decades, with two out of five Argentines living in poverty and inflation up 147% since last year. But he’ll also be governing without a majority in Congress. His last-minute moves to moderate are at least partly due to the realization that he’ll have to win friends and influence people if he wants to make progress on his domestic policy promises.
Argentina's economy will get a lot worse before it gets better
Ian Bremmer shares his insights on global politics this week on World In :60.
Will Israel and Hamas finally reach a hostage deal?
We keep hearing about this deal. We're now saying it's imminent, but imminent doesn't mean announced. And, you know, things can go wrong at the last minute still, where the details make it seem like this is going to happen. And what that means is not only we're going to see at least a few dozen Israeli women and children released and some Palestinians, also mostly women, it looks like, released as well from Israel, but that you'll get a temporary ceasefire in three days, five days, and maybe that leads to more diplomacy. It doesn't lead to Israel no longer attacking Hamas. Let's be clear. It's not an actual ceasefire, but it creates more space for people to be talking, especially talking with the Israelis, major leaders in the region. That is something we'll be watching very closely.
What does Javier Milei’s election mean for the future of Argentina?
Well look, it means that the Argentines were absolutely sick of the country falling apart and they were voting between a guy who said he was going to dollarized and get rid of a lot of the government and someone who represented economic policies that have driven the country into a ditch, 140% inflation and massive poverty and, you know, nobody investing and close to a default from the IMF. So, I mean, all of this is a disaster. But Milei, he doesn't have a single governor. He won't have a majority in Congress. He doesn't have an economic team. And his economic plans are mostly vaporware. So, I mean, this is not a country that has the ability to screw around for an awful lot. It's not like the United States in Afghanistan or Iraq. You make mistakes. But the economy is still great. Argentina is not Afghanistan, but they are in serious, serious trouble. And so, yeah, the economy is going to get a lot worse before it gets better. And we'll watch that. It's very expensive to dollarize by the way. And so that means you got to have to print a lot more. I suspect that this is going to be a lot more hardship on the backs of a lot of Argentines. Okay.
Happy Thanksgiving! What world leader has the most to be thankful for this holiday season?
What a hard thing. I mean, all leaders should be thankful because, you know, in principle, they're doing a hell of a lot better because they're representing their people and they should appreciate that and they should take that seriously. And a lot of them don't. But I guess I probably say Modi. Narendra Modi in India, because I mean, he is a very popular leader of the world's largest democracy, 1.4 billion people, the most populous country in the world, is pretty democratic. It's growing economically. It is a leader of the Global South, but it's also with increasingly stable relations with the United States, with Japan and with Europe. And Modi has accomplished a lot of that. So he has a lot to be thankful for. And he is not going anywhere anytime soon. So there's that.
Argentine presidential candidate Javier Milei gestures during the closing event of his electoral campaign ahead of the November 19 runoff election, in Cordoba, Argentina, November 16, 2023.
Milei’s win raises pressure for completion of EU-Latin America trade deal
Javier Milei’s victory in Argentina’s presidential election could rapidly accelerate negotiations for a trade treaty between the Mercosur trade bloc and the EU. Milei, a self-declared anarcho-capitalist, vowed to pull Argentina from Mercosur altogether if he won. His victory raises questions about the future of the bloc and talks surrounding the treaty.
A trade pact between the bloc — Argentina, Brazil, Paraguay, and Uruguay — and the EU has been in the works for years, and the two sides reached an agreement in principle in 2019. But talks have been stalled ever since thanks to disagreements over environmental commitments pushed by the EU.
The Milei effect: There now appears to be a mad dash to complete an agreement before Argentina inaugurates Milei, a far-right libertarian who’s drawn comparisons to former US President Donald Trump. Diplomats involved in the negotiations told the Financial Times they’re hoping to wrap things up by early December.
“The talks are moving ahead fast,” a Brazilian official taking part in the negotiations told Reuters.
As a climate-change denier, the Argentine president-elect could complicate negotiations on environmentally related matters. While it would be tough to finalize the deal before his inauguration, this might be the incentive all parties need to get to the finish line. We’ll be watching to see whether they can reach a deal before Milei takes office on Dec. 10.
Wall Street Journal reporter Evan Gershkovich stands behind a glass wall of an enclosure for defendants before a court hearing
Hard Numbers: Gershkovich to remain in Russian prison, Myanmar refugee camp airstrike, Micheal Jordan pumpkin breaks records, fall of the Argentine peso
9: Evan Gershkovich, the Wall Street Journal reporter detained by Russian authorities earlier this year, lost his appeal on Tuesday and will remain in a Russian prison until at least Nov. 30. At that point, he will have spent 9 months behind bars for allegations of espionage. Espionage trials in Russia can be lengthy, and the country’s Foreign Ministry says it will not consider a prisoner swap until after a verdict is reached.
29: In Myanmar, an artillery strike on a refugee camp near the Chinese border killed 29 people. Myanmar has been embroiled in a civil war since a military coup in 2021, but several ethnic insurgents, including the Kachin Independence Organization – which controlled the area where the strike occurred – have been fighting for self-rule for decades.
2,749: A new record has been set for the world's largest pumpkin. Named Michael Jordan because it resembled a basketball early on, the large orange squash weighed in at a whopping 2,749 pounds. It was planted in April by a horticultural teacher in Minnesota, who put $15,000 into the pumpkin’s care to win himself $30,000 in prize money.
17: Javier Milei, the frontrunner in Argentina’s election race who seeks to dollarize Argentina’s economy, continued his attacks on the peso this week, discouraging Argentinians from holding any investments in the currency. As a result, the peso has fallen 17% since Monday, further driving up prices amid the country’s worst financial crisis in two decades.