Argentina’s Milei will need time to scrap peso if he wins, advisers say

BUENOS AIRES, Aug 29 (Reuters) – Javier Milei, Argentina’s radical presidential front-runner, will need time to carry out his campaign pledges of scrapping the peso currency and cutting taxes on grains should he win the election, advisers told Reuters, adding that he could avoid congressional hurdles by using executive decrees.

Ramiro Marra, part of Milei’s inner circle and his party’s candidate for mayor of Buenos Aires city, said Milei – who pulled off a shock win in a primary election this month – would dollarize the economy within two years and aim to remove taxes on the huge farm sector if he was elected.

He added, however, that voters for Milei, a self-described libertarian and political outsider who made a name for himself as a ‘shock jock’ television pundit, should be realistic that his proposals would take time.

“It has to be understood that administration proposals do not happen by magic,” Marra told Reuters in an interview at the office of his investment firm Bull Market Brokers in Buenos Aires, adding that whoever wins the Oct. 22 election – or more likely a November run-off – faced “hard months” ahead.

Juan Napoli, also running for a Senate seat with Milei’s party, agreed time would be needed to lay the groundwork for reforms.

Marra said dollarization would take from nine months to two years to make a reality, while he declined to give a timeframe on getting rid of taxes on grain exports, the country’s main economic driver, though said doing so was “our aim”.

Ramiro Marra, candidate for mayor of Buenos Aires and part of the inner circle of Argentina’s radical presidential front-runner Javier Milei, listens to Milei talking to journalists, in Buenos Aires, Argentina August 24, 2023. REUTERS/Agustin Marcarian Acquire Licensing Rights

“We believe that we must take our foot off the agricultural sector,” he said, citing “inefficiencies from the creation of direct and indirect taxes” on the sector. He cited Chile’s more free-market model as an inspiration.

Milei’s proposals have resonated with voters buckling under 113% annual inflation and weak economic growth, with many angry at the traditional political forces: the left-leaning ruling Peronist bloc and the conservative Together for Change coalition.

Poverty affects nearly four-in-10 people, the benchmark interest rate has shot up to 118%, foreign currency reserves have run dry and tight capital controls have spawned an array of parallel currency exchange markets.

Milei got 30% of the vote in an open primary this month, ahead of the Peronist coalition on 27% and the conservative opposition, which got 28%. The presidential candidates for the two blocs will be Economy Minister Sergio Massa and former security minister Patricia Bullrich, respectively.

With Milei unlikely to have a majority in Congress even if he wins the presidency, Marra said the aim would be to “sow the seed” for a longer-term economic recovery, adding that the party would look for ways to bypass any congressional pushback.

That could include plebiscites or executive decrees, he said. “All of the alternatives that are laid out in the law and the national constitution, we are going to use them.”

Reporting by Anna-Catherine Brigida; Additional reporting by Eliana Raszewski and Juan Bustamante; Editing by Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

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Anna-Catherine Brigida is a correspondent in Buenos Aires, where she has covered Argentine politics and economics since 2023. From 2015 to 2022, she was based in Central America as a freelance reporter, where she covered migrant caravans, historic human rights trials, key elections, reproductive rights and more in El Salvador, Guatemala and Honduras. She has a special interest in covering cryptocurrencies since she began reporting on the topic after El Salvador’s 2021 landmark decision to make Bitcoin legal tender. Her investigation into the murder of deportees in El Salvador was selected as a 2019 finalist in international reporting for the Livingston Award for Young Journalists.

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