The Wall Street Journal stated this Sunday (12) that Argentina’s economic future under Javier Milei could have an impact on all of Latin America. In an editorial, the newspaper praises the president’s pro-market reforms, but warns that the recent US$20 billion bailout from the United States for the Argentine currency will be useless without the adoption of the dollar as a monetary reference.
Last week, the US Treasury intervened to contain the devaluation of the Argentine peso, buying local currency and . Treasury Secretary Scott Bessent stated on the X network that the country is facing “a moment of acute illiquidity” and promised “exceptional measures” to stabilize markets.
The WSJ recognizes that the operation brought temporary relief to the exchange rate, but considers that the Argentine crisis is one of confidence and not liquidity. According to the text, Milei’s reforms, such as fiscal adjustment and the end of the “Peronist attack on business”, improved the economic environment, but inflation above 30% and the risk of political setback keep the country vulnerable.
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The newspaper emphasizes that Milei’s success would have regional reach:
“If Milei can turn his pro-market reforms into economic and political success, the lesson will spread to the rest of Latin America and beyond. It would be a victory against the tide of left-wing populism that has caused problems from Brazil to Colombia, Venezuela and Central America.”
The editorial adds that, for this transformation to occur, it is necessary to restore confidence in the currency, something that, in the editorial board’s view, will only come with dollarization. The text cites the example of Ecuador, which adopted the dollar in 2000 and “defeated inflation”.
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The WSJ questions why Milei, who during the campaign promised to abolish the Central Bank, now resists the measure, and attributes the opposition to the Minister of Economy, Luis Caputo, to funds that profit from massive operations and to the IMF itself.
The newspaper concludes that, if the US Treasury does not pressure Buenos Aires to dollarize the economy after October’s legislative elections, the US$20 billion bailout will end up wasting “good dollars chasing bad pesos”.
