Milei’s Argentinian MAGA: Make Argentina Great Again! – By Hemantha Yapa Abeywardena
Javier Milei, the flamboyant, Argentinian president, who came to power in December by performing a series of unorthodox, political stunts, appears to be determined to assign a range of controversial tasks to his most striking political symbol during the campaign – the chainsaw.
With an administrative equivalent of a chainsaw, Mr Milei is already hacking his way through the intricate, bureaucratic woods in his native Argentina, implying nothing was off-limit.
Mr Milei, to begin with, is planning to lay off over 70,000 government employees, has frozen public projects and and devalued Argentinian peso by more than 50%. To his credit, they appear to be working in his favour, at least for now; the inflation has been slowing down for four months in a row, but it is still high; Argentina, up until recently, had the world’s highest inflation – a staggering 280%.
In 2025, if all goes well, economists believe that the inflation could be brought down to around 30%.
The current state of affairs in Argentina is a far cry from its boom years in the early 19th century, though: The expression, “riche comme un Argentin” (as rich as an Argentine) was part of the French lexicon in those happy years to attract immigrants from Europe, especially from Italy, France and Spain, to sharing the growing Argentinian wealth, which, at that time was on a par with that of Canada.
Although Mr Milei has borrowed a leaf out of President Trump’s playbook, MAGA – Make America/Argentina Great Again – there are distinct differences between the two political heavyweights, despite them seeing eye to eye on many issues; Mr Milei, like Mr Trump, for instance, is an unapologetic critic of Net-zero policies that he thinks, is hindering Argentina’s economic recovery plan.
In order to achieve the goal, Mr Milei is determined to tap into Argentina’s vast shale oil reserves in the Vaca Muerta formation in Patagonia. It is one of the largest shale oil and gas reserves in the world. Exploiting these resources could provide a substantial boost to the Argentine economy, potentially transforming it into a major energy exporter.
The development of the shale oil sector has already attracted considerable foreign investment: companies like Chevron, ExxonMobil, and Shell have committed billions of dollars to develop these resources, while the Argentinian government, on its part, has also introduced policies to incentivize investment in the energy sector, cut down on the red-tape, recognizing its potential to generate jobs, boost exports, and enhance energy security.
Shale oil extraction is a process of obtaining crude oil from shale formations, which are fine-grained sedimentary rocks containing significant amounts of organic material called kerogen. This process has gained prominence in the US, particularly in the Bakken and Permian Basins, due to advancements in technologies such as hydraulic fracturing (fracking) and horizontal drilling, which have made it economically viable to access these previously untapped resources.
Not only did shale oil boom help the US become the world’s top oil producer, but also earned it the title for being a net-exporter of the commodity, against all odds.
Hydraulic fracturing involves injecting high-pressure fluid into shale formations to create fractures, allowing oil to flow more freely. Horizontal drilling complements this by enabling the drill to reach vast areas of the shale layer, maximizing oil recovery from a single well.
However, shale oil extraction is not without its drawbacks: there are significant environmental concerns that include the potential for groundwater contamination, high water usage, and increased seismic activity; moreover, the extraction process releases methane, a potent greenhouse gas, contributing to climate change.
Despite these challenges, Mr Milei, just sees the positive side of the shale oil boom, because it remains a critical component of the Argentinian energy mix, driving economic growth and energy security as part of his great vision for the country.
Mr Milei, with his unkempt hair and messianic aura, meanwhile, has greater ambitions beyond the Argentinian borders.
Like every politician with a dream of immortality, Mr. Milei aspires to leave his mark on the world’s political sandbox. He claims to have concocted a revolutionary economic plan for those who worship at the altar of libertarianism.
Whether his blueprint is a stroke of genius or just a doodle remains to be seen in the coming months – or perhaps years – ahead.
