Between inflation and the rain of cocaine: is a new Argentina possible?

By: Hugo Marcelo Balderrama - 26/11/2023

Guest columnist.
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In the mid-2000s, specifically, 2005, I won a scholarship to complete my postgraduate training in Economic Sciences at the National University of La Plata of the Argentine Republic. Receiving classes from great teachers such as Aldo Alonso (+), Celestino Carbajal, Gustavo Neffa and, especially, Alberto Benegas Lynch was the best experience of my youth.

Although all the doctoral professors were great, it was Benegas Lynch who took me to the great authors of the Austrian School of Economics and all their thought. That is to say, in Argentina I received one of the best lessons of my life: Love freedom.

However, there was something that didn't add up to me, how could a country that had such brilliant minds teaching at its universities seem destined to fall into the criminal networks of 21st Century Socialism?

For years I had to see my beloved Argentina immersed in corruption, inflation, extreme poverty and the crime of Kirchnerism. All that changed when an extravagant economist named Javier Milei, using swear words and insults, began to move the axis of the debate. Topics such as fiscal pressure, the reduction of public spending, the closure of the Central Bank and the elimination of subsidies began to fill the media.

In September 2020, in the midst of the madness of the pandemic and the almost criminal confinements, I had the opportunity to interview him for a series of conferences by the Libremente Institute, a libertarian organization that at that time had trusted my work. Kindly, Milei told me about his interest in entering politics in the coming years.

First was running for deputy. Now, against all odds, Javier, El Peluca, was elected the next president of Argentina, a term that will begin on December 10.

I share the joy that millions of good Argentines, who proved to be the majority, feel right now. However, not everything is celebrating, as it is time to ask the following question: What are the main challenges that await Milei in the coming months?

Milei will have to face major economic problems, since inflation remains high and the devaluation has already exceeded 1,000 pesos per dollar, not to mention the fiscal situation. In this regard, economist Mauricio Ríos states the following:

Volatility in Argentine assets will likely persist until the reform schedule is revealed and cabinet members are known. Something very important in this sense is that the president-elect did not provide details about the composition of his future cabinet, especially regarding who will be the Minister of Economy, which will be a decisive decision. However, although he did not mention the dollarization of the economy or the elimination of the Central Bank, the fact of having Emilio Ocampo (a scholar and expert on the subject) as part of his team and commanding the BCRA, is already enough to clear up the uncertainty regarding whether it will be applied in an orderly or disorderly manner.

For his part, Adrián Ravier, in his article titled: Dollarizing Argentina is possible and desirable, explains that:

The dollarizing government, in this case Milei's, cannot simply propose a simple dollarization scheme. That measure would fail immediately. The measure must be proposed within the framework of a comprehensive scheme that includes, among other measures, a zero-based budget, balance or better yet a fiscal surplus, lower taxes, deregulation of several key areas of the economy including labor legislation, economic opening, a pension reform and the privatization of a series of public companies that are currently in deficit. In this scheme, Argentina would open a space of optimism among investors who would be interested in betting on a country that today is far from taking advantage of its potential.

However, the economy is not the only front that Javier Milei will have to take care of, but a very dangerous element appears on the scene: organized crime and drug trafficking at the hands of the Castro-Chavista operators in Argentina, specifically, the mafia entrenched in the power of the province of Santiago del Estero, let's see.

Santiago del Estero sits on Route 34, coincidentally, one of the most important cocaine arteries in South America. The highway runs from the southern border of Bolivia to the heart of Argentina. Currently, there are more than one hundred clandestine roads in the region that fulfill a double function: a) Introduce cocaine from Bolivia by land, b) landing strip for clandestine planes that transport Bolivian merchandise to the Rio de La Plata. Hence we speak of the "Cocaine Rain."

In this regard, Douglas Farah, an expert in transnational crime, states the following:

In recent years, the distribution network has moved in the opposite direction, from the north of South America to the Southern Cone. Increased production in Peru and Bolivia provides white powder that flows south through Argentina, Paraguay and Uruguay to more lucrative European markets. Santiago del Estero is a key juncture in the emerging map of the global cocaine trade.

At the political level, Santiago del Estero has been governed for more than fifteen years by the Zamora – Ledesma couple. The couple, with strong control over the electoral system, the judiciary, the provincial police, in addition to the support of gangs such as the First Capital Command of Brazil and the Santiago del Estero Peasant Movement (MOCASE), has established a dictatorship that has not hesitated for a second to disappear opponents and anyone who dared to confront them.

But the thing do not ends there. Ledesma has been a strong defender of China and has spoken at international events about the strategic importance of China for Argentina. Perhaps her most ambitious goal to date is the project to build lithium batteries produced by Argentine companies, coincidentally owned by relatives of the couple, who are partnering with Chinese state companies.

Now, if we consider Milei's idea of ​​limiting geopolitical relations with Russia and China, it is very likely that Zamora and Ledesma will use their contacts with Bolivia's criminal networks, specifically, with the social movements that respond to Evo Morales, to try to destabilize the management of the new government.

All in all, is a new Argentina possible?

Yes. But it requires great citizen commitment, like the one they demonstrated in the elections of last November 19.

Long live freedom, damn it!

«The opinions published herein are the sole responsibility of its author».