President Javier Milei has won an important victory in Argentina’s mid-term elections, with his party securing a 41 per cent share of the votes compared to 32 per cent for the populist Peronists. He has hailed this unexpected success as a turning point in his libertarian drive to downsize and deregulate the Argentine state. The political and fiscal support Milei received from Donald Trump and the US helped sway voters and are significant elements in the current US approach towards Latin America.
Milei approached these elections in a weaker position after his initial success in slashing inflation through deep spending cuts and dismissals of state employees. Rising unemployment, poverty and corruption scandals dented his popularity, while he lacked political allies for longer-term political change. He can now claim a mandate to continue his programme as financial markets respond positively to his victory, helping maintain the peso’s strategic link to the US dollar.
This result will bolster Trump’s determination to prioritise Latin America by reasserting US power there. His growing military confrontation with the left-wing Maduro regime in Venezuela involves a huge naval build-up in the Caribbean and lethal attacks on alleged drug running boats coming from there. In fact the major drug routes into the US are in the Pacific and through Mexico. An orchestrated regime change in Venezuela would open up its vast oil and mineral resources to US investors, a clear Trump objective.
Such gunboat diplomacy resurrects charges of Yankee imperialism in Latin America. It is a new version of the 1823 Monroe doctrine which warned European powers not to compete with the expanding US there. During the Cold War that was directed against Russian communist influence on the region’s politics, notably in Cuba, Chile and Central America. Now the target is China which has become a formidable competitor of the US for Latin American trade deals and investment. Any US deal reached with China will reinforce the Trump administration’s determination to assert this hemispheric power.
