Socialist Brazil: ‘Of Course We Are Worried’ About Javier Milei

Brazil’s Finance Minister Fernando Haddad told Reuters on Thursday that the Brazilian government is worried about a possible victory by libertarian economist Javier Milei in Argentina’s Sunday presidential election.

Milei, an outsider libertarian populist, is the Argentine presidential race’s frontrunner candidate, according to most recent polls. In August, Milei obtained roughly 30 percent of the national vote in Argentina’s open primary election. Any candidate seeking to run for office must obtain at least 1.5 percent of the votes during the open primary process to be able to appear on the general election ballot.

Milei is a staunch anti-communist who has repeatedly stated that he “does not do business with communists.” The economist has promised sweeping changes to Argentina’s ailing economy and its foreign policy, including vows to cut state ties with China. Should Milei follow through on that proposal, it would create significant obstacles for China which, under the pro-China government of outgoing leftist President Alberto Fernández, has been able to capitalize on the nation’s dire economic and social distress to exert pressure and seize control of some of its strategic sectors.

Recent polls suggest that while Milei is slated to win on Sunday, he may fall short of the required votes to be elected in the first round, which will automatically trigger a runoff election on November 19 between the two most-voted candidates.

To win the presidency in the first round and avoid a runoff election, a presidential candidate must obtain either more than 45 percent of the votes cast or more than 40 percent and have a difference of more than ten percentage points between themselves and the runner-up candidate. The next president-elect will begin his or her term on December 10.

“Of course I am worried. A person whose slogan is to break the relationship with Brazil that was built over centuries does worry us,” Haddad told Reuters late Wednesday. “It would worry anyone.”

Historically, Argentina has maintained close commercial and diplomatic ties with Brazil.. At an ideological level, both nations have, under the auspices of their current leftist governments, further steered towards China, especially Brazil following the start of radical leftist President Luiz Inácio Lula da Silva’s third presidential term in January. Brazil and Argentina signed agreements with China this year to discard the use of the United States dollar and adopt the Chinese yuan to conduct trade with the Asian nation.

Argentina, with the support of Lula’s government, was granted a membership seat in the China led BRICS-trade and security bloc in August. Argentina – alongside Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates – is slated to start its BRICS membership on January 1, 2024.

Presidents Fernández and Lula share a longstanding friendship that prompted Lula to intercede on behalf of Argentina at the International Monetary Fund (IMF) this year to facilitate negotiations regarding Argentina’s over $40 billion debt to the IMF.

Haddad told Reuters that the Brazilian government has worked on four proposals that provided guarantees for Brazil to accept financing imports from Argentina, but none of them managed to go ahead due to the “impossibility or inability of the neighboring government to comply with demands.”

Argentina is suffering a severe economic meltdown that has accelerated in the four years of Férnandez’s presidency. The country currently boasts the world’s third-worst inflation rate. The dire economic situation has nearly depleted all of Argentina’s foreign reserves, a problem Férnandez has tried to remedy through a recently expanded $6.5-billion currency swap deal with China.

Argentina is presently the top market for Brazilian manufactured goods and, due to the nation’s dire economic situation, has sought Brazil’s assistance to finance its imports. Haddad assured Reuters that Brazil’s proposals continue to stand but added that, depending on who is elected, relations with Argentina may become impossible.

In an interview given to The Economist in September, Milei described Lula as a “complicated” case, asserting that the Brazilian president is “not only a socialist,” but someone “who has a totalitarian vocation.”

In that same interview, Milei repeated that he does not like to deal with communists because “no communist system leads to freedom, in fact it destroys it, so I can’t have dealings with communists.”

Milei would reassert his anti-communist stance shortly afterwards in an exclusive interview given to Tucker Carlson in September.

“Not only would I not do business with China, I won’t do business with any communist,” Milei told Carlson. “I am a defender of freedom, peace, and democracy. Communists have no place there. The Chinese have no place there. [Russian strongman Vladimir] Putin has no place there. Let’s go further: [socialist Brazilian President] Lula [da Silva] has no place there.”

Milei’s proposed changes to Argentina’s foreign policy would mark a stark contrast to that of neighboring Lula’s pro-China and pro-Palestinian stances.

In an interview given to the Argentine América 24 news channel on Wednesday, Milei expressed that, if elected, Argentina will have an “alignment” with the United States and Israel. Milei also touched upon the subject of the BRICS bloc.

“What I said is the following: I will not make strategic alliances in geopolitical terms with people who do not respect freedom, with people who do not respect peace. I will not make deals with communists,” he said with regards to the China-led bloc.

“Now, that is a geopolitical definition,” he added, and clarified, with regard to private business dealings, “Tomorrow if you want to do trade with China, do it, it is not my problem. Do it,” he continued. “But I as a country will not align myself with communists, or with those who do not defend freedom, or with those who do not defend democracy, or who are not peaceful.”

Milei further explained that if China decides to invest in Argentina, then it must do so with private companies, adding that he, as a head of government, would not get involved in that.

“What would the ideal world in trade be like? That the state does not intervene, that it is not involved at all,” Milei stated.

When asked if he would put Brazil and Lula in the “same bag,” Milei simply answered “Obviously.”

The libertarian presidential frontrunner followed by describing the Mercosur trade bloc as a bad idea and as an “imperfect customs union.” Mercosur is an economic and political bloc founded in 1991 by Argentina, Brazil, Paraguay, and Uruguay. The bloc also counts with other regional nations such as Chile and Colombia as associate states. Venezuela’s participation has been suspended since 2016 due to continued gross human rights abuses and violations of the bloc’s trade rules by the socialist Maduro regime.

Milei stated that he would prefer that Argentina conduct its trade in a bilateral manner. 

“I am very pro-trade, but what I am saying is precisely in these agreements, the common markets, the customs unions, all trade is administered by the government, I do not want that,” he said.

Milei will face off against four other candidates on Sunday. If not elected in the first round, polls suggest that he will head off to a runoff election in November against either establishment conservative candidate Patricia Bullrich or socialist and current economy minister Sergio Massa.

Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.