Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Argentina's new president is
Speaker 1: taking radical steps to get the country out of a crisis.
Speaker 1: Annual inflation is around two hundred and seventy five percent.
Speaker 1: That some of the highest inflation in the world. And
Speaker 1: to put that in perspective, a coffee you paid five
Speaker 1: dollars for in January would cost almost twenty dollars one
Speaker 1: year later. The effects of this kind of high inflation
Speaker 1: are devastating. People's life savings go up in smoke, rent soares,
Speaker 1: and so do food prices. Argentina's economy has been spiraling.
Speaker 1: It was in the midst of this crisis that Javiermulay
Speaker 1: was elected president last year. Melay is a staunch libertarian,
Speaker 1: and his campaign promised drastic reforms would turn the country around.
Speaker 1: He called for burning down the country's central bank, and
Speaker 1: Malay wielded a chainsaw to illustrate how he was going
Speaker 1: to cut through government spending. He also dressed up as
Speaker 1: general and cap that's short for a narco capitalist. Malay
Speaker 1: wore spandex and a mask, waived a trident and sang
Speaker 1: about fiscal policy. But there's another side to Malay. He
Speaker 1: was an economist by profession, widely published, and about one
Speaker 1: hundred days into his term, Melay has softened some of
Speaker 1: his positions a bit.
Speaker 2: You know he is. I think the word eccentric would
Speaker 2: be an extraordinary.
Speaker 1: This week, John Micklethwade, Bloomberg's editor in chief, sat down
Speaker 1: with Argentina's president to talk about the radical reforms he's
Speaker 1: made so far. Today on the show Argentina and Javier
Speaker 1: Malay's plans to shock that country's economy. I'm David Gura,
Speaker 1: and this is the big take from Bloomberg News. Javier
Speaker 1: Mile became the President of Argentina just over one hundred
Speaker 1: days ago. He made headlines with his extreme politics and
Speaker 1: his flair for political theater after Bloomberg editor in chief
Speaker 1: John Micklethwaite interviewed him. This week in Buenos Aires, I
Speaker 1: caught up with John and I asked him to describe
Speaker 1: the challenges Argentina faces today.
Speaker 2: I think the easiest way to explain Argentina to pretty
Speaker 2: much everybody outside Argentina is you take everybody else's problem
Speaker 2: and you multiply it by about ten. So in Argentina,
Speaker 2: it's a great success to reduce inflation to thirteen percent
Speaker 2: per month, when most other people would worry if you
Speaker 2: had one percent inflation per month. You look at the
Speaker 2: numbers in terms of what is happening as this rather
Speaker 2: amazing figure begins to enact as reforms. You see consumer
Speaker 2: spending diving by twenty five percent in a month, pensions
Speaker 2: thirty percent below what they were last year, fifty seven
Speaker 2: percent of people living in poverty, salaries down fifty percent
Speaker 2: over x amount of years. You could go on and on,
Speaker 2: and you look at the amount of fuss that happens
Speaker 2: in other countries when things change by two or three percent,
Speaker 2: and the way we write about those, And then you
Speaker 2: come to Argentina.
Speaker 1: His path to the presidency was paved with promises. He
Speaker 1: said he was going to put in place thousands of reforms.
Speaker 1: How happy does have your malay seem with the progress
Speaker 1: that he's made so far?
Speaker 2: I think the answer is a mixture between bravado mixed
Speaker 2: with bits of realism.
Speaker 3: So face with this.
Speaker 4: Scenario, scenario unprecedented fiscal adjustments in the history of humanity.
Speaker 2: I mean, the Bravado is, yes, the most incredible thing
Speaker 2: in the history of humanity. It's almost kind of trumpion
Speaker 2: in its sense of Hubris, But it is, as I
Speaker 2: pointed out, by most people's standards, it is a fairly extraordinary,
Speaker 2: subtainly the most extraordinary economic experiment going on in the
Speaker 2: world at the moment. What's happened to him is that
Speaker 2: he's come in with all these ideas hired by Milton
Speaker 2: Friedman and people like that. He is furious with the
Speaker 2: central Bank for printing money, and so he once he
Speaker 2: came in saying that he wanted to get rid of
Speaker 2: the Central Bank, and he wanted to get rid of
Speaker 2: the peso and replace it with the dollar, so that,
Speaker 2: in other words, the currency would be taken out of
Speaker 2: the hands of the criminals, as he sees it, and
Speaker 2: given to somebody he trusts slightly more.
Speaker 1: John, you asked him about his plans to demolish the
Speaker 1: central bank, and I was struck by his rhetoric.
Speaker 4: Wills they make it a crime, I guess humanity?
Speaker 1: And if he didn't hold back in the way that
Speaker 1: he talked about economic policy makers, he threatened prison time
Speaker 1: for a policymaker who would print pasos in the future.
Speaker 1: What did you make of just the way that he
Speaker 1: talked about the central bank in the interview?
Speaker 2: Firstly, it's extraordinary. That thing about inflation is really important.
Speaker 2: If you talk to people in the street in in Argentina,
Speaker 2: some of them adore Mela. A lot of other ones
Speaker 2: just say, look, I voted for him because I just
Speaker 2: I know the other lotter useless. But the one number
Speaker 2: that they really all look at is inflation, because that
Speaker 2: has been ruining their lives for years. So if he
Speaker 2: can begin to bring that down, then that gives him
Speaker 2: a bit of credibility with them.
Speaker 1: The inflation situation in Argentina is so dire, and money
Speaker 1: loses its value so fast that the moment people get paid,
Speaker 1: they raise to black market money changers to convert their
Speaker 1: Argentine pesos to US dollars. Kevin Simoucci is a reporter
Speaker 1: in our Buenos Aires bureau.
Speaker 3: So we're here in the streets of Buenos Aires. It's
Speaker 3: a normal Thursday afternoon during lunch hour, interspersed throughout the streets.
Speaker 3: Throughout the small size streets, there are several individual money
Speaker 3: exchange and come your cameo.
Speaker 4: Here on.
Speaker 3: Night, and this is basically a way for every day
Speaker 3: Argentines to have access to the dollar.
Speaker 1: After the break, we'll hear from someone who voted for
Speaker 1: Hobvier Milay, hoping the radical reformist would make life better
Speaker 1: for him and his young family. And we'll hear from
Speaker 1: lay on his timetable for change. High inflation has made
Speaker 1: life brutal in Argentina. It's put millions of Argentines out
Speaker 1: of work, and right now more than half the population
Speaker 1: lives below the poverty line. One of them is Samir
Speaker 1: Santa Cruz, a twenty two year old who lives in
Speaker 1: Buenos Aires.
Speaker 2: Buen Ataires, Membresendo so is Sameir Santa Gruz bo and Nacandina,
Speaker 2: Buenos Aires God.
Speaker 1: Santa Cruz worked as an upholsterer, but when he and
Speaker 1: his partner had a baby daughter, they moved in with
Speaker 1: his parents to save money. He's now found a new gig,
Speaker 1: delivering food by bike. Money is tight and skyrocketing prices
Speaker 1: have only made things harder. To make sure his daughter
Speaker 1: has everything she needs, Santa Cruz and his partner started
Speaker 1: skipping meals, tiding themselves over with mate tea. Don't say
Speaker 1: breakfast is mate, Lunch is mate, A snack is mate.
Speaker 1: He and his partner eat only one meal per day.
Speaker 1: Santa Cruz says it's hard to eat so little, especially
Speaker 1: when he's riding his bike for hours every day. It's heavy,
Speaker 1: he says, but the sacrifice is worth it because it
Speaker 1: gives his daughter three meals a day, and she is
Speaker 1: the most important. Santa Cruz and his partner want a
Speaker 1: better life for their daughter. They don't want her to
Speaker 1: go through the same hardships and insecurity that.
Speaker 2: Denis.
Speaker 1: That's why they both voted for Maulay. Santa Cruz hopes
Speaker 1: the future will unfold like Melais says it will, and
Speaker 1: that Argentina will be a great country again, one of
Speaker 1: the best Basincina. This is a country full of people
Speaker 1: struggling like Samir Santa Cruz, which makes Javier Malay's job
Speaker 1: very daunting. It's something Bloomberg editor in chief John Micklethwaite
Speaker 1: asked the president about how much patience do Argentines have.
Speaker 2: I've just looked at the statistics. They're quite frightening. The
Speaker 2: average salary in Argentina is at lowest level since two
Speaker 2: thousand and three. Fifty seven percent of Argentine's live in poverty.
Speaker 2: Consumer spending dropped twenty three percent in February so far.
Speaker 2: The interesting thing is your support has stayed high at
Speaker 2: fifty percent. But do you accept that there is a
Speaker 2: time limit on how much pain Argentines can keep can
Speaker 2: take to take these reforms? All right?
Speaker 4: The first thing is the way we see it. There
Speaker 4: has been a cultural change in Argentina and most Argentines
Speaker 4: have understood that the solution is not populism. Losarios today
Speaker 4: a miserable not through our own is due to twenty
Speaker 4: years of populism.
Speaker 1: Mickelthwaite says, Mile has maintained a lot of popular support,
Speaker 1: and one way he's done that is by drawing a
Speaker 1: stark contrast between him and his predecessors and the policies
Speaker 1: they implemented.
Speaker 2: I think everyone knows that that. You know, the reason
Speaker 2: why Argentina is in the pickle that it is is
Speaker 2: not because of him. You know that there are so
Speaker 2: many things to fix, and if you can just hang
Speaker 2: onto that idea of endlessly saying, look, I've been defeated
Speaker 2: by what he calls the cast the blob. I suppose
Speaker 2: someone else will call it the The establishment is fighting me.
Speaker 2: They're stopping me to being able to do these things.
Speaker 2: You know, I'm the person who's getting rid of free
Speaker 2: croissants in the state. I'm the person who's giving away
Speaker 2: my salary. I'm the person who's doing all these things
Speaker 2: they never did. Then if he can get to the
Speaker 2: mid term elections, which in next year, and he can
Speaker 2: do well, then then he can begin to push through
Speaker 2: even bigger reforms.
Speaker 1: It's bound to be a difficult path right now. President
Speaker 1: Malay may have a lot of popular support, but he
Speaker 1: has far less political support. Congress blocked Malay's so called
Speaker 1: Omnibus bill, which was full of even more reforms. In
Speaker 1: his interview with John, President Malay said he's hoping the
Speaker 1: political landscape will change.
Speaker 4: Reforms that I can't push through today are will pushed
Speaker 4: through after.
Speaker 2: So really the biggest reforms could come after you at
Speaker 2: a majority in the midterms.
Speaker 1: Except the Mulay, the former academic economist, is learning about
Speaker 1: the challenges of governing.
Speaker 2: John says, So it's a mixture between talking very tough
Speaker 2: and actually being pragmatic. And if you want a very
Speaker 2: sort of easy example of that, it would be China.
Speaker 1: On the campaign trail, Mulai took a hard line against
Speaker 1: communist countries. As a candidate. He told Bloomberg that he
Speaker 1: would not promote relations with any communist countries, including China.
Speaker 2: But one of the things he's discovered when he's in
Speaker 2: power is actually, not only did the Chinese I'm quite
Speaker 2: a lot of money into the Argentine economy. There's also
Speaker 2: an eighteen billion dollar swap line current, which effectively is
Speaker 2: a big portion of Argentine's reserves. So for all the Bravura,
Speaker 2: you know, they hold part of the Argentine economy in
Speaker 2: their hands, and that means he has to compro a bit.
Speaker 1: Argentina's political and economic problems are very entrenched, and John
Speaker 1: knows this well. The interviewed one of Mela's predecessors, Carlos
Speaker 1: Menem in the nineteen nineties, at a time when the
Speaker 1: country was also battling high inflation. I wonder, being back,
Speaker 1: sort of what you've noticed about what's changed and what
Speaker 1: hasn't about the place? What stood out to you on
Speaker 1: this return vision.
Speaker 2: I think the thing that stands out about Argentina is
Speaker 2: the gradual accumulation of problem, the kind of full storms
Speaker 2: it really is. You know that there is no other
Speaker 2: country in the world that you can say has fallen
Speaker 2: as far down the ladder over the past one hundred years.
Speaker 2: You know, it's you should always remember this. In Argentina
Speaker 2: was the I think the fourth richest country in the
Speaker 2: world one hundred years ago. It was a place where
Speaker 2: if you were an immigrant or you wanted to emigrate
Speaker 2: from the old world to the new, you would seriously
Speaker 2: have looked and tried to work out whether Argentina or
Speaker 2: California was a better bet. And many, many people chose
Speaker 2: Argentina because it is one of the world's most fertile places.
Speaker 2: If you have anything to do with agriculture, this is
Speaker 2: an amazing place. It has many, many, many advantages, right
Speaker 2: the way down to the world's best soccer team. There
Speaker 2: are still elements of a middle class life in Argentina
Speaker 2: which are fantastically attractive to people. This is still a
Speaker 2: place which many people here see themselves as kind of
Speaker 2: the European part of Latin America. But I think it's
Speaker 2: very difficult think of any other country which has had
Speaker 2: that long and almost semi perpetual element of always choosing
Speaker 2: the wrong person. And there have been bits. Carlos Menhim
Speaker 2: was a very obvious example. Menim came in and he
Speaker 2: sort of, as I remember, he reduced inflation from even
Speaker 2: larger numbers. That what Mille is now facing. But gradually
Speaker 2: things began to go wrong again then, and there were
Speaker 2: elements of corruption, there were elements of outside forces coming
Speaker 2: to bear and all those sort of things. But this
Speaker 2: element whereby Argentina has sort of tried everything except sort
Speaker 2: of confronting some real issues to do with productivity and
Speaker 2: all those sort of things, and those are now coming back.
Speaker 2: So yes, when you walk around here there is still
Speaker 2: amazing things of charm. It feels like the same place
Speaker 2: only slightly older, and it has not economically has not
Speaker 2: got better, So that that I think is the kind
Speaker 2: of that's the reason why Millet is so interesting. It's
Speaker 2: partly because of what he's trying to do, the extremness,
Speaker 2: the extraordinaries of with that, but it's also partly there
Speaker 2: is this amazing country of enormous charm potential with some
Speaker 2: very highly educated people that should be a kind of
Speaker 2: load star in this region. And this is, you know,
Speaker 2: more than even before. It feels a bit like a
Speaker 2: last chance.
Speaker 1: This is the big take from Bloomberg News. I'm David Gera.
Speaker 1: This episode was produced by David Fox. It was edited
Speaker 1: by Stacy Vanick Smith and Danielle Balby. It was mixed
Speaker 1: by Alex Sugira. It was fact checked by Adriana Tapia,
Speaker 1: Julia Press, Thomas lou and Sarah Holder. Our senior producers
Speaker 1: are Naomi Shaven and Elizabeth Ponso. Nicole Beemster bor is
Speaker 1: our executive producer. Sage Bauman is our Head of Podcasts.
Speaker 1: Special thanks to Jilda Decarli, Kevin Simoucci, Ignacio OLIVERA Dole
Speaker 1: and Patrick Gillespie. Thanks for listening. Please follow and review
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