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- From Galperin to Elsztain, Argentina CEOs embrace Milei’s win
- Argentina bonds, stocks rallied Monday on change expectations
Javier Milei speaks during an election night rally at the party headquarters in Buenos Aires, Argentina, on Nov. 19.
Photographer: Anita Pouchard Serra/Bloomberg
By Patrick Gillespie
November 21, 2023 at 7:16 AM PST
There is a tango beloved by Argentines known as the ‘Balada para un loco,’ which makes the case that madness is a way of enjoying a life in freedom.
The election of Javier Milei as Argentina’s next president tapped that same spirit. As one tycoon in Buenos Aires put it: Only a madman can do what’s needed to take the country forward.
The phrase sums up the mood among corporate leaders after the larger-than-expected win pulled off by the libertarian outsider, with Argentines opting for a drastic new path after decades of economic failure, despite fears of the unknown.
From tech to real estate to agriculture, Argentine executives rejoiced over Milei’s victory after four years of byzantine policies that only deepened the country’s chronic problems and economic crisis.
Eduardo Elsztain, founder and chief executive officer of Irsa Inversiones Y Representaciones SA.Source: Bloomberg
“It’s such good news for Argentina,” Eduardo Elsztain, who runs an empire of shopping malls, farmland, office space and gold mines as Chief Executive Officer of IRSA Inversiones y Representaciones SA, said about Milei’s election. “Argentines are willing to change, it’s a good sign.”
Read More: Milei Meets Outgoing Argentina President in Start of Transition
A virulent market rally on Monday confirmed how much Milei’s win swiftly changed business expectations, even if the country’s dire outlook that includes inflation over 140%, lack of access to international credit and a nosediving economy is still very much alive after the election.
Bonds and stocks jumped, with some Argentine shares rising as much as 40%. That investor euphoria not seen in the country in years contrasted with economist warnings that Milei’s economic proposals — including dollarization and shutting the central bank — could catapult Argentina into higher volatility or even hyperinflation.
Read More: Milei’s Dollarization Gets First Test as Argentine Banks Reopen
Yet Elsztain shrugged off the concerns, saying Argentina’s biggest challenge isn’t its currency but reining in the government’s fiscal largesse.
“The market reaction — it’s just the first day, but it should be continuous,” he said in an interview on Monday.
Marcos Galperin, chief executive officer at e-commerce giant MercadoLibre Inc. and a recurrent critic of the outgoing Peronist administration of President Alberto Fernandez, euphemistically celebrated Milei’s electoral win with an image on X (formerly known as Twitter) of birds breaking their chains. He added just one word: “Free.”
Meanwhile, Martin Migoya, founder and CEO of software multinational Globant Inc. — another Argentine unicorn trading in the US — congratulated Milei. “Liberty, hard work, lots of humility and long-term thinking to make the country that we have dream of and we can build,” he wrote.
And Cristiano Rattazzi, an heir to Italy’s Agnelli family who founded the Fiat carmaker giant, told newspaper La Nacion that “between the madman and the fox, fortunately Argentines voted for the madman.”
“Now the hard work to take Argentina to what it was 100 years ago starts,” Rattazzi added.
Billionaire Marcelo Claure, the former SoftBank Group Corp. executive with extensive businesses in Latin America, and Tesla Inc.founder Elon Musk also celebrated Milei’s win.
Initial Reaction
The early enthusiasm with Milei among Argentina’s corporate elite — triggered by his moderate victory speech on Sunday night — contrasts with the doubts and divisions seen until just a few days ago.During separate events at the historic Alvear Hotel in Buenos Aires last week, business leaders grilled Milei and his runoff rival, Economy Minister Sergio Massa, on details about their stabilization plans. Preferences were split, with Massa seen as a less disruptive option, but almost none expected the libertarian candidate to beat his Peronist rival by almost 12 percentage points.
At the same time, Argentine business executives still want to see more details from the first-term congressman, who rose to the presidency by upsetting Argentina’s top two established political forces. It’s also true that the mood and expectations among groups that depend on government businesses were much more downbeat on Sunday given the uncertainty that Milei’s policies generate, according to a person with regular contact with the corporate elite in Buenos Aires.
Read More: Milei Opens a New Era: What Comes Next in Argentina
The business executive closest to Milei, billionaire Eduardo Eurnekian, hasn’t commented publicly since his former employee won the presidency. Eurnekian, founder of conglomerate Corporacion America, distanced himself from Milei’s controversial remarks at times and even signaled support for Milei’s former rival, Patricia Bullrich, before the first round.
Read more: Milei’s Win Sealed by a Risky Gamble That Turned Rival Into Ally
Still, a spokesperson said that Eurnekian is “happy and expectant” with the new government. And a top former executive at one of Eurnekian’s companies, Nicolas Posse, joined Milei’s campaign and accompanied him to meet with President Alberto FernandezTuesday.
Milei is going to need all the support he can get as his major economic policies will probably face stiff resistance in a fragmented congress where his party only controls a fraction of seats. The sharp spending cuts and shock therapy that Milei has pledged to slash the chronic fiscal deficit is also likely to generate tensions with social groups and unions.
Leaders from Wall Street and Washington will likely have their first chance to meet Milei as president-elect — and hopefully get policy details — when he takes what he calls a “spiritual” trip to New York and Miami in the coming day before the Dec. 10 inauguration.
— With assistance from Manuela Tobias
‘Madman’ Milei Thrills the Rich Who Are Desperate to End Economic Slump
There is a tango beloved by Argentines known as the ‘Balada para un loco,’ which makes the case that madness is a way of enjoying a life in freedom.
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