by By Jesus Felipe and Matías VernengoALTHOUGH the economies of Argentina and the Philippines are very different, the two share structural problems that make both nations’ development a complex process. The election of Javier Milei as the new president elect of Argentina, gives us the opportunity to review the differences and parallels between the two economies.Milei is a radical libertarian populist economist with authoritarian tendencies. His proposals range from the dangerous in economics (dollarization, closing the Central Bank, a drastic reduction of social spending) and social issues (curtail human rights and democratic advances, loosen gun ownership laws, and the elimination of all those institutions that would have any relationship with his two biggest obsessions: the State and the
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Matias Vernengo considers the following as important: Argentina, Dollarization, external constraint, Jesus Felipe, Milei, Philippines
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Milei is a radical libertarian populist economist with authoritarian tendencies. His proposals range from the dangerous in economics (dollarization, closing the Central Bank, a drastic reduction of social spending) and social issues (curtail human rights and democratic advances, loosen gun ownership laws, and the elimination of all those institutions that would have any relationship with his two biggest obsessions: the State and the “political caste”) to the insane: institute a free market for human organs. His election has shocked many in Argentina, but the reasons for his rapid rise are not hard to find. The Philippines has also had its share of populist presidents with also questionable ideas and behavior.
Argentina’s economy stagnated over the last decade, with an average annual rate of GDP growth of about 0.2%, and with an accumulated inflation of approximately 450%, reaching 140% on an annualized basis in October. Poverty has also soared. The poverty incidence increased from about 25% a few years ago to about 40%, when measured by the national poverty line. However, Argentina, with a population of about 46 million, is not a poor country. By the World Bank’s definition, it is an upper middle-income country with a GDP per capita of almost $12,000, about three times that of the Philippines. Argentina’s poverty rate is 2.5% by the $3.65 per day World Bank measure. The equivalent rate for the Philippines is 17.8%.