Argentina’s likely new President intends to snap the current oppressive farming taxes and privatise the state oil company.
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Javier Milei – the libertarian candidate in Argentina’s Presidential Election – would remove state interference from Argentina’s massive farming industry, resulting in a boom in exports and foreign investment.
Milei, a free-market advocate, promised to dismantle the policies that have prevented agricultural investment in this century. Milei would eliminate export tax quotas and unify the foreign exchange rate. He also wants to stop direct interference in food prices.
On Wednesday, Milei told reports that the programme was part of his deregulation program. We have to eliminate all of those regulations as soon as we can.
Argentina is the world’s largest supplier of beef, soybean meal, and corn for feed to livestock. Farmers haven’t fully tapped the potential of flatlands due to years of market interventions designed to boost tax revenue and curb inflation. Milei claims Argentina’s poverty levels prove that it has been a failure.
The interventions would be redundant in the theory since he intends to cut down on government spending and stamp out inflation by abandoning Argentina’s currency. They also go against his libertarian principles. According to Milei, a subsequent free market can lead to “an explosion of farming activity.”
Even so, street protests and dissent at Congress may put investors off.
Mauricio Mauricio’s experiment with market-oriented policy during the last decade led to a growth in farm exports. Milei, however, would go one step further and eliminate billions in annual soy taxes.
Milei stated that farmers could pay soy levies in exchange for lower income taxes during the transition. He said that under Milei, they would be so wealthy, Milei claimed, that they might even finance Milei’s government. This idea is anathema for them in the current regime.
Lithium and Oil
Milei told investors they should “have no doubt” about his plans to re-privatise YPF SA in the oil industry. The government first nationalised the company in 2012 when it spearheaded the development of Patagonian shale wealth. The privatisation would not happen until about two years, as a Milei-led government needs time to transition to a more accessible energy market.
Milei stated, “We will need YPF to help us manage this transition as we get the energy sector back on track.”
Milei wants to eliminate capital controls, export restrictions and price controls, which have hampered Argentina’s growing shale industry. According to the governor of oil-heartland Neuquen, Exxon Mobil Corp. put up its shale oil assets for sale due to restrictions on money flow.
Milei said he would not deviate from his principles regarding mining and metals. He’d let the markets decide what they wanted.
The government has been trying to avoid another Latin American resource curse by turning Argentina’s lithium rush into a homegrown battery-manufacturing industry for electric vehicles. When asked if he would abandon these efforts, Milei replied: “Don’t choose the winners.” Make the batteries wherever you want.
Milei stated that he would not pursue diplomatic relations with China due to what he referred to as its intrusions on individual freedoms. He would not interfere with Sino-Argentine investment and trade. China is the largest buyer of Argentina’s beef and soybeans, unprocessed. It also led to the development of its Andean Lithium deposits.
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