Which Country Is the Biggest Fan of Donald Trump’s 2024 Victory? : Part 1

Which Country Is the Biggest Fan of Donald Trump’s 2024 Victory? : Part 1 (Feat. Argentina’s Javier Milei, Presidential Election, Chainsaw Plan, Inflation, Interest & Exchange Rates, IMF, US Dollar, Welfare benefits Cut and Radical Policies)

Following Trump’s 2024 victory, international tensions ran high, especially with major players like China preparing for potential shifts in U.S. policy. Yet, a handful of countries—surprisingly, Argentina among them—welcomed Trump’s win with particular enthusiasm. As Argentina’s economic landscape has undergone major turbulence in recent years, now is a perfect moment to look at why Trump’s victory mattered to them and explore the country’s current economic status. Here’s an overview of Argentina’s dramatic financial developments.

1. Back in the 1930s, Argentina was among the world’s most prosperous nations, with the sixth-highest per capita income globally.

2. The country’s wealth came largely from its fertile Pampas region, where Argentina produced and exported large quantities of soybeans, wheat, and beef. This led to massive trade surpluses and helped maintain a balanced budget.

3. However, things began to change under President Juan Perón, who held power from 1946 to 1955. During his administration, Argentina’s government revenues and spending fell out of sync.

4. Perón’s government nationalized industries like railroads, telephones, gas, and electricity. It also implemented expansive welfare programs and increased wages by 25% annually, which further strained the budget.

5. Perón left office in 1955, but by then, Argentinians had grown accustomed to generous welfare. They continued voting for populist leaders who promised similar benefits.

6. Since Perón’s era, Argentina has defaulted on its debts nine times and received IMF bailout assistance 22 times, earning it the nickname “South America’s chronic defaulter.”

7. To combat inflation—which had exceeded 140%—Argentina started raising its interest rates.

8. By October 2023, Argentina’s central bank had raised its benchmark interest rate to a staggering 133%.

9. Years of extensive welfare spending created huge budget deficits, pushing the central bank to print money to cover the shortfall—fueling inflation and eventually leading to hyperinflation.

10. Just before Argentina’s October presidential election, inflation had reached 143%, drawing voters to Javier Milei, who vowed to curb inflation.

11. With inflation pushing people to believe, “Buy now; it’ll only cost more later,” Milei’s promise to control prices resonated, even with his extreme proposals.

12. Some analysts initially thought Milei’s radical campaign promises were just election tactics and that he’d pivot to more moderate policies once in office.

13. Politicians making exaggerated promises to win votes is hardly a new strategy.

14. Türkiye(formerly Turkey)’s President Recep Tayyip Erdoğan followed a similar path.

15. Erdoğan promoted his own “unique” economic theories.

16. According to Erdoğan, lowering interest rates would bring down prices, boost exports, and—along with a 45-hour work week cap—create jobs and stabilize the Turkish lira and inflation through increased foreign investment.

17. Erdoğan even fired three central bank chiefs who disagreed with his stance on raising rates to stabilize the currency and, since 2021, cut the policy rate from 19% to 8.5% over eight separate reductions.

18. Yet instead of strengthening the currency, Turkey’s lira has plummeted from 640.7 to around 48.5 to the dollar during Erdoğan’s tenure.

19. Unsurprisingly, Turkey’s inflation has also skyrocketed.

20. By some estimates, real inflation in Turkey has surpassed 200%.

21. To offset this, Erdoğan raised the minimum wage by 50% while enforcing the 45-hour work week limit.

22. However, this increase failed to keep up with rising prices, effectively lowering real wages.

23. Erdoğan blamed foreign conspiracies and corrupt elites for these issues, rallying the public to “fight” with religious conviction and patriotism.

24. In May 2023, Türkiye held its own presidential election.

25. After raising the minimum wage by 50% in 2022, Erdoğan pledged a further 100% increase in 2023 as part of his campaign.

26. Erdoğan’s last-minute promises appealed to many voters.

27. Those promises include free natural gas for homes and early pension benefits.

28. As a result, Erdoğan won re-election with 49% of the vote, narrowly defeating his opponent, who garnered 45%.

29. Yet, as soon as he was re-elected, Erdoğan shifted gears and began raising interest rates.

30. He’s since raised the rate from 8.5% to around 50% to counter inflation.

31. This shift reveals that Erdoğan wasn’t simply mistaken—he made questionable promises to secure his re-election, a political move rather than economic naïveté.

32. Politicians aren’t necessarily ignorant.

33. They often know their promises are unrealistic, but they make them anyway to secure votes.

34. Just as Turkey’s Erdoğan acted out of political calculation, analysts expected Argentina’s Milei to do the same.

35. But once Milei took office, he began implementing his pledges.

36. On December 12, Milei announced 10 emergency economic measures, calling this his “Chainsaw Plan.”

37. True to his word, he lifted exchange rate controls.

38. On December 13, Argentina’s official exchange rate doubled overnight from 366 to 800 pesos per dollar.

39. Among these 10 measures, number 8 was an official devaluation of the peso by 119%.

40. Argentina had been using a fixed exchange rate that the government managed.

41. Devaluing the peso by 119% aligned the official rate with the actual market rate used unofficially.

42. Even after the initial devaluation, the peso has continued to decline, surpassing 1,000 to the dollar.

43. Another significant measure in the Chainsaw Plan was the reduction of government employees.

44. Milei’s government announced that it would freeze contract renewals for temporary government workers, reducing the overall workforce.

45. This affected all temporary public servants whose contracts were up for renewal.

46. About 5,000 administrative contract jobs would be cut, along with an additional 2,000 full-time positions, totaling a reduction of around 7,000 public sector jobs.

47. Argentina’s government sector is large—often called a “public employee paradise”—with 3.41 million government workers, or 7.4% of the population of 46 million.

48. By comparison, the United States, with a population of 345 million, has 23.7 million government workers, or about 6.9% of its population.

49. Despite considerable pushback, Milei went even further, cutting over 30,000 government jobs—far beyond the initial 7,000 target.

50. Milei also moved forward with his third major promise: reducing the number of government ministries.

51. Of Argentina’s 18 ministries, departments focused on progressive policies—such as the Ministry of Women’s Rights, Ministry of Environment, and Ministry of Social Security—were dissolved or consolidated.

52. Following this restructuring, Argentina retained only nine ministries: Trade, Defense, Economy, Justice, Security, Health, Interior, Human Resources, and Infrastructure.

53. By pushing through his radical promises, Milei might come across as if he doesn’t understand economics—but there’s more to it than that.

To Be Continued in Part 2 …