Russian strongman Vladimir Putin lamented the “significant loss of sovereignty” he claimed Argentina would face if its newly inaugurated president, libertarian economist Javier Milei, moves forward with a plan to adopt the U.S. dollar as an official currency.
Putin insisted that “dollarization,” as the process is called, was “the sovereign decision of each country” and he was not inclined to meddle in Argentina’s economic decisions, but appeared to disapprove of the plan.
The remarks are Putin’s first negative comments about Milei since his inauguration on Sunday. Putin issued a formal, albeit distant, congratulatory statement to Milei following the Argentine presidential election on November 19, stating in part, “We hope for the further promotion of our strategic partnership with Buenos Aires in many diverse areas and for the development of constructive dialogue on current international issues.”
Milei has made clear his distaste for Putin’s authoritarian regime for years as a television commentator and has stridently opposed Russia’s invasion of Ukraine, currently the most important geopolitical issue for Russia. Under his predecessor, socialist former President Alberto Fernández, Russia was a key diplomatic and trade ally; Milei antagonized Moscow by inviting Ukrainian President Volodymyr Zelensky to his inauguration and publicly embracing him as an honored guest.
Буенос-Айрес. Зустрівся з Хав’єром Мілеєм та привітав його з офіційним вступом на посаду Президента Аргентини.
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) December 10, 2023
Сьогодні на площах і вулицях Буенос-Айреса дуже часто звучало слово «свобода» – libertad. І це поєднує нас – Україну та Аргентину. Ми справді цінуємо свободу, ми… pic.twitter.com/VGrNxEmHV2
Argentina’s new president Javier Milei (R) is greeted by Ukraine’s President Volodymyr Zelensky after delivering his inaugural speech before the crowd during an inauguration ceremony at the Congress in Buenos Aires on December 10, 2023. (Luis ROBAYO / AFP)
Milei has also referred to the Russian regime as a “murderer” and insisted he would redirect Argentine foreign policy towards America and Israel.
Putin addressed regime-friendly reporters for four hours on Thursday. The Russian leader has traditionally held an extensive end-of-year press conference addressing a wide variety of issues. One reporter asked Putin this year about Milei’s plan to dollarize, which he warned could erode the country’s sovereignty.
“Everyone knows the idea of the newly elected President of Argentina to switch to the dollar within the country. This is the sovereign decision of each country, but in Argentina, inflation, as far as I know, is at 143%,” Putin said, according to the Russian news agency Tass. “If today’s leadership in Argentina sees no other way out of the country’s well-known financial and economic problems, that is their prerogative.”
“But this is definitely a significant loss of sovereignty,” he concluded.
Putin discussed the concept of sovereignty in detail elsewhere in the press conference, claiming that, for Russia, “the main thing is to strengthen sovereignty.”
“Strengthening external sovereignty, let’s put it this way, requires boosting the country’s defense capabilities and security along its borders. It’s also about strengthening public sovereignty, which includes the unequivocal protection of the rights and freedoms of the country’s citizens,” he claimed, “as well as the development of our political system and parliamentarism. Finally, it entails efforts to ensure security in the fields of sovereignty and the economy.”
Russia is close to entering its second year of invading Ukraine, violating its sovereignty by attempting to annex a significant percentage of its territory. At home, Putin has repeatedly violated “public sovereignty” with mass arrests of anti-war protesters, political dissidents, Jehovah’s Witnesses, and others his regime deems undesirable.
SAINT PETERSBURG, RUSSIA – 2022/03/06: Police Officers detain a protestor during a demonstration against the Russian military operation in Ukraine. (Stringer/SOPA Images/LightRocket via Getty Images)
Milei’s plan to dollarize the Argentine economy does not involve mass arrests or the annexation of territory belonging to other countries. As Milei explained it throughout his campaign, the government would end price controls that artificially inflated the value of the Argentine peso and allow trade in U.S. dollars, which he contends would weaken the Argentine Central Bank and combat inflation. As of Wednesday, estimates suggest that Argentina is facing inflation rates nearing 150 percent, driving an unprecedented economic crisis in the country.
“Yes, we are going to dollarize the economy, we are going to close the central bank and put an end to the cancer of inflation,” Milei promised at the end of the last presidential debate in November.
Milei’s Economy Minister Luis Caputo announced the first series of measures to stymie the worsening economic crisis in the country on Tuesday, many of them intended to limit state spending. The Milei administration ended federal-level public works projects for at least a year and all state publicity campaigns for the same time frame. It also dramatically devalued the Argentine peso, down from the artificial rate of 366 pesos per dollar under the socialist government to 800 pesos per dollar, a step towards dollarization.
Javier Milei via Storyful“Since 2019, Argentina’s peso currency has been kept artificially strong by strict capital controls which create a wide gap between the official exchange rate of 366 per dollar and parallel rates as high as 1,000 per dollar,” Reuters explained on Tuesday.
Manuel Adorni, the presidential spokesman, described Argentina’s economy as a “patient in intensive care, about to die.”
Milei’s administration has focused heavily on the economy in its first days and has yet to make any major changes in foreign policy. The president, both as a lawmaker and television commentator, has been a harsh critic of Putin’s for years, insisting in interviews that he would not cut deals with Russia.
“I don’t make deals with murderers – not with China, not with North Korea, not with Russia, not with anyone who does not respect the free world,” Milei promised in February 2022, condemning Alberto Fernández for going on a world tour that included a stop in Moscow that month. Shortly after Fernández’s visit, Putin formally invaded Ukraine.
Milei made an almost identical vow in an interview with Tucker Carlson in September 2023.
“I am a defender of freedom, peace, and democracy. Communists have no place there. The Chinese have no place there. Putin has no place there. Let’s go further: Lula has no place there,” Milei asserted.
In contrast, during his visit to Moscow, Fernández announced that the threat to Argentina was the United States and the International Monetary Fund (IMF).
“I am consistently working to rid Argentina of this dependence on the IMF and the US. I want Argentina to open up new opportunities. Cooperation with Russia is vital for us,” Fernández said sitting alongside Putin in 2022.
The former president added, “I believe that Argentina could become Russia’s gateway to Latin America.”
Russian President Vladimir Putin (R) shakes hands with Argentinian President Alberto Fernandez (L) during their meeting at the Kremlin in Moscow on February 3, 2022. (SERGEI KARPUKHIN/SPUTNIK/AFP via Getty Images)
