Milei's Election Win Signals Argentinian Desire for Radical Reform, But His Dollarization Plan Faces Hurdles
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Javier Milei's victory in Argentina's election suggests voters want radical economic reform to address high inflation and poverty. His plan is to abolish the peso and adopt the US dollar.
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Abandoning the peso raises concerns about loss of monetary control and ability to obtain sufficient dollar reserves. Past dollar-pegging ended in crisis.
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Technical hurdles exist to implementing dollarization and it could lock Argentina into an unsustainable course if it backfires.
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Critics say dollarization could make things even worse. Milei's plans include unpopular welfare cuts likely to trigger backlash.
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Milei did not mention dollarization in his victory speech, prompting speculation he could back away from his most radical proposal. Politics may become highly polarized.