Entrevista exclusiva con Javier Milei: Davos 2026 Foro Económico Mundial

No, it's not as you state it. First of all, I want to highlight the enormous work of President Trump and Marco Rubio. First, in extracting the narco-dictator, murderer Maduro, who also dedicated himself to spreading terrorism throughout the entire region, financing campaigns, financing terrorist acts on the streets, making life difficult for all governments that were not of 21st-century socialism. Therefore, I broadly celebrate that situation. On the other hand, I think the plan designed by the United States government in three stages is very appropriate. The first stage has to do with stabilization, which is what we are going through right now. Then will come the reconstruction part, and then the transition to democracy will begin. What happens is that it would not be possible to do it any other way. The stabilization that they are doing now, those of us in America who have suffered and still suffer from the interference of the hordes of 21st-century socialism in the state structure, who basically work as thought police during 21st-century socialist administrations and act as spies when they are out of power and dedicate themselves to sabotaging governments of different signs. It is very difficult. If you think about that in Venezuela, that would be 100%. Therefore, believing that there is another possibility of managing the stabilization process is truly not understanding the limits of reality. So from my point of view, the work the United States is doing is excellent. Also, I think it is yielding results because what we are seeing is that the different political prisoners are being released, which we applaud, and we hope they finish releasing all political prisoners. We are particularly concerned about the situation of Nahuel Gallo, but as we see how the situation is evolving positively, we have hope that Nahuel can return to us in Argentina.

Look, the situation is that you have to understand that in the stabilization process, any alternative, the regime's own internal strength will make it fail. So from my point of view, what the United States has chosen to resolve the situation is correct, it is what can be done at this moment. That is, there will be time after reconstruction for the democratic transition, and at that point, we will see what decisions are made and how to advance in the democratization of Venezuela. That is aside from the enormous appreciation and esteem I have for Maria Corina, who is a friend and a great defender of freedom, but what you need is for this procedure to be successful, lest by rushing, we end up regressing.

The first thing to understand is that when you come to run a country, it's not that you start from zero. You have to face a history, and Argentina has a very bad history behind it. That is, Argentina has removed 13 zeros from its currency, had two hyperinflations without war. So there is a first problem regarding the currency in Argentina, and it is the mechanism by which agents form expectations. If one worked with a traditional rational expectations model that we all studied and celebrated Robert Lucas Jr. for, to the point that I named two of my four-legged little ones after him, so you can imagine that it's not something... No, I haven't heard them bark yet. I also have much more liberal versions of myself, but aside from that, what I want to point out is that in normal contexts of pressure and temperature, the price level in the economy would be governed by the quantity of money, and the exchange rate is just another price in the economy. Strictly speaking, we fixed the quantity of money in the middle of last year, sorry, in the middle of '24. And what we are suffering now are the effects of the lags of the monetary policy, the monetary disaster of the previous government, which issued 28 points of GDP, 13 in the last year to try to win the election. So what happens is that in Argentina, history, I say this in economic theory, is the Cantillon effect, the sequence that prices take. Suppose the following: you have a fall in money demand, that makes the exchange rate jump, that makes transable prices rise, then wholesale prices rise, then retail prices, and finally wages. If you have had that dynamic for nearly 90 years, it is very likely that people believe that if the exchange rate jumps, prices will jump. So I am not going to get angry with the way people form expectations because the truth is they have 90 years of reason. So in that sense, what we try to do is understand that people can form expectations that way, and we understand that volatility in the exchange rate can end up translating into volatility in the price level. Because suppose you have a change in relative prices, where transables become much more expensive, or a deterioration in the terms of trade, the exchange rate jumps. What will happen? Then prices will jump, the price level will become misaligned with the quantity of money, and you will put the economy into a recession. So we understand that problem of volatility. So the exchange rate within the band is free. It is free within the band, and the bands only function to show people that the exchange rate is not going to be worth anything, and in that way they learn to float, that is, they lose their fear of floating. So that is the role of the bands: to limit volatility, to say that anything cannot happen.

Look, strictly speaking, the issue of obtaining funds. The truth is that the only thing we should need in principle would be just to roll over, as a general framework. Why? Because Argentina has a zero deficit. In fact, the amount related to interest, Argentina pays with a surplus. That is the first point. On the other hand, with the fiscal sincerity law, we expect to boost and grow the domestic capital market. Consequently, the need to resort to funds in external markets will be less and less. In the worst case, the only thing we would be looking for in international markets is basically the rollover. And we think so because given Argentina's fundamentals, paying a spread or a country risk of 550 basis points seems clearly not aligned with our fundamentals. Therefore, since we have a very low debt-to-product ratio, because most of the debt is in the public sector, and we have fiscal balance, the truth is that we will need much less access to capital markets beyond the rollover, and with the development of the domestic market, we will be able to pay and reduce that exposure. It is not something that, given our fiscal performance, worries us too much. I would be more worried about having too little Argentina, I would say.

From my point of view, the approach that Scott Bessent made is perfectly in line with the thinking of the United States administration, which has to do with the issue of geopolitics. That is, the United States trades with China, and for us China is a great trading partner, and it implies a lot of opportunities to expand markets. So that is not in conflict. You see, when the geopolitical moment comes, you have doubts about where Argentina stands. And the United States does not have... That is not proven. China does. But look, let's put these issues aside. I govern for 47.5 million Argentines and I make the decisions that most favor Argentines. Part of that is that Argentina, which is a very closed country, the most closed in the world given its per capita GDP, should have a trade-to-GDP ratio close to 90%, a little over 90%, and it has 30%, strictly 28% if you want to be precise. Consequently, my plan is to open up to the European Union, to the United States, to China, and to others. I want an open economy, and that means, look at the weight of the Chinese economy in the world, and you will understand that I have to trade with China. Look at how India is evolving, and I have to trade with India. That is what I am working on: making Argentina clearly a more open country.

Look, when you design policy, and it was the central axis of my presentation yesterday, you design based on ethical and moral values. So explain to me why you would justify that Argentines, the vast majority of Argentines, have to pay more for goods that they could get cheaper. Because it is also false that this destroys jobs. That is one of the great lies of Keynesian economists who are ruining the whole planet, everything they touch they break. But when you open the economy, yes, some products will be cheaper, and you will lose jobs here, but that allows individuals to spend less money. For example, in Argentina a t-shirt used to cost $40, now it costs $5. Well, those $35 saved are spent in another sector and generate jobs elsewhere in the economy where individuals want them and have higher productivity. So when you open the economy, you will have a reallocation of resources, but you will have a productivity gain from greater division of labor and greater specialization. Because if the protectionist argument were true, then one day we would decide to close Argentina. I will follow an example from my brilliant, excellent, fabulous minister of regulation, in one of his books, which when I read it, I was a big fan of Federico. So he says, 'Well, let's close Argentina, then let's close the province of Buenos Aires, then let's close the federal capital, then let's close Palermo.' And if you continue like that, we will end up on a single block. You will reach a situation of total autarky, you will live alone. How will your life be? Miserable, because you will have to make your own sneakers, your own socks, your own suit, your own tie, your own shirt. How do you think you will live? Badly. So trade generates division of labor, that generates increasing returns, that generates increased productivity, that generates well-being. That is why more open countries are richer. Argentina is the most closed, so we have a lot to do.

I would never give the name of someone from the left. I love my dogs too much to insult them. That's why they all have names of liberal economists: Murray for Murray Rothbard, Milton for Milton Friedman, Robert for Robert Lucas Jr., and Conan as the original barbarian warrior. But aside from that, we have a mature relationship. This is not an ideological contest or a matter of papers. Here, the lives of millions of human beings are at stake. So if you look, we continue to advance. What we have done is given a lot of impetus and put a lot of pressure within Mercosur to become more flexible and dynamic. For example, signing the agreement with the European Union took 25 years, which is too long. The current world requires more speed, it requires moving faster. So that is why we have also pushed to work with much more flexibility. We have to adapt. This is not about what suits the bureaucrats, the warm-chair holders who earn tons of dollars to do nothing. For the bureaucrat, the result is nothing and the procedure is everything. For the people, what they need is results. So we work to generate results for the people. So anything that improves trade, we will do. I am not going to break anything, but everything I can do to gain more trade, I will do. If other countries decide to take other decisions, well, they are sovereign, they can do what they want. I work for the well-being of 47.5 million Argentines.

The decision of each people determines whether they want to continue with socialism, which in the long run, there is a phrase by Thomas Sowell that is phenomenal: 'Do you know what the best thing about socialism is? It sounds good. Do you know what the problem is? It always fails.' So each society will awaken to the light of the idea of freedom when it can. And I am optimistic that they will become aware that the best thing that can happen to them is to embrace freedom. We can show it with the example of Argentina. That is, we came with an inflation of 1.5% daily, we were heading to 17,000%. We stopped the fiscal deficit of 15 points of GDP, five in the treasury, we stopped it in the first month, something that you know is impossible, except for the best economy minister in the world, Toto Caputo, who is the best economy minister in Argentine history. In six months we fixed the fiscal deficit. And there we stopped the quantity of money. Inflation reached 300%, now it is at 30%. If you take wholesale, it is at 24, 25. That is, we put the public accounts in order. Everyone predicted a hyper-recession. However, Argentina hit a bottom in April and from there began to grow strongly. The latest data shows the economy growing at 4.2%. We have lifted 30% of the population out of poverty. We lifted 15 million people out of poverty. So what does this mean? That the free market works, that free market capitalism works. Do you know why? Because of the fundamentals I gave yesterday in my presentation in Davos. Because free enterprise capitalism is not only just, it is efficient and allows the economy to grow more. And this is built because when you design policies based on the ethical and moral values of the West, you prosper, and you also have social consensus because you are doing what is just. That is, one of the things you cannot do is kill justice on the altar of efficiency, whether it is Pareto efficiency or the efficiency of political calculation, of Machiavelli. That is why I said yesterday, Machiavelli is dead and we have to bury him. Because we are proving that when you design policies based on ethical and moral values and you do what is just, not what suits the political garbage that does electoral calculation, do you know what happens? Afterwards they support you. We got 41% of the votes, we beat Kirchnerism by 17 points, which in a general election would mean winning in the first round. And the latest polls show that Argentines, 62%, support the free market economy. You know what? It works and it is also just.

But for me it is a pleasure.