Recently, the streets of Buenos Aires have been filled with angry crowds, more precisely, angry students and professors, who have marched through the streets to protest against Argentine President Millay's administration. According to statistics, about 1 million people took to the streets, making it the largest demonstration ever in Argentina.
You know, Argentina's education system has always been among the best in Latin America, and some public universities don't even cost money to get in. What drove them to the streets was that teachers' salaries and university funding had shrunk so badly that schools were about to close. The reason for all this is the economic shock therapy launched by Milley.
After coming to power, Milley chose to cut public spending in order to boost the flagging economy, cutting the budget of public universities by 71 percent. As a result, many universities are struggling to maintain even basic operations, let alone classes. In desperation, teachers took to the streets with textbooks to protest against Milley's administration.
And this scene is undoubtedly a blow to Milley. Because not long before the protests erupted, Milley had just announced that his economic shock therapy had created a world miracle. Because in terms of data alone, Argentina did run a fiscal surplus for two consecutive months, with a revenue of $320 million, something that no previous government has been able to do.
[Argentina's largest protest in history]
At the same time, Millet also promised the people that every penny would be used for the people, or returned through tax cuts, until Argentina's national finances were brought into line with the Western economy. But the people in the depths of the water and fire obviously can't wait so long. And Milley is thinking about the way of fiscal surplus, which is indeed a bit radical.
For example, he advocated the closure of several government ministries, including the central bank, health and education, and cut half of the original 18 ministries as soon as he took office. At the same time, he advocated the abolition of the local currency and the replacement of radical economic measures with the dollar. It is worth mentioning that he also advocated the removal of the health department, but at the last minute he decided to keep it, otherwise it would be teachers and doctors who would protest in the streets.
In fact, at the beginning of Milley's economic shock therapy, nearly 110 economists warned in an open letter that Milley's simple and crude approach to economic reform ignored the complexity of society. So in retrospect, although Milley brought Argentina's economy back to life, it was not a long-term solution at the expense of the public interest and the layoff of a large number of government employees.
But on the other hand, Milley inherited a mess that was indeed a troublesome affair, not only facing 150% inflation, but also a deficit treasury and $44 billion in arrears from the International Monetary Fund. Of course, there are also those who believe that the difficulties faced by Milley are only temporary, and that as long as normal fiscal growth can be maintained, sooner or later he will become rich and strong.
[Argentine President Milley slashes public spending]
Therefore, if Milley wants to calm the anger of the people, the most important point is to achieve economic growth and gradually increase public education spending. Coincidentally, just as the protests in Argentina intensified, Argentine Foreign Minister Mundino announced his visit to China, preparing to clarify misunderstandings with China and create conditions for the next practical cooperation.
According to what is known so far, Mondino will lead a luxurious delegation, including representatives from the Argentine export sector, which is expected to visit the cities of Beijing and Shanghai, as well as a series of extensive official cooperation and investment meetings with Chinese officials. The Argentine media also reported that Mondino's trip was aimed at seeking investment and strengthening trade relations with China.
If memory serves, when Milley was running for president, he repeatedly claimed that he wanted to distance himself from China and rejected the BRICS. But in a recent interview, Milley's tone has changed markedly, saying that he wants to take a more pragmatic approach to China.
[Argentine Foreign Minister Mundino will visit China]
According to public information, China is Argentina's second largest trading partner, accounting for 13.8% of Argentina's total foreign trade, and is also Argentina's third largest export market and second largest source of imports, accounting for 8% of Argentina's total exports and 19% of total imports, and is also Argentina's largest source of trade deficit. China's direct investment in Afghanistan is mainly concentrated in three major areas: infrastructure, energy and new energy industries.
So, to be fair, if Milley wants to completely change the structure of Argentina's economy and control inflation, he can't do without China's help. Argentina needs China's support in currency swaps, repayment of IMF loans, and sustained and steady growth of the domestic economy. Judging by the current situation, Argentina should have realized this.
The enlightenment of this incident is that economic reform is not only an adjustment of the economic structure or policies, but also takes into account the people-oriented. While reducing public spending can help governments reduce their fiscal deficits in the short term, it can also bring about a complex set of economic and social problems. So we need to make careful trade-offs when formulating such policies to ensure that short-term fiscal targets do not compromise long-term economic growth and social stability.