Just recently, Milley, the "Chainsaw President", began to reform in the political and economic spheres in a big way. The target was redundant government personnel, which laid off 85 percent of the former women's ministry and nearly 5,000 people in this wave of layoffs.
At the same time, Milley has also invested heavily in lithium mining. According to reports, four lithium projects in Argentina will be put into production in the future. However, the previous government has already done this, and the result has been that it has had little effect, and it remains to be seen what effect Milley can achieve this time.
But what is certain is that Argentina is in dire need of lithium mining to get itself out of the economic crisis and, in the coming year, to pay off China's debt.
In my view, Argentina's massive layoffs and investment in the lithium industry is not just a simple economic adjustment, but a deep purge of the Argentine political system, and Milley's ambitions are clear: he aspires to establish a new image of economic power on the South American continent, and the ultimate goal of all this is to pay off the heavy foreign debt.
Previously, China, the big country in the East, reached out to Argentina at a critical moment. Not only did it delay Argentina's debt repayment deadlines, but it also expanded the currency trade agreement between the two countries, providing a valuable window of time for Argentina's economic transformation. China's support is not just financial assistance, but also a strategic guide to teach Argentina how to become a "normal country" and how to find its place on the global economic stage.
However, just as Argentina was preparing to embrace the development opportunities offered by China, the United States made an unusual noise. They warned that lithium mining in Argentina could lead to overcapacity in the global lithium market, posing a threat to global economic stability. This criticism has undoubtedly cast a shadow of uncertainty over Argentina's path to reform.
Still, Argentina does not seem to have fully followed China's advice, opting instead for a more radical path, seeking a breakthrough by streamlining government agencies and subverting the political landscape. Such an approach may have immediate results in the short term, but in the long run, such radical strategies of change are likely to spark a backlash and sow the seeds of social unrest. It can be seen that Argentina is about to change.
If I want to say what kind of influence this series of events in Argentina has had on us, I would like to mention one point here.
During Milley's past election campaign, he promised to slash the central government sector, a promise he made on his first day in office. In addition, I note that Milley has also promised to adopt the so-called "economic shock therapy", in which he intends to burn mismanaged central banks, abolish the peso and fully shift to "dollarization". That's a big impact on us.
Originally, we thought that by extending the currency trade agreement, Argentina could use more RMB settlements in international trade. This will not only reduce transaction costs, but also promote the rapid growth of trade between the two countries and inject new vitality into the Argentine economy.
This is undoubtedly a milestone in the internationalization of the RMB. And as more and more countries and regions adopt the settlement method of RMB in trade, the acceptance and liquidity of RMB as an international currency will be significantly enhanced, which is undoubtedly a good thing for us.
But Milley is likely to turn to a full-fledged "dollarization" move, which betrays our good intentions. When Argentina is about to change dramatically, we need to be careful about whether to give a helping hand to such a country.