00:00 Sebastian Galeani is Professor of Economics at the University of Maryland and former Deputy
00:05 Treasury Minister in Argentina.
00:07 Well, I think it opens a possibility for the country. There is a question mark about how
00:14 Milay's government is going to be, especially given some of his extreme proposals and also
00:22 given that he doesn't have a majority in any of the chambers in Congress. But on the other
00:29 hand, we know that if Massa would have won the election, that would have been continuing
00:37 the decline of the country, corruption and bad economics. So it opens an opportunity.
00:43 Milay, like you, of course, is an economist. He's promising very radical economic reforms.
00:50 Are they going to work?
00:54 Well, that is the question mark, right? The country needs important reforms. The question
01:01 is whether he's going to get a coalition in Congress to pass that. The President Macri,
01:09 former President Macri, is supporting him, but still is not a large enough coalition.
01:15 So it's a question mark, right? We'll see. But we have to try it, I guess.
01:22 Argentina, of course, one of South America's biggest economies. I mean, for those who are
01:27 not experts like you in its economic history, how did it get into such a state of crisis?
01:35 Well, by following very leftist populist policies that distort incentives in the markets and
01:44 affecting exports and running very, very large fiscal deficits for decades and finance them
01:51 by printing money, creates very high inflation. And essentially, that's where we are now.
01:59 People got tired of all that and voted an outsider, a complete outsider, to try something
02:05 new because the traditional parties didn't solve the problem for decades.
02:11 He seems politically quite divisive now that the election or the rerun is now over. Do
02:17 you sense that the country will get behind him and what he perhaps might need to do?
02:24 The country was divided. It's not him. It's divided. There is a 40, 50 percent of the
02:30 population that wants really a change that is started to see inflation is running at
02:36 300 percent per year right now. There's a lot of corruption. Drug traffic is increasing.
02:45 So the country is not going well. And there are people that still support those leftist
02:51 policies. They benefit from them. But the country is very divided. It's not him.
02:57 Miele has suggested a loosening of ties with China. How's that relationship going to work?
03:05 No, I don't. I think he was misinterpreted or it is not going to happen. China is very
03:14 important for Argentine trade, like it is for every country that has natural resources.
03:22 So he probably was trying to signal that he's going to ally politically with the West. But
03:32 that doesn't mean there's not going to be trade with China or relations will be interrupted.
03:38 That's not going to happen.
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