'A campaign ad disguised as policy' Is the US interfering in Argentina's elections? | DW News

Key Concepts

• Argentina's Economic Crisis: Persistent instability, high unemployment, and inflation.
• Javier Milei's Free Market Reforms: Policies aimed at stabilizing the economy, facing domestic roadblocks.
• US Economic Lifeline: A $20 billion aid package provided by the US to Argentina.
• Midterm Elections (Argentina): Upcoming congressional elections on October 26th, serving as a legislative test for President Milei's party.
• Political Intervention: Direct involvement by one country in the internal political affairs of another.
• US Foreign Policy in Latin America: Focus on regional stability, countering rival influences, and securing strategic resources.
• Geopolitical Competition: Specifically, the US effort to prevent Argentina from "sliding into the orbit of China."
• Strategic Minerals: Lithium and copper, critical resources found in Argentina, of interest to the US.
• Economic Leverage: Using financial aid as a tool to exert political influence and achieve strategic objectives.

Context: Argentina's Economic and Political Landscape

Argentina's President Javier Milei is currently under significant domestic pressure due to rising unemployment and corruption allegations. He came to power with a promise to stabilize the country's "notoriously shaky economy" through free market reforms. However, these reforms have encountered roadblocks, notably after his party lost a provincial election, leading to a plunge in the Argentine peso. The country is now facing nationwide midterm elections later this month, specifically on October 26th, which, while not presidential, represent Milei's "first real legislative test."

The $20 Billion US Economic Lifeline

The US has agreed to provide Argentina with a substantial $20 billion economic lifeline. This aid package was announced just days before Argentina's crucial midterm elections and coincided with President Milei's meeting with Donald Trump in the White House.

Donald Trump's Stance and Political Intervention

During his meeting with President Milei, Donald Trump explicitly linked the aid package to the outcome of Argentina's upcoming midterm elections. He stated, "our approvals are somewhat subject to who wins the election because if a socialist or in the case of New York City, a communist wins, you feel a lot differently about making an investment." Trump further elaborated that if a candidate with "no chance of ever having a great economy because of that philosophy" wins, the US "would put a halt to what we're doing."

Carl Mitchem, CEO of Global Americans (a think tank focusing on US foreign policy in Latin America) and former senior staffer for Latin America on the Senate Foreign Relations Committee, characterized this as "blatant political intervention from the US." He noted the timing, less than two weeks before the midterms, and described the bailout as a "campaign ad disguised as policy." Mitchem argued that Washington is "picking sides," and leaders across the region will perceive this as direct political intervention, a perception that "will linger." He also highlighted that such bailouts are typically seen from the International Monetary Fund (IMF) and are often unpopular.

US Interests and Strategic Motivations

Washington's official rationale for the bailout centers on "stability and strategy," aiming to prevent Argentina from "sliding into crisis." However, deeper strategic interests are at play. The aid is intended to "stop Argentina from sliding into the orbit of China," allowing the US to "regain influence," "protect access to lithium and copper," and "show that the United States is back in the region." Treasury Secretary Bent was quoted stating that "it's better to build an economic bridge with allies than to shoot at narco gunboats," referencing recent events in the Caribbean and underscoring a preference for economic engagement over military action.

While there are no explicit minerals agreements tied directly to this bailout, it is "widely understood and known that Argentina is a big supplier of lithium, a big supplier of copper," both of which are of significant interest to the United States.

The Nature of the Bailout: Leverage, Not Charity

Carl Mitchem emphasized that the $20 billion aid "isn't charity. This is definitely leverage." He explained that a stable Argentina helps Washington "showcase economic power as a substitute for military intervention." The assumption is that the bailout will help President Milei by "buying him time." However, it is uncertain if it will "get him the affection of Argentines," as "markets may calm, but voters are still hurting." Mitchem pointed out that "a bailout can't just fix inflation and the prices at grocery stores." The US Treasury's readiness to take "whatever exceptional measures are warranted" is considered "pretty extraordinary for a foreign country" in the context of its midterm elections.

Implications and Risks

The situation is described as a "high stakes gamble" linking the two leaders, with US taxpayers "footing the bill." If Milei's party performs well in the midterms, Trump "can claim victory." Conversely, if Milei loses, Trump "is just going to walk away," as he has "already said so," leaving Argentina "pretty much right back where it started. Short on dollars, long on uncertainty."

Synthesis/Conclusion

The $20 billion US economic lifeline to Argentina is a multifaceted initiative deeply embedded in both Argentina's domestic political struggles and broader US geopolitical objectives. While presented as a measure for economic stability, its timing and Donald Trump's explicit statements reveal a strong political dimension, widely interpreted as direct intervention in Argentina's upcoming midterm elections. Beyond supporting President Milei, the aid serves critical US strategic interests, including countering China's growing influence in Latin America and securing access to vital resources like lithium and copper. This financial assistance acts as a form of leverage, aiming to showcase US economic power and reassert its regional presence. However, its effectiveness in genuinely stabilizing Argentina's economy and winning over its voters remains uncertain, making it a significant political and economic gamble with potentially high stakes for both nations.