{"text":[[{"start":7.76,"text":"Standing outside a giant tyre factory on the outskirts of Buenos Aires that shut down in February after 86 years, trade union leader Alejandro Crespo warns that this is the end of an era for Argentina."}],[{"start":19.96,"text":"“We have an epidemic of factory closures,” says Crespo, blaming surging imports. “This is a government which is not at all interested in factories.”"}],[{"start":29.2,"text":"Javier Milei, the political outsider elected as Argentina’s president in 2023, agrees that it is the end of an era — but he sees it as something to be welcomed. For the man who named his four dogs after libertarian economists, the closure of the factory, run by a company called Fate, is part of the transformation of the country’s economic model that he is trying to orchestrate."}],[{"start":52,"text":"Rather than propping up inefficient manufacturing companies, Milei wants to spark a boom in the export sectors where he believes Argentina can compete globally, including energy and mining."}],[{"start":63.12,"text":"“We think it is a good thing that the factory closed,” says Federico Sturzenegger, the minister for deregulation and one of the architects of the plan to liberalise the economy. “This is a company that for 40 years exerted political pressure in order to keep the tyres that we use three times more expensive than the world price.”"}],[{"start":80.92,"text":"For many, the idle factory is a symbol of the rapid opening up being pushed by Milei, whose firm belief in free markets sets him apart from US President Donald Trump and the other rightwing populist leaders with whom he is often bracketed."}],[{"start":94.16,"text":"Influenced by his admiration for Margaret Thatcher and Milton Friedman, his plan for Argentina resembles the neoliberalism that swept across Latin America in the 1990s — and which is now vocally repudiated by other populists."}],[{"start":107,"text":"The first part was to subdue runaway inflation through dramatic budget cuts, symbolised by Milei waving around a chainsaw — a stunt later copied by Elon Musk when he was looking to slash US public spending last year. The inflation rate has duly fallen from 289 per cent in early 2024 to 34 per cent."}],[{"start":null,"text":"

"}],[{"start":125.38,"text":"The second phase entails exposing Argentina to a sharp burst of foreign competition, which is creating winners and losers across the economy just a year ahead of Milei’s bid for re-election. Many of the losers are concentrated in the populous area around the capital."}],[{"start":140.52,"text":"For much of the last century, Argentina sought to build its own domestic market behind a wall of tariffs and subsidies — a project spearheaded by Juan Perón, the former military officer turned populist pioneer who first came to power in 1946."}],[{"start":155.76,"text":"Instead of selling beef to the rest of the world, Perón prioritised making tyres and other goods for Argentines, creating a new elite of homegrown industrialists and an urban working class led by government-aligned trade unions. Founded in 1940, the Fate factory was closely connected to that project: José Ber Gelbard, one of the company’s main shareholders in the 1960s and 1970s, served as Perón’s last economics minister."}],[{"start":183.12,"text":"Milei wants to dismantle the web of Peronist corporatism rather than promoting its national champions. In the process, he is also trying to redraw the economic map of Argentina."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":193,"text":"Perón’s model was focused on Greater Buenos Aires, which has a population of about 17mn. But the sectors Milei champions are in some cases more than 1,000 miles away — mining in the far north, or oil and gas production to the south in Patagonia. The government talks about millions of workers moving out from Buenos Aires to outlying provinces in the coming decades."}],[{"start":214.56,"text":"“Argentina was one of the most closed economies in the world,” he said in a recent speech in which he used Joseph Schumpeter’s famous term “creative destruction” three times. “In the 100 years before we came to power, Argentina was a declining country.” For Milei, the domestic-led model was the root cause of decades of economic instability and a source of massive corruption."}],[{"start":236.28,"text":"However, his bet on free trade is starting to face significant economic and political opposition. Last week’s nationalistic speech on the Falkland Islands, a popular rallying cry in Argentina, is partly a reflection of how he is on the defensive politically."}],[{"start":251.28,"text":"Complaints from manufacturers, which have been shedding jobs in the face of surging imports, are growing louder. Some claim the currency is overvalued in order to curb inflation; others say Chinese producers are using Argentina as a dumping ground for their surplus output."}],[{"start":null,"text":""}],[{"start":266.12,"text":"With real incomes being squeezed in part by government austerity, public opinion has also started to turn against the government, creating a potential opening for a challenger to Milei."}],[{"start":276.08,"text":"In common with other liberalisation drives over the last eight decades, Milei’s project is running into the economic and political heft of Buenos Aires, where almost 40 per cent of Argentine voters live."}],[{"start":286.48,"text":"“There are no other jobs at the moment,” says Rodrigo Ambrosio, 56, who worked in the Fate tyre factory for 23 years. He is surviving through occasional painting jobs and driving for Uber. “Oil? Mining? They don’t create many jobs.”"}],[{"start":301.62,"text":"But Milei is digging in. He claims that much of the criticism comes from either his Peronist opponents or vested interests that expect the state to keep bailing them out."}],[{"start":310.96,"text":"As he bluntly put it last month: “The son-of-a-bitch crony capitalists need to go bankrupt.”"}],[{"start":311.46,"text":"From beef to oil"}],[{"start":316.32,"text":"Until the 1930s and the Depression, Argentina was primarily an agricultural exporter, famous for its frozen beef."}],[{"start":324.64,"text":"Under Milei’s plan for a new export-led model, agriculture is still important — in addition to cattle, the country is one of the world’s biggest producers of soyabeans. But two other export sectors are also now beginning to boom: oil and gas and mining."}],[{"start":339,"text":"In April, Congress passed a law that could provide a major impetus to the mining sector by reducing what the government says were excessive restrictions on projects near the country’s many glaciers."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":349.24,"text":"Environmental groups say the new law could endanger the water supply to a number of cities. However, local politicians and mining executives say it lays the groundwork for a wave of new investment."}],[{"start":358.68,"text":"“Argentina has a lot of the resources that the world needs at the moment,” says Carlos Sadir, governor of Jujuy, a province high in the Andes on the border with Bolivia that has rich deposits of copper, silver and lithium."}],[{"start":370.52,"text":"Martín Pérez de Solay, head of the mining conglomerate Glencore in Argentina, says the country has seven mining projects under way that are “world-class” and believes the country could bring on new annual supply of 1.5mn-2mn tonnes of copper over the next decade — about a third of the output of neighbouring Chile, which is the world’s largest producer."}],[{"start":392.88,"text":"The boom in oil and gas is already under way. The US government estimates that Argentina has the second-largest reserves of shale gas in the world, most of it in the Vaca Muerta formation in the Neuquén Basin in the south of the country."}],[{"start":408.4,"text":"Investment is accelerating sharply, partly as a result of a new legal framework introduced in 2024 that provides tax breaks and other incentives. Wood Mackenzie, the energy consultancy, estimates that the pipeline of new projects now exceeds $100bn. “Argentina is on the cusp of a shale revolution,” it says, comparing the atmosphere to west Texas in the early 2010s, at the start of the US shale boom."}],[{"start":435.12,"text":"Exports in mining, energy and agriculture have already increased to record levels under Milei, beginning to ease the dollar shortage that has underpinned Argentina’s chronic economic instability."}],[{"start":446.28,"text":"Sturzenegger says that the cumulative impact of recent investments will allow Argentina to triple its exports in the next five to six years. “For the first time in my professional life I see Argentina starting a growth process that is export-led,” he says."}],[{"start":461.88,"text":"Back to the provinces"}],[{"start":463.5,"text":"The excitement among resources companies, however, is mirrored by rising pessimism among the domestic-facing industries that employ millions of Argentines."}],[{"start":472.28,"text":"Manufacturing, construction and retail have all contracted or stalled under Milei even though economists surveyed by the central bank predict the economy will grow 2.1 per cent in 2026."}],[{"start":485.2,"text":"According to government figures, about 3,400 manufacturing businesses have closed since late 2023 — more than 10 per cent of the total. In the formal labour market, over 240,000 jobs have been lost, a fall of nearly 4 per cent, although this drop has partly been offset by growth in the informal labour market where employees have minimal protections."}],[{"start":505.12,"text":"Textiles have been one of the hardest-hit industries, as Milei’s tariff cuts open Argentina to a flood of cheaper foreign clothing, including via Chinese ecommerce sites such as Shein and Temu."}],[{"start":518.28,"text":"Will Der, which used to make clothes for brands such as Adidas and Puma, closed its two factories in August. The company had been so desperate for new customers that it offered to make overalls for the new mining companies."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":531.22,"text":"“The orders just disappeared,” Santiago Phelan, a former captain of the Argentina rugby team who was president of the company, told local media."}],[{"start":539.92,"text":"The owner of a large textiles business in Buenos Aires says the government has set companies like his up to fail by opening them to competition from imports without dismantling the high taxes and cost structures put in place under the protectionist Peronist model."}],[{"start":554.64,"text":"“My factories are competitive, it is the taxes that are killing us,” says the executive, who did not want to be named for fear of attracting the wrath of Milei, who has clashed with a number of business owners. He has cut his staff by half over the past year, he adds. “We’re just hoping Milei’s government ends before we die off completely.”"}],[{"start":574.56,"text":"Martín Rappallini, head of the Argentina Industrial Union, says that Argentine companies face an annual tax take equivalent to 56 per cent of the formal economy, the highest burden in Latin America. A surge in contraband and dumping by other countries and limited access to finance are adding to their problems."}],[{"start":593.48,"text":"He is urging the government to construct a “bridge” that will allow manufacturers to survive the transition to the new free-trade model. “We want Argentina to have a more normal, open economy and we are not asking for protection, but we have been left carrying all the stones from the past,” he says."}],[{"start":610.28,"text":"Many industrialists argue that the government is still in the game of picking winners but this time favouring industries such as energy and mining. “It is not economic liberalism for a government official to decide — ‘no, this sector is not going to work, but this other one will’,” says Rappallini. “Give us the conditions to compete on equal terms and then the market will decide who survives and who does not.”"}],[{"start":null,"text":""}],[{"start":631.76,"text":"The government sees many of these complaints as special pleading. Milei is particularly dismissive: “You have to be very stupid to say that investment is taking place in sectors that do not generate jobs,” he says, because money earned by workers in Vaca Muerta will be spent in the wider economy."}],[{"start":648.52,"text":"Sturzenegger says that access to cheap energy from shale oil and gas will lead to a new “industrial boom”, which could include sectors such as fertilisers and petrochemicals. “Just as the US reindustrialised as a result of the Permian Basin in Texas, there is no reason not to think that something similar will happen here,” he says."}],[{"start":668.32,"text":"In the long run, he estimates that about 4mn people will leave the Buenos Aires area over the next 30 years — with 2mn decamping to the oil and gas region in Patagonia and another 2mn heading for the mining region in the north."}],[{"start":681.88,"text":"“In the second half of the 20th century, there was a big migration from the interior to Greater Buenos Aires at a time when Argentina was one of the most closed economies in the world,” he says."}],[{"start":692.08,"text":"“This process is exactly the opposite; it opens up the economy and generates competitiveness from exports and the population gradually reverts to the interior.”"}],[{"start":701.92,"text":"‘Worst is still to come’"}],[{"start":703.42,"text":"To secure such a long-term agenda, Milei needs to win re-election in October 2027. His big advantage is that the Peronist opposition remains in disarray and there is no obvious challenger to take him on."}],[{"start":716.12,"text":"But political analysts are picking up alarming signs of pessimism among many voters. According to a recent poll by Trespuntozero, 77 per cent of voters believe the country is still in an “economic crisis”. Even worse for the government, 84 per cent believe “the worst is still to come”."}],[{"start":null,"text":""}],[{"start":732.52,"text":"“The mood among voters today is in favour of a change of government,” says Shila Vilker, director of Trespuntozero. “The government can shift that sentiment, but they need to do something and they need to hurry.”"}],[{"start":743.52,"text":"Real wages have failed to fully recover from a sharp drop in 2023, when inflation surged into the triple digits. Disposable incomes have fared even worse as Milei has scrapped subsidies for energy, water and transport, falling 17 per cent in real terms since early 2023, according to think-tank Equilibra."}],[{"start":764.92,"text":"Milei, determined to protect his flagship progress on inflation, has ruled out any fiscal measures to boost the economy ahead of next year’s election, saying in August that “populism isn’t defeated through populism”."}],[{"start":778.48,"text":"Some analysts believe Milei’s confrontational style, which worked so well for him as an insurgent challenger, could become a liability as people start to blame the government for hardship. At an event in August he mocked his critics, putting on a taunting voice to repeat the often-used phrase “people can’t make ends meet”, which he called “stupidity”."}],[{"start":798.44,"text":"The impasse between Milei’s vision for Argentina and the stubborn reality of the economy today is on full display at the Fate tyre factory, where some of the 920 workers who lost their jobs have maintained a constant vigil since it closed in February."}],[{"start":813.84,"text":"Their aim is to keep the possibility of a reopening alive, since the union believes the factory has been profitable and only closed as part of a wider dispute between the government and Fate’s owner."}],[{"start":825,"text":"Crespo, the union’s leader, doubts that Milei’s plan can replace the jobs being lost. “Industrialisation should generate lots of skilled, manual jobs with respectable salaries . . . what Milei is suggesting is not sustainable,” he says."}],[{"start":840.44,"text":"Even Milei himself sees the trade-off. Speaking about the factory, he said: “If you look at it in utilitarian terms, I have 47mn Argentines who are benefiting and I have 920 who are losing out.” But he also acknowledged that this was not necessarily “fair” on those workers."}],[{"start":858.36,"text":"One of them is Carlos Romero, a 59-year-old who spent 30 years working at the factory and now helps maintain the vigil there. He says he and others have nowhere else to go."}],[{"start":868.48,"text":"“Are we really expected to migrate with the whole family, to move 800km or more,” he asks, “to look for work somewhere where there might not be any jobs?”"}],[{"start":882.68,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789029984_1380.mp3"}