Musk is “extremely interested” in Argentina’s vast lithium deposits, according to Milei. So too, apparently, is the US Government and many other US companies. Milei will happily oblige.
Argentina’s President Javier Milei has been in power for less than a month but he is already causing quite a stir. The omnibus bill his government has sent to the National Congress will, if passed, have major ramifications for the economy, politics and society. Workers’ rights will be pulverised; up to 41 state-owned companies, including the YPF oil company, will be privatised; the right to protest will be severely curtailed; taxes will increase, especially for the working and middle classes; public salaries, pensions and other benefits will be frozen as official annual inflation reaches 220%; and environmental laws and regulators will be put to the chainsaw.
This is austerity not on steroids but on angel dust. Rather than reverting Argentina’s decades-long economic malaise, it is likely to make it a whole lot worse.
The government says there is no money to maintain public spending while continuing to service the country’s odious debt, which was largely a legacy of the disastrous economic policies of the former Macri government (2015-19), one of whose architects, former JP Morgan Chase banker Luis Caputo, is now Milei’s economy minister. Meanwhile, there is still no mention of replacing the peso with the dollar, presumably because Argentina’s government has no dollars to speak of, or doing away with Argentina’s central bank, which were two of the main planks of Milei’s election campaign.
In total, the government proposes to reform, eliminate or add 664 legal articles. They include a proposal to empower the executive branch to “authorize the entry into the country of troops and equipment of foreign armed forces for the purpose of exercises, training or protocol activities” as well as the deployment of Argentine forces abroad. Until now, such movements have needed the approval of Congress. Just as recently happened in Peru and Ecuador, Argentina could be about to fling its doors open to US and other foreign military forces. Given Milei’s geopolitical affinities, those forces will presumably include NATO’s and Israel’s.
The omnibus bill, bearing the Orwellian title of “Law of Bases and Starting Points for the Freedom of Argentines,” comes a week after Milei passed the highly controversial Necessity and Urgency Decree, which came into force today (Jan 2, 2024). If the legislators in Congress approve the bill (still a big “IF” given how few MPs Milei’s Freedom Advances party has in the chamber), his government will be able to declare a public emergency in the economic, financial, fiscal, social, pension, security, defence, tariff, energy, health and social domains until at least December 31, 2025. Any declared emergency may be extended for a further two years, essentially covering Milei’s entire mandate.
Opening the Skies for Starlink
One potential beneficiary of the proposed reforms is the world’s richest man, Elon Musk, who has already rubbed shoulders with Milei on X, the social media platform formerly known as Twitter that Musk owns. Milei was one of the first guests on Tucker Carlson’s new show on X, which captured global attention with over 300 million screenings in 24 hours. Now, Milei wants to forge closer ties with the South African-born billionaire.
Musk’s satellite Internet service provider, Starlink, was the only private business Milei mentioned during his 15-minute speech announcing the reform program. From BA Times:
Among the 30 measures which the head of state announced by national broadcast was the de-regulation of satellite Internet services, in order to “allow for competition of foreign companies, such as Starlink,.”
Starlink is the satellite network run by tycoon Elon Musk, with whom Milei has a good relationship. Dys before the presidential inauguration, Milei acknowledged on social networks that he had had shared a “great conversation” with Musk.
Back then, Milei publicly thanked the businessman for his support on “X” (formerly Twitter, also owned by Musk): “I thanked him for defending the ideas of freedom and for supporting our work, especially taking into account all of which he represents as an icon for freedom worldwide.”
The head of state then dangled the possibility of a visit by Musk in 2024: “We stayed in touch for him to visit Argentina next year and to keep on bonding and working together.”
Argentina is one of surprisingly few countries in Latin America that haven’t signed on to Starlink’s services, the others being Venezuela, Bolivia, Paraguay, Uruguay, Guyana, Suriname Costa Rica, Nicaragua, Honduras, Belize and, of course, Cuba. In the map below (courtesy of Wikipedia), the countries in green have approved and activated the company’s services.
The Lithium Trail
The opening of Argentinean space to Starlink is not the only way Musk stands to benefit from Milei’s proposed reforms. In a televised interview last Saturday (Dec 24) Milei was barely able to suppress his excitement that Musk had called him personally. The billionaire had told Milei that he is “extremely interested” in the country’s lithium. So too, apparently, is the United States Government, and many US companies in the United States, but they all need a legal framework that respects property rights.
Mirta: We have a lot of lithium in Jujuy.
Milei: You know what? Elon Musk called me. He is hugely interested in the lithium. Same goes for the US government. They just want to have property rights guaranteed.
The quiet part out loud. #Argentina
— taseenb (@taseenb) December 24, 2023
Lithium is a critical component of the green energy transition plans of advanced economies like China, the US and the EU. Also known as “the new oil,” the metal is used to make the lithium-ion batteries that power electric vehicles (EVs), smartphones, and wearables, though they could soon face stiff competition from alternatives such as sodium-ion batteries.
As regular readers know, Argentina is one of three South American nations (the others being Bolivia and Chile) whose borders intersect in the vast salt flat basins that have come to be known as “the lithium triangle.” This area not only accounts for roughly two-thirds of the world’s known reserves of lithium; its lithium is also much easier to extract than many other deposits.
The US has not exactly been shy about its interest in the region, not to mention all the other strategic resources Latin America boasts (rare earth minerals, oil and gas, fresh water…). Here’s the General of US Southern Command Laura Richardson speaking at the Atlantic Council almost exactly a year ago about the need for the US government and military to step up their game in the race for resources and influence in the region:
Rare earth elements, lithium, oil, light sweet crude, copper, gold, the Amazon, and fresh water.
This is what the United States wants to plunder from Latin America and the Caribbean. pic.twitter.com/Q9Rh5XP0jB
— Kawsachun News (@KawsachunNews) January 21, 2023
A 2021 report by the Washington-based Center for Strategic and International Studies (CSIS) laid out why the US sees Argentina as the most promising of the three Lithium Triangle countries. Here is a machine-translated excerpt about the report from an article in the Argentine newspaper Página 12:
“Argentina has the second largest lithium reserves in the world and is the fourth largest producer of lithium carbonate, behind Australia, Chile and China, and contributed 6 percent to the world supply with 33,000 metric tons in 2021,” says Andrew Sady in his report [for CSIS]. “Of the Latin American countries that have lithium reserves, Argentina’s market is most open to private sector investment… The federal government has not imposed any regulation on foreign investment in the lithium sector and allows the market to dictate the development of the industry.” For this reason, “several projections and experts agree that, within the next decade, [Argentina] is expected to be the country that implements the largest additional production of lithium. Benchmark Mineral Intelligence forecasts an increase of 360% by 2025.”
But there are a number of constraints on foreign mining activity in Argentina. What’s more, the management of rural land use is primarily the domain of provincial governments, not the federal state.
Since 2011, Argentina’s Rural Land Law (No. 26737) has set a limit of 15% on foreign land ownership in specified regions of the country while requiring that “rural land with the same foreign owner must not exceed 1,000 hectares in an arable zone.” The law also imposed a 4.5% limit on the total amount of rural lands that can be owned by foreign individuals or legal entities from the same country (as of July 2013, around 1.13% of the rural lands was owned by American investors).
In 2016, the Macri government loosened these rules to encourage foreign investment. If the Milei government’s omnibus is passed, it will do away with most, if not all, of the restrictions. This will have major implications for local indigenous communities, which are already bearing the brunt of the environmental damage caused by lithium mining, reports Pagina 12:
“When Milei talks about Elon Musk and lithium, we must keep in mind the rights of indigenous peoples and their right to prior, free and informed consultation as well as their right to decide about how their territories are managed… Florencia Gómez, a former director of the National Registry of Rural Lands, recalls that there has been a injunction in the Supreme Court since 2019 brought by “the communities of Salinas Grandes and Laguna de Guayatayoc together with the Environment and Natural Resources Foundation, which have warned about the irreversible damage that lithium and borate mining will cause.”
For mining companies, the opportunities will be rich and plentiful if Milei gets his way. Until recently, many parts of Latin America were witnessing a revival of resource nationalism. In February 2022, we reported that countries in the region were taking greater control of the revenues generated by the minerals and hydrocarbons produced within their borders, in particular when it came to lithium. There were also growing calls from workers, unions and indigenous communities for companies not only to mine but also to process and industrialise the white metal, where most of the real money is made.
Now, the opposite is happening, not just in Argentina but also Peru where the Dina Boluarte government has been quick to privatise the country’s lithium interests following the toppling of the democratically elected President Pedro Castillo just over a year ago. In Argentina, the environmental toll is likely to be brutal as the government takes a chainsaw to regulations on most forms of productive activities in protected ecosystems. From El País:
In environmental matters, the omnibus law – as it was called due to the wide variety of regulations that it repeals, transforms and creates – plans to modify the Glacier Law, passed in 2010, to allow mining activity in periglacial areas; the Native Forest Protection Law of 2007, to authorize deforestation in areas where it is currently prohibited or restricted; and the Environmental Protection Law for the Control of Burning Activities, to grant permits to start fires for productive or real estate purposes, which until now are heavily restricted or prohibited, depending on the area.
Lawyer Enrique Viale, a specialist in environmental law and author of the book The Ecological Collapse Has Already Arrived, warned that the reform is a “direct attack on the core laws of environmental protection,” and considered that it is the “gateway to big business.” “The modification of the Glaciers law is a long-held aspiration of transnational mining companies.”
For the moment, Elon Musk himself is staying shtum on the subject of Argentina’s lithium reserves. Perhaps he has learned a lesson in corporate diplomacy from the blowback he generated with his infamous July 24, 2020 tweet in which he smugly announced that “We will coup whoever we want” — a clear reference to the removal in late 2019 of Bolivia’s democratically elected President Evo Morales by the Bolivian military, at the behest of Bolivia’s far right and the United States government.
At the beginning of last year, General Laura Richardson made it abundantly clear in a speech to the Atlantic Council that the US government and military, and the corporations whose interests they faithfully serve, have their sights set on the strategic resources of South America, including rare earth elements, lithium, gold, oil, natural gas, light sweet crude (huge deposits of which have been found off the coast of Guyana, where the drums of war are growing louder), copper, abundant food crops, and fresh water.
The ultimate goal, she said, is to “box out” China, which dominates the global supply chain for lithium-ion batteries and is now South America’s largest trading partner and the second largest for Latin America as a whole, and Russia from those resources. The election of Milei, who has already withdrawn Argentina’s membership from the BRICS-plus grouping and now seeks to open up Argentina for Western trade, investment and military partnerships, is undoubtedly a step in that direction. Whether it lasts, only time will tell.
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What is “schlum”?
Schtum or shtum is Yiddish for keeping quiet.
Strunk and White, “Never use a foreign word when an English word will do.”
Unless you are trying to pretend you are a cosmopolitan to impress your PMC friends.
https://en.wikipedia.org/wiki/The_Elements_of_Style
Just like the sportscaster – more than one of those richard heads use trickation when they can say trickery. Morons!
The word shtum is recognised by the Oxford English Dictionary, which as far as I’m concerned makes it an English (as in UK English) word, not just a “foreign” one. A few other examples of Yiddish words that have made their way into the English language: bagel, kosher, bupkis, chutzpah, maven, putz, Schmooze, schmuck, schmutz, schtick, spiel… So by your rules, I can’t use any of those words either?
Nick Corbishley,
You have written a fine, fine post; a necessary post.
The irony of Tim’s post seems to escape him. He pulls out his Strunk and White quote to disparage the author of this post; I wonder who he is trying to impress?
He seems to assume that English is the center of the universe and that NC visitors all come from countries where English is the primary language. All I can say to that is “nyet!” I’m not put off by “foreign” words, and I’d venture to guess most of my compadres on this site aren’t either.
Schtum is solidly established in UK English vocabulary; it’s certainly not restricted to the Jewish community.
As Biff Tannen said in “Back to the Future 2” – ‘There’s something very familiar about all this.’ Took till tonight until I realized that this is the Miracle of Chile 2.0-
https://en.wikipedia.org/wiki/Miracle_of_Chile
After the US had gotten their guy – General Augusto Pinochet – into power back in 1972, the guy was naive enough to let in the Chicago Boys to revamp the Chilean economy into their version of neoliberal paradise. of course in less than ten years the economy collapsed but people like Milton Friedman walked away from the reputational damage until their next opportunity turned up – which was Russia in the 90s. And we all know how that worked out.
So I regret to say that Javier Milei will do the same for Argentina and let the ideologues run the roost and try out their neoliberal ideas while he uses the US military to protect him and his regime. I should email Wikipedia and have them open up a new page called the “Miracle of Argentina” as they will be needing it. I suspect that he too will run his country into the ground within a decade and leave it in a worse mess than ever but he will probably use the same methods to keep control that Pinochet used.
Milei’s embrace of Starlink is also suspicious in that I note that most of the countries that have approved and activated Starlink are those of the Collective West. Something tells me that before long , NC will need a new entry for ‘Topics’ on their home page – Argentina. The place is going to be a mess. If proven wrong I will gladly apologize but I won’t be holding my breath.
Unfortunately, you’re probably right about this Kev. I wonder what South America will look like in the next decade.
I live in the Tennessee Valley of Appalachia. We have a particular Congressman, Tim Burchett who identifies with and lauds “Conservative Libertarians” perhaps under the influence of Rand Paul whose whole career has comprised government grift. I found it interesting that Milei calls himself a Libertarian and is put Argentina for sale, apparently to his sponsors..
I wondering if “Libertarians” will promote the sale of TVA to some billionare to create a basis for the billionaires generational wealth.
I am also beginning to suspect Libertarian is just a euphemism for predatory capitalist.
Back in the Presidential election of 1964. Goldwater loudly and proudly called for selling all TVA assets to private investors. He lost the State of Tennessee and I think he lost several other ” TVA Country” states.
I get that Milei is not everbody’s coup of tea, but Argentina didn’t fall from grace just now by electing the guy. You are afraid he will run the place to the ground? Argentina has been steadily going to heck for a while now (just a different set of ideologues running the show), and electing Milei should be understood as an attempt to change course.
Will it work? No idea, but it is important to remember that Argentina does not begin with Milei. He’s been handled a hot turd, and now he gets to write another chapter of their history.
Exactly. It’s a quarter of a century of extremely mismanagement by both left and right and I dare say the leftist peronistas did a much worse job and stayed in power for much longer.
.
Why are people decrying Chile? It’s one of the best, more stable, richest countries in LatAm and this all thanks to Pinochet. Lol. I bet those people never set foot in LatAm.
“It’s one of the best, more stable, richest countries in LatAm and this all thanks to Pinochet…”
Among Brazil, Argentina, Chile, Mexico and the US, Chile only became the fastest growing in 1996. Pinochet was president from December 1974, up to March 1990:
https://fred.stlouisfed.org/graph/?g=19nE1
August 4, 2014
Real per capita Gross Domestic Product for Brazil, Argentina, Chile, Mexico and United States, 1971-2022
(Indexed to 1971)
The left has never been in charge of Argentina. Pinochet has been gone for a very long time- 30 years or so, and his method of creating “stability” was throwing anyone who questioned him out of a helicopter.
You don’t often come across someone singing the praises of Pinochet
Huh? The Argentinian governments of various political suasions from the last 40 years have generally been quite mediocre, but the very worst, by far, were all those of the extreme neo-liberals Menem, Macri, and now most probably Milei.
As for the Argentinian left, it died in the dungeons of the military dictatorship, over 40 years ago.
I believe Milei bill will pass. Even if Milei had only one party member this bill would still pass. Argentina government is on the right so they have enough vote to pass the bill. It’s sad really such a nice country. I believe USA will use Argentina to do coups in other Latin country’s
just an aside, but I don’t believe that Elon Musk or whichever other oligarch can be seriously considered to be the world’s richest man. King Charles owns 90% of Canada and Australia, and all the resources therein. Somehow he manages to keep off the radar.
In a strictly legal sense this is true, but the royal family does not actually have personal, legal ownership of those assets, nor does the king have administrative rights.
Further, the revenues from these (Canadian) lands stay in Canada, to be used by the administrators of the lands, which are the federal and provincial governments.
All reporting to the Governor general, appointed by the King. Likewise in Australia, London has more influence than you might think, and it’s not a charity. If they didn’t gain from it you’d be independent.
Interesting comment. There is so much we don’t know.
The governor general is appointed by the king on the advice of the Prime Minister. It’s not like the king chooses anything here.
Apart from certain ceremonial duties, the governor general is the one who dissolves Parliament, on the request of the speaker of the House. Theoretically this could be done unilaterally, but in reality it can’t be done that way.
By the way, if you wish to talk about Canada’s independence, orders generally come to the prime minister from the US, not the UK.
I’ll add that the governor general’s office has nothing to do with the administration of crown lands.
King Charles also takes orders from the US. Great Britain remains a puppy dog of the US even as MI6 manipulates the CIA.
If MI6 manipulates the CIA, which co-manipulates (at the very least) the US, then who is whom’s puppy dog really?
I think Charles also has a lot of influence on the US, at least as much as any single oligarch, if not more. It’s not a one way street.
this has not happened in Canada, as the Prime Ministers have all been very obedient, but in Australia, PM Gough Whitlam was indeed removed unilaterally. See John Pilger’s article on the case: https://www.theguardian.com/commentisfree/2014/oct/23/gough-whitlam-1975-coup-ended-australian-independence.
Also, Charles has been a lot more meddling than is permitted for his ceremonial role. Of course, the Constitutional Monarchy doesn’t have any provisions for keeping the king in line, which is why it’s moot.
The Governor General is only formally appointed by the King; in reality he/she is selected by the Government of Canada and the selection is rubber stamped by His Highness. If the Government’s choice was not confirmed, the monarchy in Canada would be history, in a heartbeat.
it’s owned by the Crown Corporation, a legal person with the king as its owner.
I feel sorry for Argentinians. It’s almost like if the U.S. would have elected Ron Paul, only to have him join us to the EU as soon as he got in office.
What seems worth pointing to, is that President Millea severely devalued the Argentine peso and is selling off state controlled resources to private interests, which will make resources especially attractive to private interests holding stores of foreign currency.
This seems to be practicing “shock doctrine” to an extreme and nationally disadvantageous degree:
https://fred.stlouisfed.org/graph/?g=mu2Y
January 15, 2018
Broad Effective Exchange Rate for Argentina, 2007-2023
(Indexed to 2007)
Forgive the terrible spelling mistake. I have no idea how it came about and why I never noticed:
President “Milei”
The other thing those articles on Latin America never mention is the absurd level of corruption that is present in those countries. I have to laugh real hard when the leftists here are against privatization. It never occurs to them that the cleptocrats in the government run everything to rubble, and in their own interest only. They rob, and they rob and they rob as if there’s no tomorrow. Just check the Petrobras and the leftist Workers’ Party in Brazil.
https://fds.duke.edu/db/attachment/73
2005
Another World Is Possible: The Rise of the Brazilian Workers’ Party and the Prospects for Lula’s Government
By John D. French and Alexandre Fortes
In October 2002 Brazil elected as president a former metalworker and founder of a socialist party, a man whose family had left the miserable northeastern hinterland five decades earlier to face prejudice and hardship in industrial São Paulo. The election of Luis Inácio “Lula” da Silva of the Workers’ Party (Partido dos Trabalhadores, or PT) was a clear signal that deep changes were going on in a country marked by huge social inequalities and a contempt for manual labor engendered by almost four centuries of slavery. In the first round of the 2002 presidential election, the former trade union leader had received 46 percent of the vote and won in twenty-four of twentyseven states. In the runoff election on October 27, Lula received 52.8 million votes, 61.3 percent of the nationwide total, and won in all but one state. With their vote, Brazilians had overwhelmingly supported a candidate and a party who were harsh critics of the pro-capitalist orthodoxies of neoliberalism and contemporary globalization. In doing so, Brazilian voters defied attempts by Washington, London, and the international financial markets to warn them away from this use of their democratic rights, an attempt at blackmail that failed even though the value of Brazil’s national currency went down by 40 percent between the beginning of 2002 and the October elections….
The Mexican peso is out-performing most, if not all currencies, including the US and Canadian dollars, and the booming Mexican economy is about to surpass Spain’s as the world’s largest Spanish-speaking economy — this under the leadership of a leftist president, Lopez Obrador, and his party, Moreno. And the lot of the Mexican working class is exponentially improving (including through the minimum wage being more than doubled), businesses are thriving, and privatization is being rolled back, and the environment and culture are increasingly being protected from the predations of the US and Canadian neighbours.
So, I am one leftist, both here on this site, and here in this phenomenal country, that is, like just about everyone else here, against privatization — and the sound you make when you “laugh real hard” puts a smile on my face.
^^^^What Don said!^^^^
I’m smiling too.
Mexico’s economy in terms of GDP has long surpassed that of Spain:
https://www.imf.org/en/Publications/WEO/weo-database/2023/October/weo-report?c=273,184,&s=PPPGDP,&sy=1980&ey=2022&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
October 15, 2023
Gross Domestic Product based on purchasing-power-parity (PPP) for Mexico and Spain, 1980-2022
2017
Brazil ( 2,540)
Spain ( 1,845)
2022
Brazil ( 3,064)
Spain ( 2,272)
Mexico has for years been the largest Spanish speaking economy:
https://www.imf.org/en/Publications/WEO/weo-database/2023/October/weo-report?c=273,566,184,&s=PPPGDP,&sy=1980&ey=2022&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
October 15, 2023
Gross Domestic Product based on purchasing-power-parity (PPP) for Mexico, Philippines and Spain, 1980-2022
2017
Mexico ( 2,540)
Philippines ( 921)
Spain ( 1,845)
2022
Mexico ( 3,064)
Philippines ( 1,171)
Spain ( 2,272)
Thank you for another excellent post. What a depressing situation. “National emergencies”, loss of civil rights, violence and environmental desecration all loom on the horizon. Wait a minute, that sounds like most countries of the Collective West.
The United States casts a long shadow.
Why are Milei shills so desperate in the comments?
Thanks everyone for this proper discussion of Nick Corbishley’s report.
A stroll into drug definitions shows how appropriate Corbishley’s comment is:
“This is austerity not on steroids but on angel dust.”
Drugs.com:
[Angel dust] (PCP) is a mind-altering drug that may lead to hallucinations (a profound distortion in a person’s perception of reality). It is considered a dissociative drug, leading to a distortion of sights, colors, sounds, self, and one’s environment.