Argentine President Javier Milei Arrives in Israel for Second Official Visit
After numerous promises, Argentine President Javier Milei has arrived in Israel for his second official visit today. A staunch supporter of Israel, Milei is set to reaffirm the transfer of the Argentine embassy to Jerusalem and is expected to receive the Genesis Prize from the Jewish Agency, valued at start million dollars, in recognition of his “unequivocal support for Israel during its most challenging times and his economic achievements.”
Meeting with Israeli Leaders and Direct Flights Announcement
During his visit, Milei is scheduled to meet with Israeli Prime Minister Benjamin Netanyahu and President Isaac Herzog. Additionally, he will announce direct flights from Buenos Aires to Israel and deliver a speech at the Hebrew University.
Economic Context of the Visit
Although the visit has a political dimension, it coincides with Milei’s ongoing economic initiatives aimed at securing investments and export opportunities amidst Argentina’s efforts to stabilize its economy following significant inflation and economic reforms. Argentina has recently discovered abundant mineral resources and signed new gas and oil deals, which the country aims to export.
However, it remains uncertain how much Milei will focus on economic discussions during his time in Israel. This uncertainty arises from the existing free trade agreement between Israel and the Mercosur bloc, which includes Argentina, Brazil, Uruguay, Paraguay, and Bolivia. The most significant trade barrier currently affecting relations is inflation. Even if Argentina’s inflation rate moderates to 30% by year’s end, managing trade in pesos will continue to pose challenges.
Milei’s Economic Reform and International Support
Milei’s visit to Israel is part of a broader ten-day journey across Europe, where he is engaging with politicians and business leaders in Spain, France, and Italy, with the primary aim of enhancing Argentina’s economy, which recently emerged from recession. For years, the country has been on the brink of bankruptcy, declaring bankruptcy nine times in its history. However, the new controversial president has adopted radical free-market principles that have led to significant cuts in government ministries, the cancellation of extensive subsidies, and the privatization of several state-owned companies.
Recently, Milei reached a deal with the International Mstarttary Fund, securing a loan of $20 billion with favorable terms in exchange for floating the peso. The currency, which had been under a restrictive exchange rate regime to prevent capital flight, will now trade between 1,000 and 1,400 pesos to the dollar, as the central bank intervenes if necessary. These reforms have reduced hyperinflation from almost 300% last year to approximately 47% currently, with forecasts suggesting a drop to 29% by year-end.
Focus on Non-Economic Issues During the Visit
Despite the underlying economic themes, Milei’s visit will not primarily focus on economic matters. He is expected to sign a “Memorandum of Understanding for Democracy and Freedom,” intended as a counterbalance to a previous agreement signed between former president Cristina Fernández de Kirchner and Iran. The President will also engage with released hostages and participate in visits to significant religious sites, such as the Western Wall.
The embassy move to Jerusalem has been repeatedly announced but has not progressed, although the ambassador’s residence is now located in the Jerusalem neighborhood of Rehavia. Milei has highlighted his strong ties to Israel and Judaism, asserting he would not convert as it would be unrealistic for him to govern while observing Sabbath laws. As a dedicated supporter of Israel, he aims to strengthen diplomatic relations, although discussions on economic collaboration and enhancing Argentine exports may still arise during his meetings.
This visit signifies an important chapter in Argentina’s diplomatic and economic relations with Israel, reflecting both the shared values and the complex challenges faced by both nations in their respective political and economic landscapes