Bright future for Argentina? What is expected from the meeting between Javier Milei and Elon Musk

On Friday, Argentina’s president, Javier Milei, will meet in Texas with Elon Musk, one of his main allies on social networks worldwide. The tycoon has not stopped showering praise on the libertarian leader on his social network X.

According to a report in The Wall Street Journal, Musk and Milei’s relationship is already a digital “bromance” that does not want to be limited to ideological matters but to mutual commercial benefit.

The WSJ reports that Argentina, a historically prosperous South American country that has been facing a severe economic crisis for years, is one of the countries with the largest reserves of lithium in the world, a resource highly valued by Tesla, which began construction of a lithium refining plant last year in Texas.

Now, with the need to produce lithium for more than a million vehicles, it is the ideal time for Musk’s company to seek a trade agreement with the South American country.

“Tesla has been extending its reach into the battery supply chain, with Musk expressing particular concern about bottlenecks in the processing of lithium,” the WSJ reads. “Milei said in a December interview with Argentine media that Musk and other U.S. companies were interested in investing in Argentina’s lithium sector.”

It would be a logical business relationship, considering that the lithium reserves in the far north of Argentina are only comparable to the size of the reserves in Australia and Chile, according to the United States Geological Survey. Additionally, the country governed by Milei is a key strategic supplier to the United States, having provided 55% of U.S. imports of the metal from 2016 to 2019.

Another critical point for Argentina’s future and the meeting that Milei will have with Tesla’s owner is related to SpaceX, another Musk company.

According to the WSJ, SpaceX recently obtained permission from Argentine authorities to offer its satellite Internet services, known as Starlink.

This decision to position itself in Argentina comes as Milei reduces harsh regulations in Argentina to promote greater competition and attract investors.

Therefore, the meeting between Milei and Musk is absolutely significant. Although the Argentine president has received praise from the International Monetary Fund and Wall Street for deregulating the country, reducing public spending and generating the first monthly surplus in Argentina in more than a decade, the South American country has still not managed to achieve the first multi-million dollar investment in these first months of Milei’s tenure.

Because of this situation, Musk’s promise of investment would be a coup of Milei’s authority at the political level and vital commercial support to restore the markets’ confidence in Argentina.

Diego Guelar, former Argentine ambassador to the United States and China, told the WSJ that it is very important for Argentina “that a global and diversified investor like Mr. Musk not only looks at Argentina but also invests in it.”

The meeting between Tesla’s owner and the Argentine president is critical for Milei, who is facing fierce opposition in his country’s Congress. His most important bills presented to date have been blocked.

Despite the opposition, Milei can now boast tangible achievements, such as cuts in public spending, the reduction of rampant inflation exceeding 270% and the accumulation of foreign currency in the Central Bank of Argentina.

However, after decades of leftist governments that squandered Argentine taxpayers’ money and brought the country to the brink of economic collapse, its austere economic measures have generated a logical impact of an economic contraction that has affected ordinary citizens.