Title: “The dollarization of the Argentine economy: a realistic solution or an illusion?”
Introduction :
The Argentine economy has been struggling for several years in a major economic crisis, marked by galloping inflation and a constant devaluation of its currency, the peso. In this context, the “anarcho-capitalist” candidate Javier Milei proposes a radical solution: the dollarization of the Argentine economy. However, this proposal raises questions about its feasibility and actual effectiveness. In this article we examine the different arguments for and against the dollarization of the Argentine economy.
Argument for dollarization:
Proponents of dollarization argue that using the dollar as the official currency would bring monetary and financial stability to the Argentine economy. By adopting a strong, internationally recognized currency, Argentina could attract foreign investment, reduce inflation and restore the confidence of economic actors. In addition, dollarization would facilitate international trade and allow closer integration into the global economy.
Argument against dollarization:
On the other hand, critics of dollarization highlight the challenges and risks associated with this measure. First, dollarization would imply a loss of monetary sovereignty for Argentina, as the country would relinquish control of its monetary policy to the US Federal Reserve. Additionally, adopting the dollar as its official currency could result in over-reliance on the United States and its economic policies, which could limit Argentina’s ability to address its own economic and social challenges.
The question of feasibility:
Implementing dollarization would require a large stock of liquid dollars to replace the peso. However, given Argentina’s precarious economic situation and its negative net reserves, it would be difficult for the country to obtain a large loan from international markets. Furthermore, dollarizing the Argentine economy would not solve the deep structural problems affecting the country, such as corruption, social inequality and economic imbalances.
Conclusion :
The proposal to dollarize the Argentine economy put forward by Javier Milei is sparking a lively debate. Although some see this measure as a potential solution to emerge from the economic crisis, others highlight the risks and obstacles associated with dependence on the dollar and the United States. As Argentina continues to seek solutions to revive its economy, it is crucial to carefully evaluate the implications and possible alternatives in order to find a path that guarantees both economic stability and national sovereignty.