Milei promises shock therapy for Argentina

Today’s top stories

• Microsoft hired Sam Altman and Greg Brockman to head up a team conducting artificial intelligence research after the pair were pushed out of OpenAI, the company they co-founded, on Friday. OpenAI has picked Emmett Shear, co-founder of video streaming service Twitch, as its interim chief executive. OpenAI staff have threatened to quit unless Altman is reinstated. Here’s how a dramatic weekend unfolded.

• Amos Hochstein, the White House’s chief energy adviser, told the Financial Times he was confident that Arab oil producers would not weaponise energy, despite increasing anger in the region over Israel’s bombardment of Gaza.

• The NHS agreed a deal with global drugmakers to limit the increase in its drug bill to 4 per cent a year from 2027.

For up-to-the-minute news updates, visit our live blog

Good evening.

A self-described “anarcho-capitalist” and radical libertarian who has expressed support for the sale of human organs, referred to his country’s largest trading partner as “murderous”, denounced Pope Francis as a “filthy leftist” and climate change as a “socialist hoax” is president-elect of Argentina.

Javier Milei swept to victory in Sunday’s run-off election, promising “drastic changes” to the country’s economic strategy amid its worst crisis in two decades.

The first-term congressman emerged as the frontrunner in August after promising — with a chainsaw as prop — to slash spending, “burn down the central bank” and replace the Argentine peso with the US dollar.

Although he attempted to rebrand as a “normal guy” ahead of the run-off, Milei came out of the traps pretty quickly in his first day as president-elect, pledging to privatise the national oil company YPF as well as state television and radio. “Everything which can be in private sector hands, will be in private sector hands,” he vowed.

The country’s business leaders had struggled to muster enthusiasm for Milei or his opponent, economy minister Sergio Massa, after their preferred candidate Patricia Bullrich was eliminated in October’s first round of voting.

The business community will also be worried that Milei’s election, as Alan Beattie notes in today’s Trade Secrets newsletter (for Premium subscribers), might put the whole direction of South American trade in doubt. The long-stalled “cows for cars” treaty between the EU and the Mercosur group of countries (Brazil, Argentina, Uruguay and Paraguay) had been nearing agreement after 20 years of wrangling but, after Milei previously pledged to withdraw Argentina from the bloc, that now looks in jeopardy.

The country’s stock market is closed for a public holiday today but US-listed shares in Argentine companies rose after the election result. Bonds also rose, although remaining at levels that indicated investor scepticism about returns.

Parliamentary arithmetic and the dire state of the country’s economy pose huge challenges for the insurgent, writes Latin America editor Michael Stott, meaning that some of Milei’s wilder promises were unlikely to be enacted, at least in the short term.

Regional presidents who lack congressional majorities often come unstuck, even in better economic circumstances, Stott notes. And even if Milei manages to stave off the country’s slide into hyperinflation, he still has to deal with a vast pile of domestic debt and renegotiate a $44bn deal with the IMF.

Still, at least he may have an influential friend to the north come next November. Donald Trump, to whom Milei has frequently drawn comparisons, was quick off the mark with his congratulations: “I am very proud of you,” Trump said. “You will turn your country around and truly Make Argentina Great Again!”

Need to know: UK and Europe economy

British Prime Minister Rishi Sunak promised to cut taxes “over time” ahead of this Wednesday’s Autumn Statement. The FT editorial board said chancellor Jeremy Hunt should use the occasion to prioritise the economy over political pressures. Full details of the statement will be in Wednesday’s DT.

Investors are betting on earlier interest rate cuts in the UK and eurozone than previously expected after recent data suggesting both were heading for a period of near stagnation.

Brexit negotiator Michel Barnier told the Financial Times in an interview that British ministers did not know the consequences of leaving the bloc.

The Israel-Hamas war has reignited the debate in the German government about selling jets to Saudi Arabia, with some arguing that the ban should be lifted, given the kingdom’s role in ensuring regional stability.

Need to know: Global economy

Americans are heading into Thanksgiving against an increasingly benign economic backdrop, with food inflation falling and lower petrol prices and airfares. Earnings from some of the country’s largest retailers however suggest that cracks are starting to show in the picture of consumer resilience.

After the largest drop in China’s share of global GDP since the Mao era, China’s rise as an economic superpower is reversing, says contributing editor Ruchir Sharma.

Zambia’s debt restructuring is in tatters after creditors, led by China, forced the copper-rich country to suspend a $4bn deal in dollar bonds, derailing its attempts to move on from a years-long default. Bondholders were said to be “very disappointed and deeply concerned”.

Need to know: business

Bayer shares plummeted as much as 18 per cent after the German pharma company reported failure of a late-stage trial for its asundexian blood-thinner.

Italy blocked French jet engine maker Safran’s purchase of Collins Aerospace’s Italian control business over national security concerns. Giorgia Meloni’s government said the deal could affect key supply contracts for the Eurofighter programme. 

Despite airlines reporting booming profits and splashing out on new planes, their share prices are still below pre-pandemic levels as investors fret about high fuel prices and economic risks.

The rapid success of weight-loss drugs is not only transforming the pharma industry but also disrupting the business models of companies in industries ranging from fast food to insurance to health and fitness, writes columnist Rana Foroohar.

Russian assassins and saboteurs are targeting Bulgaria’s arms industry to disrupt crucial weapons supplies to Ukraine. Bulgarian officials say as much as 40 per cent of all bullets and shells used by Kyiv are manufactured in their country.

Lithium, a key element of electric car batteries, is right at the centre of the energy transition but can production meet surging global demand while minimising its environmental impact? Watch FT Moral Money’s new film.

The World of Work

The process of naming EY’s new global chief executive has thrown the spotlight on the final business leadership taboo: old age. Competence and capability must surely come first, says Andrew Hill.

How common are bad bosses? Recent scandals show few sectors are exempt, writes columnist Pilita Clark.

The world of the Japanese salaryman has been transformed by the pandemic and the shift to hybrid working, bringing to an end the presenteeism that dominated the country’s office culture, writes Asia business editor Leo Lewis.

Employers and the government are missing opportunities to access the skills of the many migrants who came to the UK via non-work routes, such as Ukrainians and Hongkongers, writes Heather Rolfe of the British Future think-tank

Some good news

The World Health Organization reported progress in eliminating cervical cancer. Australia is on track within the next 10 years to be among the first countries in the world to do so.

Source: Economy - ft.com