Breakdown: Why is Argentina’s Tech Elite Embracing Javier Milei?

Argentina is days aways from kick-starting the administration of President-elect Javier Milei, which promises to be –at the very least– exceedingly interesting for political, economic and market analysts. 

Milei caught international headlines thanks to its highly confrontational, upsetting and unorthodox approach to politics. His rhetoric and campaign promises have made him a polarizing figure in and outside of Argentina. Which makes it quite puzzling when some of his country’s most prominent tech entrepreneurs have openly expressed support for him. 

High hopes: Mercado Libre Founder and CEO Marcos Galperín raised some eyebrows with a tweet immediately following Milei’s victory in the ballot box. 

• The message was but a single word (“Free”) with an image of birds flying away from a broken chain, lit against soft sunlight. 

Libres. pic.twitter.com/lbnjOIAqUb

— Marcos Galperin (@marcos_galperin) November 19, 2023

Globant Co-Founder and CEO Martin Migoya congratulated Milei for his victory that same day. Migoya’s comment was in reply to Elon Musk, who tweeted that “Prosperity is ahead for Argentina.”

• “Congratulations to Javier Milei,” Migoya tweeted. “Freedom, hard work, lots of humility and long-term planning to realize the country with which all Argentines dream of and which we know we can build.” 

Es nuestro mayor deseo. Felicitaciones @JMilei . Libertad, trabajo duro, mucha humildad y pensamiento de largo plazo, para hacer entre todos el país que los argentinos soñamos y podemos construir. https://t.co/fsdFLpY9gX

— Martin Migoya (@migoya) November 19, 2023

Argentinian entrepreneur and close associate of Galperin, Eduardo Bastitta, became an important player in Milei’s campaign.

• Bastitta is CEO of Plaza Logística, a real estate developer which specializes in industrial parks. Mercado Libre is counted among its clients. One of Bastitta’s most eye-catching projects is +Colonia, an urban development in Uruguay which promises to replicate the success of Silicon Valley’s innovation ecosystem.

Tensions past: Despite initial signs of friendliness, Mercado Libre’s CEO became a staunch critic of President Alberto Fernandez’s left-leaning administration. 

• Galperin moved to Uruguay shortly after Fernandez’s victory. Years later, he would state in an interview with The Financial Times that entrepreneurs had “grown tired” of regulations changing so frequently in Argentina, adding that many business people had left the country because of that.

In 2019, it was reported that Mercado Libre’s CEO and the Co-Founders of Globant were part of a WhatsApp group made up of entrepreneurs in support of former president Mauricio Macri.

• Although Macri and Milei are not entirely aligned, they’re regarded as the business-friendly options in Argentina’s political landscape. Also, Milei chose a former Macri official as one of his first cabinet picks. 

Voices from the ground: Carlos Pallotti, Argentina’s former Undersecretary of Productive and Tech Services, does see high hopes for Milei’s government among Argentinian entrepreneurs in general, and exporters in particular. Although he attributed those expectations more to the promise of change than to Milei’s figure specifically. 

• “All of those involved in an activity which isn’t as heavily regulated, as is the case of software […] feel like the State could be an obstacle because it won’t allow them to operate freely,” commented Pallotti, a Nexus Illuminate Award winner.

• “I do believe there’s a sensation that [Milei’s government] will eliminate certain locks that are making business operations more difficult today,” he added. “But I don’t see a united front [among tech entrepreneurs]. It’s more of a mix.”

Going soft: Like other recent political radicals, Milei softened his tone right after winning the vote. He picked a former Central Bank chief to helm his Economy Ministry. The Central Bank is one of the many Argentinian institutions which Milei promised to demolish.

NSAM’s Take: It’s odd that some of Argentina’s most successful entrepreneurs were seduced by Milei’s campaign, which was mostly sound and fury. Which makes us believe that their sympathy comes from the prospect of a business-friendly presidency that, though helmed by a self-described “market anarchist”, could be reined in by more experienced, level-headed officials.

It must be noted that several or Argentina’s industry chambers sent messages of support towards President-elect Milei. In a region where the economic landscape is rarely stable, it’s common for business groups to make these sorts of diplomatic gestures when a new administration takes charge.

Argentina is one of Latin America’s biggest economies in spite of heavy debt, over 100% inflation  and a byzantine currency system. Investors still see the country as a major tech hotspot in the region, thanks in great part to the growth of companies such as Globant, Mercado Libre and other emerging success stories . 

In Globant’s most recent Converge forum, company CEO Martin Migoya described a bright future for Argentiniean (and Latin American) tech due to the increased interest from US businesses in sourcing materials, manufacturing capabilities and software services from the region. 

Milei remains an X-factor, yet Argentina’s tech kings might see in his administration a chance to operate with relatively free rein and fulfill what they imagine to be the full potential of the country’s tech ecosystem. 

Milei described his plans for Argentina’s economy as “shock therapy”. That is, a very aggressive, though necessary set of policies to produce radical change. It’s almost certain that giants such as Mercado Libre and Globant will survive that shock therapy due to their size alone. Whether smaller players in the local tech and entrepreneurial space will do likewise is quite another matter.