Despite Political Backlash, 69.55% Agreed with Javier Milei’s Proposal to Dollarize

Argentina’s president Javier Milei’s recent proposal to replace the Argentine peso with the U.S. dollar raised several questions. The step to “dollarize” the Argentine economy was faced with significant political resistance. Real Research, a survey platform, surveyed Javier Milei’s proposal to see what the public had to say. The following are the results of the said survey.

Highlights:

• 42.17% “somewhat” agreed with Milei’s dollarization proposal
• Up to 38.47% anticipated positive effect of Javier Milei’s proposal
• 53.07% somewhat agree that dollarization is not a panacea for Argentina’s crisis-stricken economy

The survey starts with a poll on whether respondents were aware of the Argentina president’s proposal. 40.32% of respondents were well aware, while 38.77% were vaguely aware, and 20.92% were completely unaware.

The Public Agrees with Javier Milei’s Proposal

When asked whether or not they agreed with the dollarization proposal, 42.17% somewhat agreed, while 27.38% strongly agreed, leaving a collective 69.55% who overall agreed with the policy.

24.82% somewhat disagreed with the proposal, while 5.63% strongly disagreed.

As many anticipated, there would be considerable political backlash from replacing pesos with the USD. As such, respondents to the survey were asked if the proposal would have a negative or positive impact. 38.47% forecasted a positive effect, while 32.05% were seemingly unsure. 29.48% predicted a negative effect.

Surrendering to Washington, Necessary Step to Discipline Policymakers?

To dollarize its economy, Argentina would have to exchange all pesos for U.S. dollars, valuing assets and contracts in dollars. This would dissolve Argentina’s central bank, transferring control of monetary policy, including interest rates and currency printing, to the U.S. Federal Reserve.

This shift, advocated by Milei, aims to impose discipline on Argentinian policymakers by relinquishing autonomy to Washington, preventing Argentina from independently printing money.

Respondents were asked to share their opinions on the above statement; 55.12% “strongly” agreed with the above statement, while 31.58% “somewhat” agreed. 9.65% “somewhat” disagreed, and 3.65% “strongly” disagreed with the statement.

Should Argentina Reconsider the Practicality of the Proposal?

Argentina owns fewer U.S. dollars than it owes to its foreign creditors. This suggests that Javier Milei’s proposal is a non-starter, meaning that the proposal is unlikely to succeed or gain support. Accordingly, respondents were asked if Milei should have reconsidered the practicality of his proposal. 65.08% said yes, while 34.92% said no.

Dollarization Not A Panacea for Argentina’s Crisis-stricken Economy, Majority Agree

Some analysts have argued that Javier Milei’s proposal to dollarize is not a panacea for Argentina’s crisis-stricken economy. This is because fiscal policy will still be at the whims of Argentine politicians.

When respondents were asked about their agreement with this, 30.45% were in agreement, while a majority, 53.07%, were “somewhat” in agreement with the above statement. Only 16.48% were in disagreement.

Moreover, dollarization also does not guarantee against default, and the policy would leave the economy more vulnerable to internal devaluation without control over its exchange rate. Respondents were asked about their agreement with this, and the results are revealed below.

A collective 80.05% (37.73% completely agree and 42.32% “leaning towards agreeing”) overall found themselves agreeing with the aforementioned view. This was in contrast to 15.98% who were unsure, leaving only a collective disagreement of 3.97%.