Former Argentine Ambassador to China Sabino Vaca Narvaja File Photo: Courtesy of Argentine Embassy in Beijing

"The new government, with a clear bias and ideological perspective, will cause serious harm to Argentina's economy," said former Argentine ambassador to China Sabino Vaca Narvaja in an exclusive interview with the Global Times on Thursday.

He criticized the decision of Javier Milei, Argentina's newly elected president, not to join the BRICS (Brazil, Russia, India, China, and South Africa) framework and emphasized the importance of the New Development Bank established by BRICS countries for Argentina in building a new financial system based on production and development. He found the Milei government's decision "puzzling." In addition, this decision also offends important partner countries that strongly supported Argentina's BRICS membership, damaging Argentina's national interests, he said.

In August 2023, the BRICS summit in South Africa undertook a historic expansion, welcoming six new members: Saudi Arabia, Iran, the United Arab Emirates, Ethiopia, Egypt, and Argentina. The membership was originally scheduled to take effect from January 1, 2024.

However, on December 30, 2023, Milei announced that Argentina would not join the BRICS.

According to media reports, Milei has sent a letter to the leaders of the BRICS nations, stating that the current timing for Argentina to join the organization is "inappropriate." Analysts said that the purpose behind the Milei's government's decision is to seek financing from the US through the IMF or private investors.

Milei's decision came at a time when Argentina is facing a deepening economic crisis, and it has sparked criticism from numerous professionals in economic and diplomatic sectors within Argentina. Narvaja is among the critics.

Narvaja served as Argentine ambassador to China during the presidency of Alberto Fernandez, a left-leaning government that actively sought membership of the BRICS for Argentina. The Fernandez government believed that joining the BRICS would present a significant opportunity for Argentina to enter emerging markets.

Narvaja told the Global Times that if Argentina could join the expanded BRICS, it would boost the country's economic development.

He emphasized that many economies within the BRICS and Argentina have highly complementary economic structures. Moreover, the combined economic scale of the BRICS is surpassing that of the G7, with more than 50 countries worldwide expressing willingness to join the bloc, which is led by emerging economies.

Narvaja said that in the past few years, the BRICS nations have played a crucial coordinating role during times of crisis. This includes providing supplies and vaccines to other countries and offering loans to emerging economies through the New Development Bank. With the expanded membership, the BRICS will encompass 45 percent of the world's population, and over 80 percent of new consumers will originate from these countries.

Meanwhile, the BRICS nations possess abundant natural resources, including oil, gas, and strategic minerals, contributing around 44 percent of global crude oil production. All these factors are highly significant for Argentina's economic prospects, he said.

"The New Development Bank is crucial for Argentina in building a new financial system based on production and development. It can provide financial instruments, including counter-cyclical funds and development loans, which could bring many benefits to Argentina. The proposal to conduct investments and trade in local currency will also play a significant role in the global economy," the former Argentine diplomat told the Global Times. He noted that Argentina requires substantial infrastructure investment and needs to increase exports and foreign exchange income, so the new government's decision to reject joining the BRICS framework is truly perplexing.

At a time when Argentina needs foreign exchange to meet debt obligations and investment to enhance its potential export capacity, this move is truly astonishing, Narvaja said. "This harms our country's interests," he added.

"Many of our production sectors and local economies are heavily reliant on trade with China. China is also a major investor and lender for Argentina's infrastructure," he emphasized.

Moreover, apart from the economic aspect, China and Argentina mutually support each other on many crucial political issues, he noted.

China is currently Argentina's second-largest trading partner, the primary market for agricultural product exports, and the third-largest source of investment. Bilateral trade between China and Argentina reached approximately $25.5 billion last year, and despite adverse conditions such as the COVID-19 pandemic, bilateral trade has defied the odds and increased by 54.7 percent over the past six years. In 2022, the Fernandez administration officially joined the Belt and Road Initiative (BRI), and in 2023, it signed a cooperation plan with China under the framework of the BRI. Analysts widely believe that Argentina's collaboration with China contributes to the upgrading of its infrastructure and facilitates the repayment of debts to the IMF.