Elon Musk is cosying up to Italian Prime Minister Georgia Meloni, as he prepares to present her with the Atlantic Council’s Global Citizenship Award at the end of the month in New York. The public display of friendship comes as Musk eyes the Italian space sector.
In May, the New York Times reported a trend in Musk’s relationships with world leaders. He would get close to them, bolstered by his control of X, and business relationships would soon flourish.
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Given this context, how important is a seemingly superficial public display of goodwill between Musk and Meloni? And does one man wield so much influence that his friendships determine massive investment flows into whole economies?
Global friendships
When Argentinian President Javier Milei won the election, Musk immediately posted on X, “Prosperity is ahead for Argentina.” It was followed by displays of mutual support through X, such as reposting stories and sharing positive information about each other.
In April they also met at Tesla’s factory in Austin, Texas where they discussed “the need to liberate markets” and “the importance of eliminating bureaucratic obstacles that keep investors away,” according to a statement from Milei’s office.
The agreeableness between the two occurs against the backdrop of Tesla’s business interests in Argentina. Musk has called lithium “the new oil” and Argentina has the world’s second-largest reserves.
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By GlobalDataThe Argentinian government recently passed the incentive regime for large investments (RIGI) which gives investors generous tax incentives and lightens the load of bureaucratic processes. The reform is meant to help invigorate the country’s crisis-riddled economy. The law would heavily benefit Tesla, as it would give them stable access to lithium.
Milei has also mentioned Musk’s companies by name before. After passing a set of 366 provisions upon taking office, Milei discussed the reforms in a televised address and mentioned Starlink. It was the only corporate brand name that made it into the address.
A similar story has taken place in India.
Musk has formed a long-standing relationship with Indian Prime Minister Narendra Modi, starting with a visit to a Tesla factory in California in 2015. Throughout the years, Modi has felt like Musk’s willingness to engage with him has opened doors for India.
For a long time, there has been an implicit ban on electric vehicles (EVs) from foreign manufacturers in India, a potentially huge market for Tesla. Simultaneously, former X leadership had clashed with India’s government over requests to take down posts that company leaders had considered censorship.
Much of this luck changed when Musk purchased X, an important platform for political discussion in India. Since he’s taken the lead, posts about a 2023 BBC documentary that explores Modi’s role in the 2002 Hindu-Muslim riots in Gujarat, where he was a minister at the time, have been blocked by the platform. The huge tax that prevented imports of foreign EVs has also been modified. The tariff, which used to be 100%, now stands at 15%, particularly for EVs that retail for more than $35,000. Tesla’s Model 3 cars sell for $38,990.
Similar developments have unraveled in Brazil with former President Jair Bolsonaro.
Italian friendship
The Atlantic Council will recognise Meloni for being “instrumental in ensuring much-needed European aid to Ukraine” and for emerging “as a powerful interlocutor across Europe and the world stage.”
Musk attended a political festival last December hosted by the Brothers of Italy Party, to which Meloni belongs. He expressed concerns about the decline in Italy’s population, a worry that Meloni has also expressed.
The two have a closed-door meeting scheduled later this month to discuss investments in Italy’s space and artificial intelligence sectors.
Italy recently expanded foreign investment opportunities into its space sector and expects to generate $8.1bln of investment by 2026. Space Exploration Technologies Corp., headed by Musk, already provides broadband internet access in Italy through Starlink.
Starlink complained earlier this year that Italy’s largest telecom provider was obstructing the rollout of its internet services.
Preferential investments
Musk’s investments may be a welcome stimulus to struggling and emerging economies. It also gives countries the opportunity to participate in high-tech sectors that they may not have had access to. At the same time, Musk’s inflammatory speech on the “woke mind virus” and his downplaying of hate groups often comes as part of the package.
The quid pro quo that marks these relationships begs the question, should one person wield so much power over massive investments that have the potential to disrupt national economies?
