It has been almost a year since the election of the eccentric libertarian Javier Milei, nicknamed “El Loco”, as president of Argentina. Swept along on the tide of far-right resurgence around the world, Milei was elected promising to take a chainsaw to the state to transform Argentina’s unstable economy. Milei has been unable to enact all of the policies on his radical agenda of cuts as he lacks a majority in Argentina’s Congress, but he has still made significant cuts.
A century ago, Argentina was once among the top ten richest countries in the world. It has been a story of decline ever since. Recently, the country has seen an intense inflation crisis which is bad even by its historical standards, which contributed to Milei’s election.
The headline of the new president’s first year has been the further increases in the poverty rate for over half of Argentina’s population. Milei’s policies have not been the sole cause of this failure of the Argentinian state. Before his election poverty rates were around 40% and the economy was in a terrible state. It is clear though that Milei’s austerity measures have had an impact; just under a year into his presidency the future of the Argentine economy looks as uncertain as it did before.
The likening of a politician with the power of Milei to Marvel superhero Wolverine is an unusual and potentially concerning comparison. It is a comparison that has nonetheless been made by a key ally of Milei who sees similarities in both Milei’s appearance and character. Every superhero must have an origin story and Wolverine look-alike Milei is no different. His biography discusses both parental abuse and bullying at school as shaping the man at the helm of South America’s second largest economy.
Like his right-wing amigo Donald Trump, a fellow sufferer of chronic bad hair days, Milei made a name for himself as a media personality. His role as an economic commentator on television not only established his fame but also his synonymy with far right economic views. The fact that Milei’s dogs are named after prominent right wing economic figures illustrates his deep-rooted ideological beliefs. It is his ideology that has led him to be celebrated by anti-woke billionaire Elon Musk.
Milei is described by many, including himself, as a right wing libertarian. He believes in significant reductions to the size of the state and the promotion of the free market. His election campaign included a promise to dismantle the central bank . These untried and untested policies caused concern for onlookers of the unfolding Argentine financial crisis.
These policies stand in stark contrast to Peronism, which has long been the dominant ideology in Argentine politics. Peronism pushes the policies of Juan Peron, the president of Argentina from 1946-1955 and again for a brief spell from 1973-1974. “Justicialismo”, the doctrine of the Peronist tradition, emphasises the importance of social justice and economic nationalism.
Many blame Peronism for Argentina’s financial struggles. The Milei government’s spokesperson Manuel Adorni has blamed the recent rise in poverty on the populist politics of previous governments and the overspending that led to the accumulation of huge debts. Taking none of the blame for the poverty that blights the country is fanciful, however decayed the economy Milei inherited was.
The increase in the poverty rate to 52.9% is a clear indictment of Milei’s economic policy. The imposition of austerity measures have clearly played a role in this rise in poverty. Milei has assured that it is not ordinary Argentinians that are suffering as a result of the cuts. However, cuts to welfare spending as well as frozen pensions have undeniably placed the onus of the cuts to public expenditure on the worst off in society. The UK’s own cruel and failed experiment with austerity has shown how it is a deeply regressive policy to pursue. Resentment can clearly be seen in protests that have been spurred on by trade union discontent.
Cuts in public spending have however led to fiscal deficits making way for fiscal surplus. In December there was a negative difference (between government spending and income) of 2 trillion pesos which is equivalent to £93 billion, in April this had become a positive difference of over 260 billion pesos. Economic indicators like this have secured praise from the International Monetary Fund (IMF), which in January agreed to release $4.7 billion as part of a debt restructuring plan for Argentina.
Whilst Milei’s cuts to public spending have been large so far, the aim is for an even greater demolition of the state. One of the jewels in Milei’s shining crown of liberalist promises, the abolition of the central bank, has yet to be realised. Milei’s “omnibus bill”, which included plans to further reduce the size of the state, has been blocked due to his coalition not holding a majority in Congress and opposition parties’ apathy for his plans.
The spectre of inflation still hangs over the Argentine economy. When he was elected the inflation rate stood at 140%. In August, the annual rate of inflation was still not under control, in fact rising from the figure that Milei had inherited to 230%. Inflation at these levels is detrimental to any economy as it eats away at wages and any benefits given out by the state, worsening the positions of the worst-off in society.
Almost a year into Milei’s presidency it is still far from clear what his lasting legacy will be. In the words of the man himself, recycled from fictional US President Jed Bartlet, his divine mission is to defend freedom “diplomatically, economically and materially”. These seem like words of hope for a country that has for so long been a slave to economic insecurity. However, I fear that this crusade for freedom will be of the economy from the caring arms of the state, but not of the long suffering citizens of Argentina from the cruel reaches of poverty.
