What Argentina’s New President Means For the Country’s Future

Arya Gunde • Dec. 20, 2023

The flag of Argentina against a blue sky (Angelica Reyes/UNSPLASH).


Javier Milei stands in front of a presentation board wearing a suit and a navy blue tie. “Afuera!” he hollers, ripping off a blue tag labeled ‘Department for Sport and Tourism.’ “Afuera!” rang out again, with Milei tearing the ‘Department for Culture’ from the board this time. The President’s voice sounds passionate and angry in the video that circulated TikTok, ending with an authoritative message: “the thievery of politics is over. Long live liberty!”

The recent election of Milei has thrust change in the air for Argentina’s 45 million residents, but what this means for the future of the once-prosperous nation is up for debate.

Comments on Milei’s personal social media pages are half filled with love and hope, while another side braces for doom and despair. Either way, his ability to invoke a strong emotional reaction has drawn global intrigue.

Milei’s general election win in November came at a challenging time in Argentine society. Citizens were keen to send a message with their votes, electing a self-proclaimed anarcho-capitalist as a symbol of change against the status quo.

Milei is an economics professor who gained notoriety in the 2010s for his extreme stances and wild antics. His flagrancy, coupled with his distinguished position as an author and lecturer, made him a frequent guest on Argentine television. There, he would aggressively advocate his opinions while insulting opponents during debates.

Milei entered politics in 2021, running for the lower house of the Argentine Congress with the libertarian party. He established the coalition La Libertad Avanza (Freedom Advances) and continued advocating for far-right free-market reforms. In the 2023 election, his Presidential race won the highest vote percentage since Argentina’s transition to democracy in 1983.

Milei’s promises to cut political corruption are celebrated by a population that doesn’t trust the political class. However, Milei’s sudden rise and aspirations to reduce government spending while privatizing services have prompted skepticism from some.

Lee Fang writes in The Intercept that right-wing libertarian movements funded by billionaires from around the world are growing in Latin America to push foreign capitalist interests. He says one group in particular is at the root of the problem: the United States-based Atlas Network.

Atlas Network

Ariel Goldstein, a researcher at the University of Buenos Aires, describes the Atlas Network as a “pro-free-market think tank” that’s recently shed its culturally conservative ideology to influence a larger share of the Latin American population.

Roberto Salinas-Leon, the Atlas Network director of the Centre for Latin America denounces this belief. In an interview with CHUO, he states that the Atlas Network is not as nefarious as is depicted in the media.

Salinas-Leon explains that the network is a non-profit organization that simply secures grants through private parties and distributes them to around 500 think tanks worldwide for various initiatives. He says these grants are small compared to those provided by the likes of George Soros, and invites people to explore the Atlas Network website to learn about its work.

He claims narratives presented by Fang about Koch Brothers and State Department funding are blatantly false or misleading.

Salinas-Leon revealed that many of the Atlas Network’s partners work with people near Milei, but the network was never directly connected to his campaign. It’s not shocking, as think tanks are centres for policy research and data analysis routinely used by politicians. Leon says Milei’s rise and win surprised everyone, including the Atlas Network.

Background and Peronism

Milei’s rise to power is understandable when gauged with the proper context. Argentina’s economic mismanagement goes back decades. Since 1946, the country has taken a “developmentalist” approach to economics, deterring trade and focusing on maintaining domestic industries and social conditions.

The approach was vastly popular when it was introduced and blossomed under the leadership of President Juan Perón, leading to the creation of the term “Peronism.”

Salinas-Leon asserts that Peronism is a special brand of populism that shifts ideology to perpetuate power.

“Peronism has governed 16 of the last 20 years in Argentina, it is a powerful structure in Argentinian politics. It has been like that since 1945,” says Goldstein, noting the relevance of the ideology.

“[Peron was] doling out subsidiaries to special groups that [became] political constituencies,” says Salinas-Leon.

Argentina’s strategy of printing money to finance state-backed industries led to hyperinflation. In the ’90s, the Government placed an economic straitjacket on Argentina by tying the Argentine peso (ARS) to a US dollar peg (printing one peso for every dollar in reserve).

Salinas-Leon says this worked out in good economic times but crashed when the US raised interest rates or faced a recession.

To sustain reserves, Argentina started taking on debt from international lenders such as the International Monetary Fund (IMF). After abandoning the dollar peg in 2001, Argentina’s peso rapidly sunk in value, forcing the country to take on even more debt to function.

Goldstein says the last Peronist government of Alberto Fernandez faced a catastrophic economic crisis. Fernandez’s reign started shortly after Argentina secured a $57 billion loan from the IMF in 2018. The loan was designed to help then-President Mauricio Macri’s market-friendly government avoid high inflation and a gaping budget deficit.

“Macri pretended to give some strength to the Argentine situation by taking that debt, but finally it put the country in a very conditioned situation,” says Goldstein.

The “conditioned situation” he mentions is when the IMF began to dictate Argentine economic policy. Goldstein describes it as “severely restricting the capabilities of the state to elaborate autonomy” after taking the loan.

In 2022, under Fernandez, the IMF issued another loan to refinance $44 billion still owed from the previous programme, making Argentina the IMF’s biggest debtor. Inflation rose to over 140 per cent and 4 out of every 10 people were considered under the poverty line.

Goldstein says this instability is what led to an outsider being elected in Milei.

Proposed Changes

One of Milei’s promises is to dollarize the Argentine economy, abandoning the peso entirely. “People [don’t] trust historically in Argentina in our coin, the peso. So always when people think there is going to be a crisis, they start to buy dollars,” says Goldstein.

Salinas-Leon says this phenomenon is due to hyperinflation. Because goods depreciate slower than the peso, “consumption becomes a form of saving, and that’s a horrendous distortion. [So] the dollar becomes as good as gold.”

Argentina placed restrictions on the amount of dollars individuals could buy to curve an increase in exchange prices. However, demand remained high, creating a booming black market for currency exchange. Leon claims that as of Dec. 12, the exchange rate on the black market for dollars is around 1000 pesos, almost triple the official exchange rate of around 366 ARS.

Goldstein says dollarization will “certainly not be easy,” which Milei acknowledges as well. The new president’s most important promise is to cut government spending and boost private enterprise in Argentina.

In his maiden speech on Dec. 10, Milei said a fiscal adjustment of 5 per cent of gross domestic product will impact the state but not the private sector. Salinas-Leon says the idea works well in textbooks but that “implementation is going to be very difficult.”

He explains that what Milei means is streamlining taxes on the private sector while cutting bureaucracy and transforming bureaucratic bodies into “incorporated corporations.” Goldstein is wary of Milei’s claims, stating “Milei pretends to eliminate a lot of ministries but at the same time he… creates a very big ministry with all of the ministers.”

Goldstein points to the newly established Ministry of Human Capital as an example of this. It combines the ministries of Labour, Employment and Social Security, Education, Culture, and Social Development.

Thus, Argentina is in for a painful adjustment period. Milei himself admits that the situation will get worse before getting better.

On Milei’s statement, Goldstein says, “he expects a combination of recession and high inflation…we can expect more unemployment…more poverty [and] a decline of wages.”

He adds that Milei has not placed any restriction on spending on the Ministry of Human Capital as a method of curbing the oncoming economic disparity. Salinas-Leon says he’s interested in seeing what kind of social safety net the Government will offer since 40 per cent of citizens are already in poverty.

He estimates that Milei has around one year before public trust in his leadership runs out.

Looking Ahead

Milei is planning to open Argentina to international trade. Salinas-Leon and Goldstein both recognize the potential for growth in this move.

They highlight the fact that Argentina is known for its “unicorns,” startup companies with a value of over $1 billion. However, there are looming concerns that foreign investment may destroy local industry.

Argentina’s industries are protected by heavy unionization and subsidies. Trade and foreign investment would open the market to foreign capital, undermining domestic business.

Surprisingly, Salinas-Leon is all for regulation when it comes to foreign investment. He says Argentina has to open up to trade to modernize its economy, but it can follow a Nordic model to “protect the outcome of the national economy.”

For him, Argentina’s approach of only producing products for a domestic market is “ridiculous” and it is time for the country to build on its “competitive advantages [and] vast resources.”

The road ahead for Argentina is long, treacherous, and filled with uncertainty. Goldstein notes that Milei has a minority in Congress, making it difficult for him to even implement any significant change.

Younger populations remain hopeful for Milei, who’s garnered a significant following on social media with over two million followers on TikTok.

So far, it’s clear that Argentines are tired of the status quo and ready for change, even if it means endorsing someone completely outside the ballpark of a traditional politician as president.

“The most clear [thing] about Milei’s government is we have to wait to see what happens,” says Goldstein.

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