Javier Milei's first year in office has been marked by drastic economic measures and soaring inflation. Critics argue that his policies, while promising a break from the past, are reminiscent of previous right-wing administrations that have prioritized corporate interests over the well-being of the majority.
In his first 12 months, Javier Milei has imposed drastic economic measures – sparking protests while banking on an IMF bailout and a penchant for anarchic capitalism. Mr Milei promised a war on bureaucrats, brutal public spending cuts, and sweeping deregulation of Latin America’s second-largest economy. Predictably, the outcome has been Mr Milei did not so much win the last election as the previous government lost it.
When voters went to the polls in October 2023, monthly inflation stood at, fuelling frustration with the established parties and anxiety about the future – sentiments Mr Milei skilfully exploited. After his victory, monthly inflation soared to 25% before dropping back to in November. As a devotee of Milton Friedman, Mr Milei might claim his public sector cuts were painful but necessary. This is far from the truth. The reality, as the economist notes, is that Mr Milei devalued the peso, triggering a spike in domestic prices while using currency controls to keep a lid on further inflationary pressures. The irony of deploying state intervention while championing the free market is lost on Argentinians struggling to survive. As our correspondents last week, there has been a very high social cost attached to Mr Milei’s austerity programme of slashing services and jobs. In the short term, Mr Milei’s ability to forestall a backlash hinges on external factors. Argentina’s $44bn loan from the International Monetary Fund (IMF) is running out, and the government is seeking additional funds to ease currency controls without triggering a peso – a tactic used by Argentina before. Since its 2018 financial crisis, Argentina has relied on IMF bailouts and, increasingly, loans from Beijing, becoming Latin America’s largest recipient of Chinese commercial funds. This dependency poses a geopolitical challenge, with pressure from Mr Trump to rise by 160% in his first year in office – roughly the same increase recorded during the final year of the previous government. Rather than representing a break with the past, Mr Milei’s agenda echoes those of earlier rightwing administrations, whose – letting corporate interests operate with minimal oversight. Such policies might enrich a select few in Argentina – or Trumpian America – but for the majority, they lead to greater hardship and inequality. Mr Milei’s bet is that he can fool enough people into leaving his mess for his successor to clean up. It’s a cynical, short-sighted wager that neglects the need for meaningful reforms in Argentina
ARGENTINA MILEI INFLATION IMF CAPITALISM
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