Hannah Hains | Latin America Fellow
"Javier Milei Presidente - Asunción." Image credit: Casa Rosada via Wikimedia Commons.
On the 10th of December 2023, Argentina swore in their new president, Javier Milei: the self-described ‘anarcho-capitalist’ who aspires to eliminate the state and credits his pet dogs as his political strategists. As the first libertarian president in the country’s history, Milei dethroned the strong Peronist opposition with his merely two-year-old political party. His campaign ran on a variety of scandalous proclamations, including the denouncement of the pope as “the representative of the devil on earth”, a promise to cut ties with China and Brazil, and the denial of both Argentina’s 1976-83 military dictatorship and the existence of climate change.
Milei also proposed a complete overhaul of the country’s current economic model, including shutting down the central bank, switching the currency from the local peso to the US dollar, and major cuts to government spending through the elimination of several foreign ministries. Such proposals were made in a desperate bid to rebuild the country’s severe financial crisis that has pushed 40 per cent of the population into poverty and annual inflation to 143 per cent. These bold proposals were made without plans for how to implement them, setting himself up for controversies and contradictions from the start.
Despite winning the second-round election with a majority of 55.65 per cent, fierce opposition remains from both the public and Congress, where his party holds just 39 seats out of 257 in the Lower House. After his inauguration, Milei warned the public that coming changes would be a shock, foreshadowing a temporary worsening of the economic situation. His common reminder in this address, “there is no money”, emphasised that a gradual approach to soften the fallout of these changes was impractical due to their requirement of further public spending.
Several of his radical transformations began in his first week. The peso was devalued by over 50 per cent, sending prices skyrocketing. Public works were frozen, energy and transport subsidies reduced, and a 15 per cent tax on exports introduced. Twenty-four hours later, despite the markets responding calmly and the peso stabilising, prices increased up to 175 per cent nationwide. Fuel costs increased by 37 per cent, and the country's largest airline increased ticket prices by 100 per cent. Such increases to the cost of living, the prospective devaluation of household savings due to lack of financial safeguards, and the pension not rising amidst this inflation, has led to mounting public concern. While dollarisation and closing the central bank continue to be long-term goals, they have been pushed aside while these economic changes take place.
In neglecting some of his more radical proposals (i.e. reversing initial plans to abolish the Ministry of Health and withdraw from the Paris Agreement), Milei has instead pursued other changes - namely overturning a law preventing government officials from appointing relatives to public administration roles. This was followed by the appointment of his sister, Karina Milei, to general secretary of the president - a position akin to that of a government minister. This comes in direct opposition to Milei’s vocal anti-nepotism stance during his campaign.
In further contradiction to his campaign promises, Milei recently backed out of plans to join the BRICS bloc in 2024. Argentina was one of six countries invited to join in 2023, yet backflipped on the decision in late December under the guise of ‘inappropriate timing’. This decision has been criticised by many, with economists claiming that joining would have created an opportunity to join emerging markets. Most likely, the backflip was an attempt to further distance relationships with China and Brazil due to Milei’s vocal unwillingness to work with “communist” states.
Such drastic economic changes, the reversal of several campaign promises, and the already difficult living circumstances have resulted in anticipated public protest. Ahead of these protests in December, new security measures were established the week prior, including threats to cut welfare payments of participants. A heavily armed police force accompanied last month’s protest, despite thousands marching peacefully, demanding financial support amidst the peso devaluation.
During the presidential race, the phrase “Viva la Libertad, carajo” (Long live freedom, damn it) became Milei’s unofficial campaign slogan. Many have pointed out the irony in celebrating freedom yet imposing stricter protest laws. Furthermore, not all protests have been made equal. Police presence for a daytime march in support of Milei was almost non-existent, a stark contrast to the armed police and the peaceful protests that followed later that week. While such measures may suppress crowds on the street, they cannot evade the legitimate concerns of the public. Instead, they may only heighten violence and tensions, leading to ultimately more destructive demonstrations.
Though only a month into his 4-year term, Milei faces a mountain of challenges. Backing out on campaign promises and contradicting previous statements so early into his term may only heighten pre-existing tensions, especially when even his fiercest supporters are left in economic despair. His abandonment of the BRICS bloc and turning away from China may have detrimental economic impacts. In the absence of economic relations with China, strengthening relations with the US will be crucial in order to receive foreign aid. Furthermore, he faces a largely democratic and Peronist congress - significantly contrasting his own position. Milei may have to compromise on several ideas - even if it means contradicting himself.
Hannah is the Latin America Fellow for Young Australians in International Affairs. She recently completed her Bachelor of International Relations from The University of Adelaide and looks forward to undertaking postgraduate study in the future and investigating grassroots movements in Latin America.