Javier Milei: Argentina’s Trump?

Modern Argentina has had a problematic and sometimes sordid history. From the dirty war of the 1970s to hyperinflation, the South American nation has been ill-served by most of its leaders. 

Javier Milei was elected president of Argentina in October 2023 after campaigning to overturn the status quo and transform the economy and politics of the troubled nation. He reminded some of Donald Trump:

“Milei promised to end the dominance of these two main political coalitions, or what he called “the political caste.” Gaining prominence first through social media, Milei blasted his opponents as thieves and rats. He pledged to make Argentina return to the wealth of the early twentieth century by dollarizing the economy and destroying the state. His brash style and big promises gave many Argentines hope that he could end their suffering. Despite concerns that he would damage the country’s democracy, he won the runoff election with 56 percent of the vote. He carried 21 of the country’s 24 electoral districts—including some where he had never even campaigned. Yet because legislators were elected during the first round, and because Milei did not have candidates in all provinces, Milei’s delegation included only seven of the country’s 72 senators and 38 of its 257 representatives—the smallest caucus of any sitting president since the transition to democracy in 1983.”

So how did he do in his first year?

“During his first months in office, Milei fulfilled his promises to slash the deficit and reduce inflation. He transformed a fiscal deficit of 2.7 percent of GDP into a surplus of 1.2 percent of GDP by freezing pensions and public salaries as inflation continued, effectively reducing them. He also increased taxes on imports and income, ended all public works projects, fired 30,000 public employees, and reduced energy and transportation subsidies for consumers. As a result, monthly inflation came down from 26 percent in December 2023 to around four percent in June, where it has remained. Milei has, in turn, retained steady popular support, with approval ratings that hover at roughly 50 percent, although there are recent signs of public weariness. According to most polls, inflation has dramatically declined as the main problem identified by Argentines and has been replaced by fears of job loss and poverty.

“This shift in public concerns signals that Milei’s policies have been a double-edged sword. By slashing state spending, Milei helped send the country into a deep recession: the government projects a 3.8 percent decrease in GDP for 2024. In time, this could turn into a serious political liability. Milei has faced low levels of social unrest by Argentine standards—two general strikes and one important protest. But as Argentines become more concerned about poverty and job security, this unrest could grow.”

His decision-making does have a Trumpian flavor:

“Milei’s political negotiators often find their positions and promises discredited by Milei himself—much of government officials’ work focuses on responding to his whims rather than making technical decisions. Milei supervises economic decisions but neglects to meet with ministers in other areas, delegating power to his sister, whom he calls “the boss,” and a young political adviser whose allies are increasingly filling critical bureaucratic positions. Milei’s government also features many unfilled positions, inexperienced officials, and high turnover. His choice of Supreme Court nominees, including a judge tainted by corruption allegations, has caused an uproar among business and legal professionals who believe such choices would weaken the credibility of the judiciary.”

There are lots of obvious differences between Argentina and the US, and significant differences between Milei and Trump. But keep an eye on Milei; it may portend our future.

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