The writer is an economist, anchor, and geopolitical analyst
and the President of All Pakistan Private Schools’ Federation
president@Pakistanprivateschools.com
Argentina’s President Javier Gerardo Milei has been leading the country since taking office on December 10, 2023, by implementing significant economic reforms and policies that have garnered international attention. President Milei has spearheaded a radical transformation of the nation’s economic and political landscape. A self-described anarcho-capitalist, Milei’s presidency marks a seismic shift from Argentina’s long-standing Peronist tradition, characterised by heavy state intervention and chronic fiscal mismanagement. Milei’s presidency is characterised by his libertarian ideology. His aggressive free-market reforms, symbolised by his campaign’s iconic chainsaw, have yielded notable successes but also sparked significant social costs and geopolitical realignments. Under Milei’s leadership, Argentina has seen major economic changes, focusing on austerity, deregulation, and reducing government spending. Milei inherited an economy in tatters: an annual inflation rate of 211%, a fiscal deficit exceeding 4% of GDP, and over 40% of the population living below the poverty line. After a contraction in early 2024, Argentina’s GDP grew by 3.9% from July to September 2024, with projections of 5% growth in 2025 and 4.7% in 2026, driven by agriculture, mining, and energy sectors. The Merval stock index surged 174%, reflecting investor confidence, and credit rating agencies like Moody’s and S&P upgraded Argentina’s sovereign credit rating for the first time in five years. His “shock therapy” approach aimed to dismantle decades of protectionism, subsidies, and bureaucratic excess. Key reforms include: Milei’s administration slashed public spending by nearly a third, reducing the number of government ministries from 18 to 9 and cutting over 42,000 federal jobs. These measures led to Argentina’s first budget surplus in over a century, totalling $3 billion in 2024, a stark contrast to the $120 billion deficit the previous year. Some key measures include: Inflation dropped from 300% in May 2024 to 55.9% in March 2025, with monthly inflation hitting a two-year low of 2.2% in January; Milei cut government jobs by 20%, reduced salaries of high-ranking officials, and shut down the tax agency (AFIP), replacing it with a smaller one; Milei signed Decree 70/2023, deregulating the Argentine economy, which led to an increase in rental unit supply and a decline in real prices. Milei’s presidency has also had significant geopolitical implications: Argentina has strengthened its ties with the United States and Israel, with Milei expressing admiration for conservative leaders like Margaret Thatcher and meeting with Israeli Prime Minister Benjamin Netanyahu; Argentina has opted not to join the BRICS bloc of developing economies, aligning with Milei’s skepticism towards global governance and multilateral institutions; Milei’s criticism of China has led to strained relations, with China suspecting Taiwan’s involvement in Milei’s campaign. Milei’s policies have sparked debates and concerns among regional and global leaders: Milei’s presidency as a shift towards right-wing populism in Argentina, which could have implications for regional politics; Argentina’s economic reforms have attracted international attention, with some viewing Milei’s policies as a potential model for other countries; Milei’s government has secured a $20 billion loan from the International Monetary Fund (IMF), improving Argentina’s relations with the global financial institution. Despite progress, Milei’s presidency has faced challenges and controversies: Poverty rates increased initially, peaking at 57.4% in January 2024, but have since declined to 38.1% in the third quarter of 2024; Milei’s government has faced setbacks in Congress, including the rejection of Supreme Court nominees; Milei’s policies have sparked protests and criticism from various sectors, including unions and opposition parties. Monthly inflation, which peaked at 25% in December 2023, dropped to single digits by late 2024, with annual inflation falling from 289.4% in April 2024 to a projected 23.3% for 2025. The Central Bank’s 50% peso devaluation and cessation of money printing were pivotal, though they initially exacerbated inflation. Deregulation and Investment Incentives, including the RIGI program, offering 30-year tax concessions for investments over $200 million, have attracted interest in lithium, natural gas, and agriculture, aligning with global demand for critical minerals. Argentina’s Vaca Muerta shale fields and lithium projects are expanding, positioning the country as a key player in the green energy transition.
These achievements have made Argentina a global case study for libertarian economic policies. Milei’s success in reducing inflation, achieving budget surpluses, and fostering growth, Argentina’s economy is outpace major powers like China. However, GDP growth was negative in 2024 (-1.6%) and questions about the sustainability of these gains, citing Argentina’s history of boom-and-bust cycles. Milei’s reforms, while economically promising, have exacted a heavy toll on Argentina’s population. Austerity measures, including cuts to subsidies for energy, food, and transport, have driven up living costs, with rent hikes tripling for some tenants. Real wages dropped by 15% since Milei took office, and unemployment rose from 7.3% in late 2023 to 9.1% in early 2025. Poverty rates spiked to 53% in early 2024, though they later declined to 38.9% by late 2024, with claims that 1.7 million children were lifted out of poverty. Public sector layoffs and reduced funding for education, health, and social programs have strained vulnerable populations. The closure of the Ministry of Women’s Affairs and cuts to gender violence programs have drawn criticism, particularly given Argentina’s high femicide rates. Public universities faced funding cuts of 50%, prompting protests, though a national mobilisation secured some concessions. Milei’s approval ratings, ranging from 45% to 55%, reflect a polarised populace, with support bolstered by frustration with the Peronist “political caste” but tempered by economic hardship. Politically, Milei’s La Libertad Avanza (LLA) coalition lacks a congressional majority, forcing reliance on executive decrees and alliances with centre-right groups like Juntos por el Cambio. The October 2025 midterm elections will be critical, as a stronger LLA presence could solidify reforms, while a resurgent Peronist opposition, despite its current disarray, remains a threat. Internal party tensions, including reported infighting between Milei’s sister Karina and advisor Santiago Caputo, add fragility to his administration.
With a mix of challenges and opportunities ahead, Milei’s leadership will be crucial in determining the success of his economic reforms and the long-term impact on Argentina’s growth and development. As the world watches with interest, one thing is certain – Javier Milei’s presidency marks a significant turning point in Argentina’s history, and his legacy will be shaped by the decisions he makes in the years to come.
Milei’s presidency has positioned Argentina as a testing ground for radical libertarian policies, drawing international attention from economists and policymakers. His reforms align with a global rise in far-right, anti-establishment movements, though his focus on economic liberalisation sets him apart from culturally conservative populists like Jair Bolsonaro. However, Milei’s pivot toward the U.S. and away from BRICS+ and Mercosur could reshape global trade dynamics. Argentina’s lithium and natural gas reserves make it a strategic player in the green energy transition, attracting Western investment but risking alienation from China, a key buyer. His deregulation and RIGI program aim to capitalise on these resources, but investor caution persists due to Argentina’s volatile economic history. Argentina’s success in reducing inflation and stabilising finances has earned praise from the IMF and financial institutions, potentially inspiring similar reforms in other debt-ridden nations. Milei’s foreign policy has shifted Argentina away from traditional regional alignments toward closer ties with the United States and Israel, reflecting his ideological rejection of “communist” blocs. His decision to halt Argentina’s accession to BRICS+ and reconsider participation in Mercosur has strained relations with Brazil and China, Argentina’s major trade partners. Foreign Minister Diana Mondino’s announcement that Argentina would not join BRICS+ underscored this pivot, despite China’s role as a major creditor via a $6.5 billion currency swap. Milei’s alignment with the U.S. has yielded tangible benefits, including a $20 billion IMF loan and support for purchasing U.S.-made F-16 fighters and Stryker vehicles. Milei’s anti-China rhetoric and refusal to deepen ties with Russia have reduced Argentina’s reliance on these powers, though China’s currency swap remains critical. His pro-Israel stance, including plans to visit Israel, has raised concerns about potential Iranian or Hezbollah retaliation, particularly amid Middle East tensions. His visit to Mar-a-Lago and praise for President Donald Trump as a “MAGA person” highlight a personal and ideological affinity, though some question its durability given Trump’s protectionist leanings. Tensions with Brazil’s President Luiz Inácio Lula da Silva, who declined to attend Milei’s inauguration, signal a competitive dynamic in the Southern Cone. Argentina’s exit from Mercosur could weaken regional integration, potentially benefiting U.S. influence but risking trade disruptions. Domestically, Security’s policies have reduced gang violence in Rosario and bolstered border security, with 10,000 troops deployed under “Operation Roca” to curb smuggling from Bolivia and Paraguay. These efforts align with U.S. interests in countering regional illicit activities. Despite its achievements, Milei’s administration faces significant hurdles: Investors remain wary, with foreign direct investment (FDI) only marginally higher than in previous years. Lifting capital controls and freeing the exchange rate are critical to attracting sustained investment; Rising inequality and poverty could fuel social unrest, especially if economic benefits remain concentrated among elites; Milei’s uncompromising style and limited provincial allies may hinder legislative progress, while internal party conflicts could weaken his coalition; Over-reliance on U.S. support and tensions with China and Brazil could expose Argentina to economic vulnerabilities, particularly if global trade wars escalate. No doubt, Javier Milei’s presidency has transformed Argentina from an economic basket case into a beacon of libertarian reform, achieving budget surpluses, curbing inflation, and spurring growth in strategic sectors. However, these gains have come at a steep social cost, with austerity measures exacerbating poverty and inequality. Geopolitically, Milei’s Western alignment and rejection of BRICS+ and Mercosur have repositioned Argentina as a U.S. partner but strained ties with regional powers. As the 2025 midterm elections loom, Milei’s ability to sustain economic progress, mitigate social fallout, and navigate geopolitical complexities will determine whether his “chainsaw” model becomes a blueprint for others or a cautionary tale of radical reform. Argentina’s journey under Milei is a high-stakes experiment, watched closely by a world grappling with economic and political uncertainty. As President Javier Milei continues to navigate the complexities of Argentina’s economy and politics, his libertarian ideology and unconventional approach will undoubtedly shape the country’s future. With a mix of challenges and opportunities ahead, Milei’s leadership will be crucial in determining the success of his economic reforms and the long-term impact on Argentina’s growth and development. As the world watches with interest, one thing is certain – Javier Milei’s presidency marks a significant turning point in Argentina’s history, and his legacy will be shaped by the decisions he makes in the years to come.
