What Argentina’s President Milei has achieved
Published: Tuesday, Dec 10th 2024, 05:20
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Argentinian President Javier Milei has been in office for a year now. With his wild hairstyle and chainsaw, he has attracted attention far beyond the borders of South America. To this day, his mantra is: "No hay plata" (There is no money). His radical austerity and reform program is also attracting interest in Europe. Even FDP leader Christian Lindner wants to "dare more Milei" in Germany. But what has the ultra-liberal head of state actually achieved in his first twelve months?
Economy
Inflation has fallen significantly. The inflation rate fell from over 20 percent per month at the beginning of Milei's term of office to 2.7 percent per month most recently. The government has stopped financing the state budget with the printing press. However, the positive development is also partly due to the stalled economy: because many people simply no longer have any money, they are consuming less. This is why Argentina is in a severe recession - the World Bank expects economic output to shrink by 3.5 percent this year. On the other hand, Milei has managed to present a balanced national budget for the first time in years.
Poverty
Milei has cut a number of social programs, increased pensions only below the rate of inflation and reduced support for social projects such as soup kitchens. Following the removal of subsidies, prices for electricity, water and gas have exploded. Many people are worse off than at the beginning of Milei's term of office. The proportion of Argentinians living below the poverty line has risen by more than ten percentage points to 52.9 percent. 18.1 percent of people even live in extreme poverty - meaning that their income is not enough to provide them with basic foodstuffs.
Streamlining the state
The self-proclaimed anarcho-capitalist Milei sees the state as a fundamental evil and, according to his own statements, wants to "destroy it from within". Immediately after taking office, he abolished a whole series of ministries, dismissed tens of thousands of civil servants and put almost all public construction projects on hold. He also wants to privatize many state-owned companies. However, nothing has come of this so far.
Dollarization
One of the most important promises in his election campaign was the abolition of the peso and the introduction of the US dollar as legal tender. There is no longer any talk of this. Financial experts considered the project to be unrealistic anyway, as Argentina would not be able to raise enough dollars for it.
Improving investment conditions
After decades of a highly regulated economy, Milei wants to liberalize the country and attract investors. He has introduced a package of incentives that provides tax breaks over 30 years for major investments of more than 200 million US dollars. However, there are still many restrictions on foreign trade. Imports are still subject to high customs duties. Foreign currency transactions abroad are also strictly regulated.
Diplomacy
In foreign policy, Milei is strongly guided by his ultra-liberal to right-wing populist ideology. Instead of maintaining good relations with his important neighbors and trading partners such as Brazil, he visited future US President Donald Trump and tech billionaire Elon Musk, railed against socialism and a supposed wokeness at right-wing forums and provoked a diplomatic scandal by insulting the wife of Spain's Prime Minister Pedro Sánchez. When it comes down to it, however, he is surprisingly pragmatic: he supported the final declaration of the G20 summit in Rio de Janeiro and the agreement on a free trade agreement between the EU and Mercosur - but not without publicly distancing himself from it shortly afterwards.
©Keystone/SDA
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