Political Observer: I have no permission the re-print this, but here is The fill text of the Buenos Aires Herald’s essay!
Jan 18, 2025
Argentina marks one year under Milei’s chainsaw
After a turbulent 2024, these measures, policies, and political trends shaped the far-right libertarian economist’s first year as president
It’s been a year to the day since Javier Milei, the libertarian economist and TV pundit, became president of Argentina. His unlikely rise to the political center stage culminated in a stunning electoral upset that catapulted him to international fame.
A year ago today, he entered the national Congress and donned the presidential sash before breaking with custom to deliver his inauguration speech not to the career politicians inside but to the people waiting in the square.
In that year, the president plunged Argentina into a recession as part of a top-down process of wresting the country’s economy into line with free market orthodoxy. The process involved some of the most extreme deregulation the country has seen since the 1990s.
But Milei has also delivered plenty of surprises. Chief among them is that, despite protests that were often repressed with violence, his government has not faced the kind of massive uprising that would force them to renegotiate their fundamental proposals. Recent figures show that around half of Argentines still approve of him. Despite an abrasive stance toward his opponents and a tiny congressional minority, his pragmatism has allowed him to strike the deals he needs to govern. And, astonishingly, he has managed to cut Argentina’s inflation.
In this article, we summarize the key developments and challenges of Milei’s administration over the past year, exploring the impacts of his radical policies, the social responses they elicited, and the overall trajectory of his presidency.
Ley Bases: from failure to flagship
The Ley Bases bill was Milei’s biggest legislative win of 2024. Formally called “Law for the Bases and Starting Points for Argentines’ Freedom,” it was Milei’s flagship state deregulation proposal. But it had a rocky road, littered with hurdles that at times seemed insurmountable.
Milei filed the bill in Congress days after becoming president in December. The original version was a whopping 664-article list of aggressive economic deregulation reforms, laying the groundwork for privatizing over 40 state-owned companies.
A week earlier, he had issued a vast presidential decree that likewise sought to deregulate vast swathes of the economy. Decried as an abuse of the urgent presidential decree, it was voted down in the senate, and Argentina’s courts ruled the labor chapter unconstitutional—but the rest is in force unless the Chamber of Deputies also strikes it down.
The Ley Bases’ first round in Congress was a failure for the new government. It initially passed as a general item in early February but was sent back to commissions while the individual items were being voted on due to a rookie error by La Libertad Avanza’s lawmakers.
It finally passed at the end of June, along with a package of fiscal norms that was cut from the original bill and addressed separately. The number of articles was whittled down to 238, and the list of companies on the auction block was cut to 11, but the key points prevailed.
The final text of the Ley Bases grants Milei legislative powers over administrative, economic, financial, and energy-related issues for one year, as well as the ability to close or restructure certain public organizations. It also implemented major reforms on a plethora of issues including labor, state structure, rent, and public works.
Inflation, afuera
True to his promise, Milei started slashing public spending as soon as he got his feet under the table.
As of November, the government said, 33,000 public employees had been dismissed. The blender, as the president calls it, was also applied to pensions, which were allowed to lose value against inflation. A modest pension increase was the target of his first presidential veto.
The national administration has also clamped down on funds for Argentina’s provinces, placing Milei at a standoff with the nation’s governors in February. An olive branch he called the May Pact was, despite its name, signed in July.
In parallel, Milei vowed to halt money printing. After abruptly switching the nation’s coffers to run a fiscal surplus, Economy Minister Luis Caputo and Central Bank Chief Santiago Bausili announced in July that they would move the Central Bank’s interest-bearing liabilities to the Treasury as a measure to clear the monetary authority’s balance sheet. They argued this would allow the government to close the “second faucet” of monetary issuance, which Milei has long held is the key driver of inflation.
His economic measures culminated in inflation that, after spiking to 25.5% due to December’s devaluation, fell to a three-year low of 2.7% in October. But that achievement came at a devastating human cost: a recession in the first four months of the year contributed to poverty surging by 11 points to 53% in the first half of the year.
The government is now seeking to court investment with policies such as the RIGI large investment regime. In November, Caputo and the IMF both confirmed that they were in early talks about a potential new agreement. Meanwhile, there’s no confirmation of when Argentina’s all-important cepo currency controls will be lifted.
Presidential vetoes
Milei’s first year may be remembered as much for the legislation he nixed as that which he ultimately signed into law. On September 2, the self-styled anarchocapitalist issued his first presidential veto for a bill that would have prevented retirees’ pensions from falling behind the rising cost of living. At the time, he argued that it threatened the government’s plans to eliminate the fiscal deficit and was therefore “irrational.”
Hundreds descended on Congress to protest the body’s vote to uphold the veto, prompting a police crackdown that resulted in the pepper-spraying of several seniors.
Approximately one month later, Milei used his executive power again, this time to prevent a funding increase for public universities. The president announced his decision on the heels of a mass mobilization that saw thousands of students and faculty across the country take to the streets to defend the institution.
In the Official Gazette, the administration derided the legislation for failing to specify how it would finance its pay increases. The spending bill would have represented 0.14% of Argentina’s GDP. In 2023, the Congressional Budget Office released a report outlining tax expenditures in different sectors that amounted to 2.49%.
As with the pension veto, the public responded in kind, with students occupying administration buildings in different universities over a period of several days. Herein lies one of the lessons of Milei’s young presidency: every austerity measure will provoke an equal and opposite reaction from those affected.
Ministers: over and out
The recent dismissal of Florencia Misrahi as head of Argentina’s tax agency was the latest of 67 departures from an ever-reshuffling cabinet amid a maelstrom of changing ministries and secretariats. Many were abrupt and often surprising: the president fired the Labor Secretary in a television interview in March. That came just days after Infrastructure Minister Guillermo Ferraro stepped down after allegedly leaking information to the press. He had been under pressure to go as early as January.
2024 was also marked by consistent government infighting — from Milei publicly snubbing his own VP to blocs splitting in Congress — which contributed to the constant turnover. Milei’s Chief of Staff, Nicolás Posse, stepped down in May following a growing rift between them over the Ley Bases. Diana Mondino was suddenly fired as Foreign Minister in late October following a UN vote in favor of Cuba, but she had already lost influence within the cabinet following months of tensions. Along with former Health Minister Mario Russo leaving for “strictly personal reasons,” that makes four senior cabinet members departing within the first year.
Despite arriving at the Casa Rosada with a fiery “anti-caste” rhetoric, the ones who remain firmly behind its walls have repeat surnames. The inner sanctum of the Milei administration is his sister, Secretary of the Presidency Karina Milei, and Santiago Caputo, Economy Minister Luis Caputo’s nephew.
Visiting the free world
If we have learned anything about Milei over his first year in office, it’s that he enjoys his new position on the global stage. At the time of writing, the president had made 16 trips abroad since December 10, 2023. His favorite destination by far has been the United States, where he has traveled seven times. He has also made six trips to Europe and one to Israel, but only three to Latin American countries: Brazil, Chile, and El Salvador.
The choice of his destinations and reasons for travel have proven to be closely tied to his worldview. Milei’s dogmatic understanding of how the world works has informed a foreign policy based on labeling governments and institutions as friends or foes depending on where they land on his ideological spectrum. He has thus mostly appeared before right-wing and libertarian audiences, lauding them as staunch defenders of “freedom” while avoiding meeting with leaders he dislikes unless it is absolutely necessary. His meeting with his Brazilian counterpart Lula da Silva at the G20 summit in Brazil was so frosty that it became a meme.
The president has directed some of his harshest rhetoric against his imagined global enemies. Branding himself an enemy of what he calls “socialism” and the “woke agenda,” he has sparked conflicts with the leaders of Brazil, Colombia, and Spain — in the latter case unleashing a full-blown diplomatic conflict. Milei has also viciously attacked the United Nations and made a point of changing many of Argentina’s international positions, a stance analysts warn could eventually harm some of the country’s long-term objectives.
Freedom of hate speech
From early in the 2023 presidential campaign, concerns existed about La Libertad Avanza’s rhetoric as perpetually discriminatory and harmful. When three lesbians were killed in a brutal arson attack in May, campaigners were quick to point out that it came after months of homophobic government discourse. The administration’s dismissal of the hate crime birthed a central protest slogan regarding its vehement anti-LGBTQIA+ stances: “It’s not freedom, it’s hatred.”
The perpetuation of dictatorship apologia, also present in the campaign, continued apace, with a photo of deputies visiting convicted dictatorship torturers becoming another worrying milestone. Denialist social media posts erupted after the presidential inauguration, and a radicalized group with direct ties to the government has formed a right-wing online militia. Online threats have sauntered into the real world, from green Ford Falcons outside the Senate to LLA youth celebrating a new “armed wing” in an event with fascist trappings.
While fixated on the idea of freedom of speech, that right does not extend to the press or demonstrators. Argentina slid 26 places on the World Press Freedom Index, while Security Minister Patricia Bullrich’s draconian anti-protest protocol raised alarm bells as it enabled harsh crackdowns and arbitrary arrests by multiple security forces.
The forces of 2025
After a rollercoaster year, it’s time to look to 2025. Key questions to watch include whether Milei will secure a stronger foothold in Congress through the mid-term legislative elections, if and when currency controls will be lifted, and how a second Trump presidency will shape the political chessboard of the Americas.
Whatever happens next year, the Herald will keep you updated with rigorous, high-quality reporting. Stay tuned!
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