Buenos Aires, September 2023. Hundreds of people crowded around to wave flags and film on their phones. The man with unruly hair and sideburns in the center of them, clad in a black leather jacket, hoisted a roaring chainsaw above his head.
This was an election rally taking place in the San Martín area of the Argentine capital a month before the presidential election - and the metaphor was explicit.
The candidate Javier Milei believed the state was far too bloated, with annual debts that were bigger than Argentina's entire annual economic output. Rather than 'trimming the fat', as some politicians delicately put it, he said he would take a chainsaw to ministries, subsidies and the ruling political class he derided as la casta - the caste.
Milei had form for stunts. In 2019, he dressed up in a libertarian superhero costume, proclaiming to be a resident of Liberland - an imagined tax-free land. In 2018, he famously smashed a piñata representing the Central Bank on live television.
By December 2023, after his implementation of radical economic reforms, inflation peaked at an astounding 211%, with roughly 40% of the population living in poverty. Years of high public spending had left the country entrenched in debt and economic turmoil.
However, nearly two years later, the landscape has shifted dramatically: Argentina celebrated its first fiscal surplus in 14 years and inflation plummeted to around 36%.
Milei's economic strategies have won him accolades from influential figures abroad. UK Conservative leader Kemi Badenoch termed his methods as a template for future Conservative policies, while Donald Trump referred to Milei as my favourite president. Their forthcoming meeting in Washington is set to reinforce this admiration.
Yet amid this international praise, domestic reactions tell a different story. Protests erupted against Milei's reforms, with clashes resulting in police deploying tear gas and rubber bullets. This setback is reflected in the discontent felt among the population who contend that the burdens of austerity measures fall primarily on the working class rather than the elite he claimed to target.
Mercedes D'Alessandro, a left-wing economist and senator, emphasized that the adjustments negatively impacted vital public services, such as healthcare and pensions, ultimately hurting the everyday citizen rather than the wealthy elite.
Critics argue that Milei's policies led to recession, job losses, and a decline in public service quality, leading some economists to suspect a looming recession.
Amid all the turmoil, Milei has paradoxically achieved certain economic milestones, yet has alienated segments of the political spectrum, causing unease in the markets and potentially undermining his initial accomplishments.
As midterm elections approach on October 26, the critical question arises: Will the populace penalize Milei for his reformist approach, and can his political survival withstand the scrutiny of those negatively impacted by his economic strategies?
In Misiones province, tea farmer Ygor Sobol expressed growing anxiety, stating, We're all going backwards economically, due to deregulation that left his yerba mate crops worth less than their production cost.
Conversations across various sectors reveal further dissent towards Milei's proposals. Reports release of significant factory closures, particularly within Argentina's textile industry, owing to reduced tariffs that amplify competition from imports.
In contrast, some economists, emerging from the Milei camp, celebrate the newfound fiscal discipline and attribute projected future stability to , arguing that as perceptions of stability improve, investment will follow, potentially positioning Milei as an exemplar for other nations.
Nevertheless, doubts loom large as rapid change often breeds instability and unpredictability. Scholars caution that without sustained fiscal responsibility, Argentina could face another financial crisis, starkly reversing the economic gains achieved under Milei's administration.
Ultimately, Javier Milei's governance embodies a pronounced dichotomy—celebrated by some for necessary reforms while condemned by others for the painful costs incurred. With the continuing fallout of his policies, Argentina is at a pivotal juncture.
