Javier Milei: radical reformer or same old populist
Elected whilist wielding chainsaws and tearing up government departments, Milei has promissed to reshape Arganetia's economy and politics, but is he on track to change anything?
2023 saw a big upset in Argentinian politics. In the presidential elections radical, libertarian candidate Javier Milei won a shock victory beating the incumbent Peronist (left-wing) government and the opposition, mainstream right party. The first taste of the upcoming earthquake was first delivered in the Argentine national primaries (used by most parties to select their candidates) in which Milei won unexpectedly with 30% of the vote (10 points more than predicted) [1]. From this victory, he would propel himself to victory in November.
Often placed in the same camp as Donald Trump, I find Milei a more interesting character politically, intellectually and as a person than the quite narrow description of him as being a far-right populist offers.
Milei is definitely a populist. His character is what has definitely made him more famous than other Argentine presidents. There’s a good chance Milei, Juan Peron (made famous by a musical about his wife) and, possibly, Galtieri are the only ones you can name.
Milei started out as an economist, first trained in the Keynesian ideas of tax and spend fiscal policy at university; after this, he would have a set of jobs working in the private sector as a banker, think tanker (is that word?), professor and financial advisor [1]. However, it was in the 2010s that Milei became more famous when he was brought on by Argentine TV to talk economics as a commentator, this would have only minimally raised his profile if it was not for his unique style of presentation. He became well known for railing against corrupt elites and engaging in ludicrous antics that attracted TV channels to him, not just for his knowledge, but also for entertainment and therefore viewer attraction [1].
In 2021 he launched his own coalition, La Libertad Avanza, to support his parliamentary elections in Buenos Aries. As a member of the Chamber of Deputies, he further grew his fame (and likely also his popularity) by giving away his wage to supporters. La Libertad Avanza would also propel his later successful presidential election [2].
Milei policies:
Economics:
In short, free market.
Milei ran on a radical plan to deregulate the economy, cut government spending and expand the role of the private sector. These plans include the goal of cutting government spending by 15% of GDP [3] through a process of halting public work projects in the works and future ones that are planned [4] and an extensive, Thatcheresque privatisation policy. This includes the sale of the state broadcaster and state energy company with Milei saying ‘everything that can be [put] into the hands of the private sector, will be in the hands of the private sector’ [4]. This marked a considerable change from the relatively statist approach of the governing Peronist party.
Although these economic reforms seem already expectionally bold, the president promised to go further in upending the economic status quo outlining an idea to dollarise the Argentine currency, replacing the Peso (the weak and unstable Argentine currency) with the US Dollar [4]. This would happen alongside a plan to abolish the central bank [4]. These policies are intended to deal with the country’s persistent inflation problems which see the country facing inflation nearing 150% [2]. This is a problem Milei has often blamed on the state and the central bank which he accuses of just printing more money; by completely removing the state from monetary policy he hopes to end government involvement.
These collective reforms intended to shrink the government's presence and role within the economy and instead place a great deal of trust in the private sector to deliver economic growth and jobs.
The state:
In short, cut it.
Like his views on the role of the state in the economy, Milei has a very pessimistic view of the role of the state in general regarding it as an excessive force that is not good at what it claims its good at.
This pessimism manifested itself in plans to cut the size of the state and of the government. In one of his most famous campaign stunts during the election, Melei outlined the range of government departments that he intended to cut or merge in a now infamous campaign video:
These reforms include merging the education, labour, health and social development departments into one ministry, the Department of Human Capital [3], that would likely act as an overseer of planned privatisation policies of health and education (a department he referred to as ‘indoctrination’). These reductions in the number of ministries and a likely shrinking of the state's role in the areas covered by the remaining ones will offer up space to then cut the size of the civil service
Social and security policies:
In short, conservative.
Milei’s social policies are a mix of typical libertarian social views on some issues and more traditional conservative views on other issues.
On the libertarian wing of these views, there is a plan to reduce gun regulations to make it easier to own and buy guns and even more bizarrely he has endorsed the idea of legalising the sale of human organs [4] (an idea I never thought was a massively salient issue). This idea stems from the continued problem that many countries have, including Argentina, of the lack of organs being donated; to deal with this problem Milei suggested using ‘market mechanisms’ as a means to encourage people to provide donations. He made this argument alongside the ideas of personal ownership and enabling people to do what they want with their bodies [5].
However, Milei’s social policies are not libertarian, deregulation of humans and the expansion of liberty. In classic conservative style, Milei has called for other reforms.
These include reversing the recent legalisation of abortion (2020) a policy that provides him a strong link to many Republicans in America [4]. This idea would seem to, at least partially, clash with his support of personal freedom when it comes to organ donation. Arguing that abortion should be illegal, but that organ selling should be legal because people should be able to do what they like with their bodies does seem a strong contradiction and may well open him up to, not unreasonably, some hard questions.
His other classic conservative social reforms are in relation to policing. According to the president, the security services have ‘lost their essential function: repressing crime.’ and reiterating the idea, classic to conservatives, that the main role of policing is the suppression of crime [3]. Security forces are planned to expand their operations in dealing with drug crime across the country, a persistent problem for South America and Milei has signalled a changing role for the military whichich could indicate a tougher, war on drugs, approach. This may very well differ from the typical libertarian view of policing that often criticises them for excessive use of force and the ease with which policing can infringe personal liberties.
Even in the area of security policy, the libertarian has been able to find areas where he can bring in market reforms. Milei intends to introduce a US-style public-private prison system [3]. These reforms would include selling off all the prisons currently in operation and enabling real estate companies to build mega prisons with better security outside of cities [6].
How’s it going:
With it being around 200 days since Milei won the presidential election and with his campaign offering radical change to the country, the question has to be asked: Has there been radical change?
From the outset, Milei faced considerable obstacles to his reforms, despite winning the presidential election his coalition in the parliament was considerably weaker. Out of the 72 senators, his coalition has just 7 and out of the 257 deputies his coalition has 38, meaning he has just 13.6% of the seats in both chambers [2]. This is made worse by his lack of (that being 0) governors and mayors in a federal political system [2]. This meant that from day 1 what Milei could achieve was limited and would almost certainly force him to either choose deadlock, in the hope he can win seats in later midterms, or compromise.
One of the first things that the president did was issue a mega-decree that was 86 pages long and was intended to radically reshape the economic and social landscape of the country [7]. This decree was centred on plans to remove ‘distortions’ in the economy and free up the markets so that they could operate more freely. Key to this is the privatisation of the state energy company and the repeal of laws that make it more difficult for other government-owned businesses to be sold off. It also includes policies to generally deregulate elements of the economy including the credit card industry, the health sector and supermarkets [7].
The president needed to gain approval from one of the two houses of the parliament for the reforms to be introduced, however, the mega-decree has been held up with neither houses willing to pass the radical reforms within the mega-decree [8]. This has not stopped Milei from seeking to pass legislation similar to the mega-decree that could secure some liberalising of the economy and on the 30th of March he was able to pass the Omnibus bill [9]. Although less than half the size of his first Omnibus Bill (separate from the mega-decree, I think (I’m 75% sure)) the new version still paves the way for privatisation, government job cuts, labour reform and subsidy reductions. Part of these reforms are through a one-year period of economic emergency that expands the president's economic powers over state agencies and businesses [9].
Milei has been able to achieve more successes. Clearly within his powers and able to achieve quickly has been Milei’s shrinking of the government with a rapid reduction in the size of the cabinet. This has led to him halving the size of the cabinet to just 9 members [8]. Through the Omnibuss Bill, there has also been a reduction in the number of state employees with 50,000 government jobs ending and a fulfilment of his promise to reduce the number of public works with all new contracts being suspended [8][9].
Some of these economic reforms have delivered positive outcomes for the state of the economy. Reforms have buoyed support from the IMF, a key creditor of the state, as well as some independent economists [8], this is likely through his success in gaining budget surpluses. There have been further economic successes with Milei making progress in dealing with inflation with monthly inflation beginning to drop and progress being made in closing the gap between the official and unofficial exchange rates of the peso [8]. This economic shock therapy may be making progress, but it is painful with these policies pushing more people into poverty and it appears true Milei’s statements that things may first have to get worse before they can get better [10].
The economic future of Argentina remains uncertain, but if Milei’s promises can bring inflation under control and halt Argentina's ever-expanding debt problem (through budget surpluses) then there could still be a brighter future for the Argentine economy. I suspect a lot will rest on the midterms, with a good performance for La Libertad Avanza there will at least be some stability within chaos with there being a clear plan (even if it is a radical plan).