Following the recent elections in Argentina, Javier Milei’s inauguration as President signalled an economic transformation in the country. Milei’s promised “shock therapy” and radical economic measures represent an attempt to tackle the difficult economic conditions in Argentina. In this analysis, the economic future of Argentina is evaluated through the statements, promises and first steps of Milei’s government.
Milei’s government has introduced comprehensive reforms in the Argentine economy through a wide-ranging decree. The most prominent among these reforms are as follows:
- The government aims to support the business community in order to increase economic growth and employment. The business community saw the steps taken in this direction as a positive impetus for economic growth and employment.
- The business community viewed the government’s efforts to reduce government interference in the economy in a positive light, in particular through the concept of “injeransias indebidas” (unlawful interference), which refers to the reduction of controls, restrictions and threats. [1]
This positive attitude of the business community is a reflection of confidence in the basic principles of a free market economy. These reforms could pave the way for economic development in the long run by allowing business to become more competitive and efficient. The “shock therapy” emphasised by Milei in his first statements upon taking office shows that the Argentine economy is in need of urgent solutions. The radical implementations promised during the election campaign in November are likely to play a key role in determining the economic policies of Argentina under Milei’s administration.
In his speech at the swearing-in ceremony, Milei stated that they would focus on the economy unlike the previous presidents. This is an important indicator of the economic transformation that will take place in Argentina. “There is no alternative but austerity and shock therapy” emphasises the government’s commitment to economic reforms. However, it should be noted that these reforms may pose short-term challenges and are expected to have positive effects in the long term.[2]
Milei acted like a populist leader in his campaign promises, especially on issues such as restricting abortion rights, liberalising gun laws and denying climate change. His repetition of campaign slogans in his inauguration balcony speech, as well as his frequent use of personal gestures and facial expressions, suggest that Milei’s leadership style is Weberian. The long-term devaluation of the Argentine economy, high poverty levels and deep economic recession according to IMF data force Milei’s government to take office on a serious economic ground. Especially the depreciation of the Argentine peso and economic imbalances increase the need for the radical changes promised by Milei.
The fact that the right-wing and libertarian parties led by Milei are in the minority in the Argentine Congress may cause the government to face opposition when implementing its measures. This situation will likewise affect the process of passing Milei’s promised reforms through Congress. The decree signed by Milei after his inauguration to reduce the number of public departments shows that the government has taken concrete steps in terms of efficiency and savings in the economy. However, the impact of this step on the Argentine economy and how it will lead to a change in public services is not yet clear.
Moreover, his meeting with Ukrainian President Zelenski after his swearing-in signals that Milei’s government will follow an active path in international relations. This may signal a potential change in Argentina’s foreign policy.
The election of Javier Milei as the president of Argentina seems to have initiated an economic and political transformation in the country. Milei’s promised cure and radical economic practices can be considered as a bold step taken against Argentina’s difficult economic conditions. However, the difficulties to be encountered in the process of realising these reforms and the reactions of the society should also be taken into consideration. Likewise, the first protests against the government took place on 20 December 2023 and Milei stated that they would take harsh measures against such protests.[3]
Milei’s populist leadership style during the election campaign attracted international attention in many respects. However, how this leadership style will be received within Argentina and the impact of the reforms on society will become clearer in the coming period. Despite the short-term difficulties in the economy, as Milei stated, the reforms are expected to yield positive results in the long term.
The actions taken by Milei in the first days, especially the decision to downsize public units, show the government’s determination and also provide a preliminary impression of how the political and economic balances will be shaped in Argentina. Steps in international relations may also affect Argentina’s image in the global arena.
In conclusion, Argentina has entered a new era under Milei’s leadership, which includes efforts to stabilise the economy and respond to social expectations. Whether the reforms can be successfully implemented and how Argentina will evolve under this new leadership will be among the issues that will be closely monitored in the near future.
[1] Jueguen, F., “Fuerte apoyo empresario al ajuste de Milei y al fin de amenazas e injerencias indebidas del Estado, La Nación, https://www.lanacion.com.ar/economia/fuerte-apoyo-empresario-al-ajuste-de-milei-y-al-fin-de-amenazas-e-injerencias-indebidas-del-estado-nid21122023/, (Date of Access: 22.12.2023).
[2] “Javier Milei: New President Tells Argentina ‘Shock Treatment’ Looms”, BBC NEWS, https://www.bbc.com/news/world-latin-america-67678276, (Date of Access: 22.12.2023).
[3] “First Protests Expected İn Argentina As Groups React To Milei Austerity Plan”, Reuters, https://www.reuters.com/world/americas/first-protests-expected-argentina-groups-react-milei-austerity-plan-2023-12-20, (Date of Access: 22.12.2023).
