On December 10, 2023, Javier Milei took office as the new president of Argentina. He won the November 19 runoff election with 55.69 percent of the vote, prevailing over former Economy Minister Sergio Massa, candidate of the outgoing government coalition led by Alberto Fernández, who reached 44.3 percent. The percentage of voters was 76.35 percent, with 1.55 percent ballots blank and 1.62 percent void.
Argentina is a representative democracy with a presidential character, a federal republic divided into 23 provincial jurisdictions and one federal district, consisting of the Autonomous City of Buenos Aires (CABA). According to the 2022 census, the country’s inhabitants number 46,044,703, one-third of whom live within the boundaries of the so-called “Greater Buenos Aires” (GBA). This, however, is not an administrative jurisdiction, but rather an urban agglomeration, consisting of the city of Buenos Aires and various settlements located all around it in a total territory of 13,285 square kilometers.
In the GBA, the list headed by Sergio Massa received 54.76 percent of the vote, compared to Javier Milei’s 45.24 percent, and in Buenos Aires Province the election result showed what was substantially a tie; but in the rest of the country Milei won. The newly elected president won more than 60 percent of the vote in seven provincial states: Córdoba, Entre Ríos, Mendoza, Neuquén, San Juan, San Luis, and Santa Fe. So, Argentina’s interior provided as much as two and a half million of the nearly three million votes Milei won over the outgoing government candidate and minister.
Indisputably, Milei’s triumph does not follow the traditional paradigms of Argentine politics and constitutes an unprecedented paradox. The electoral constant, until now, had guaranteed victory and the presidency to the candidate capable of winning the votes of CABA, GBA, and the Province of Buenos Aires. Instead, Milei was supported by the country’s angry interior, which prevailed over the megalopolis. It is the fruit of a political phenomenon that arose in the heart of the country’s interior. This makes it important to reflect on the past, which may offer us a criterion from the historical perspective.
Election results in a historical perspective
In 1983 the government of President Raúl Ricardo Alfonsín (1927-2009), who belonged to the Unión Cívica Radical (UCR), won 51.75 percent of the vote. In 1989, President Carlos Saúl Menem (1930-2021), of Peronist roots, won a first term with 47.49 percent of the vote; in the second term election, after enacting a Constitutional Reform, Menem achieved 49.94 percent of the vote. The coalition that brought the radical Fernando de la Rúa (1937-2019) to the Argentine presidency in 1999 received 48.37 percent of the vote. In 2003 the Menem-Romero alliance withdrew in the second round of elections, and Néstor Kirchner (1950-2010), a Peronist, won the presidency with just 22.25 percent of the votes, which he had received in the first round. In 2007 it was the turn of his wife Cristina Fernández, also a Peronist and Justicialist, to become president with 48.28 percent of the vote; and in 2011 she won her second term with 54.11 percent of the electoral vote. In 2015, the date of Argentina’s first presidential election with a second round of voting, victory went to businessman Mauricio Macri – founder of the political formation, Pro, which is now part of Juntos por el Cambio (JxC) – with 51.34 percent of the vote, prevailing over Kirchnerista candidates, Scioli-Zannini, who won the votes of 48.66 percent of the electorate. In 2019, rightist Alberto Fernández won the first round of elections with 48.24 percent of the vote against the Macri-led alliance’s 40.28 percent.
In essence, if we consider the 40 years since the return of democracy to Argentina, Milei is the president with the largest popular vote by a significant margin. He is also the second candidate in the history of Argentine democracy to be elected president on the ballot. He did so scoring the largest winning margin. What prospects, then, does the presidential election of Milei open up?
The will of the majority
In a television program, political analyst Andrés Malamud said that Milei had succeeded in “reaching the farms,” meaning that the recent election engaged the interest of the most disadvantaged strata of society, not only the middle and upper classes. If the federal vote of inland Argentina is the first surprise of this election, the second is the wide appeal of the winning candidate.
The collective consensus of federal Argentina, that of the interior areas, the productive agricultural and industrial regions, and the popular sectors, no less than the wealthier voters, has mandated a clear change of course and, for the first time in the country’s history, has accorded massive support to a candidate without a party structure, who calls himself a “libertarian liberal.” Milei is not a product of party politics and his political and economic program is the most radical within Argentina’s experience. It is well known that the new president does not come from traditional politics, but rather became known from televised debates, in which he began to speak in 2015. He did not follow the rigmarole of party politics covered by the media, involving political competition, the ritual campaigning for influential positions. These would usually involve firstly election to a municipal office, then parliamentary office, then a provincial executive role, and finally achieve office at the national level. He skipped all these steps, which makes him a unique – and even paradoxical – case in Argentine politics. He entered parliament in 2021 and won the trust of the majority of citizens in just two years of political campaigning.
Milei holds two masters’ degrees in economics, is a university lecturer, an advisor to large business groups, and has had extensive experience, including serving as a technical assistant to the G20, but has never held management positions in public administration. As mentioned above, he was only elected as an MP in 2021. His political grouping, “La Libertad Avanza” (LLA), grew up around him in the city context of Buenos Aires and tried to place its own candidates in the capital province. Almost no one foresaw the extraordinary rise of his status, much less that the Argentine people would accord him such ultimate confidence. Political journalists called him an outsider. As they say in Argentina, he “has no political structure,” and the party he has created is so recent and unstructured as to warrant reasonable doubts as to its future. Milei presents himself as a “libertarian liberal” and defines liberalism with a formula from his economist friend Alberto Benegas Lynch Jr. as “the unlimited respect for the individual life project, based on the principle of non-aggression and in defense of the right to life, liberty and property.”
On the other hand, there is no doubt that Milei would not have attracted such a large number of votes without the support that came to him from many voters who in the first round had come out in favor of Patricia Bullrich and Luis Petri, as well as supporters of Juan Schiaretti, governor of Córdoba and proponent of his own version of Peronism, linked within the productive country and distant from the Kirchnerist model that has governed Argentina from 2003 to the present (with the interlude of the Macri presidency in 2015-19). It is equally uncontestable that Milei’s resounding success reflects the desire of a large majority of citizens, to make a sharp and definitive turn in the country’s political and economic course, rejecting the Peronism that identifies, in one way or another, with the former Vice President Cristina Fernández.
All this means that Argentina is faced with a novel situation: an elected president who has no established personal political experience, who does not count on governors affiliated with his LLA, and who has no experience in state management. As we shall see, the composition of the Congreso, Argentina’s parliament, does not favor him either. Indeed, Milei will have to forge many alliances with members of what he himself has branded a “political caste.” Yet the people voted for him. To understand this, it is necessary to examine some of the socioeconomic data of present-day Argentina.
Some socioeconomic facts about current Argentina
It was improbable that a political party, after 16 years of governing the country, could remain forever immune from the blame for the disasters which had accumulated over such a long administration. Not even Macri had managed to do so in just four years: in 2018 he had to underwrite an IMF loan of as much as $57 billion. The political reasons for Milei’s victory are many. They range from pre-election corruption scandals involving seemingly second-rate figures in the outgoing administration to the prolonged internal conflict that wore down opposition components headed by JxC. But the most important factor concerns the economy. Milei won because he was able to connect with the suffering and anger of much of Argentina, a country plagued by social inequality, insecurity and a serious crisis in education. Argentina’s GDP, according to World Bank data, declined as of 2018, and all the more so in 2020 due to government restrictions imposed because of the pandemic. In 2021 the situation improved and GDP rose to $487,230 million, returning in 2020 to 2017 levels, i.e., $632,770 million.
Although there are different exchange rates against the U.S. dollar in the country, the real one is approximately the parity between 1,200 pesos ($) and 1 US dollar. This type of exchange rate freeze complicated by various conversion rates cannot be eliminated without first finding solutions for very urgent economic and financial problems. On the other hand, the Milei government has already introduced an exchange rate closer to the real one, which will obviously result in a devaluation of the peso and an adjustment of prices (sinceramiento de precios).
The massive reliance of domestic savings on U.S. currency and the consequent devaluation of the peso have been a constant in Argentina’s economic history. On the strength of this observation, and with a desire to avoid excessive currency issuance that generates inflation, the newly elected president has pinned his campaign to the controversial measure of completely substituting the dollar for the peso, and closing the Banco Central.
The country has an estimated inflation as of October 2023 of 8.3 percent. The 12-month inflation index (October 2023) was 142.7 percent. As of November 21, 2023, international foreign exchange reserves amounted to US$ 21,631 million. At the end of 2019 they were US$ 43,785 million.
In October 2023, the primary deficit of domestic public expenditures was 330,338 million pesos, and the financial deficit was 454,248.9 million pesos; thus, the Argentine government, during the first 10 months of 2023, ran up a deficit of 2.9 billion pesos, or 1.6 percent of GDP, if related to current spending, and 2.84 percent, if interest is added. The influence of the recent past speaks for itself. World Bank forecasts say that by 2023 Argentina will lose two percentage points of GDP.
According to the Instituto Nacional de Estadísticas y Censos (INDEC), in the first half of 2023, 40.1 percent of the population was living below the poverty line, and 9.3 percent were destitute. This figure, broken down by age, reveals that the total percentage of poor people in the 15-29 age group is 46.8 percent; in the 30-64 age group, it is 35.4 percent; and in the over-65 age group, it is 13.2 percent.
According to the 2023 Annual Report 2023 of the Observatorio de la Deuda Social Argentina (ODSA) of the Universidad Católica Argentina, released on December 5, 2023, poverty in Argentina affects 44.7 percent, and 9.7 percent of the population are destitute. In other words, today more than 20 million Argentines are unable to meet their basic needs such as health, education and food. Between 2019 and 2023, poverty has grown by 10 percentage points, and with Covid-19 it has worsened, while investment, consumption and full employment have plummeted. Unemployment now touches 8.8 percent. If there were no social safety nets, poverty would affect more than 50 percent of the population. In addition, child and adolescent poverty in Argentina affects 62 percent. Of this, 40 percent is composed of children and youth from birth to 17 years who are children of poor parents; the same age group includes 20 percent belonging to families that have fallen into poverty in the last eight years.
Social spending is diversified into a multiplicity of welfare programs that for the most part, according to recent data, are actually implemented; in total these programs cost about 1.3 percent of GDP. At the conclusion of Macri’s government, 43.8 percent of Argentina’s population had benefited from some form of social safety net. In 2020, during Covid-19, this percentage reached 55 percent.
According to the Argentine Observatory for Education, Argentina was investing 5 percent of GDP in education at the end of 2022. This put it in “Group C,” along with Saudi Arabia, Mexico and Poland. Most Latin American countries are at this level of investment, far behind others such as Canada, South Korea and Denmark. According to this report, in Argentina 1 percent of children of primary education age do not attend school. The same happens to 3 percent of children at the age corresponding to the first cycle of secondary education and the absenteeism rate rises to as high as 18 percent among those who should be entering the second cycle of secondary education. According to data published on December 5, 2023, regarding the Program for International Learner Assessment (known as PISA), promoted by the Organization for Economic Cooperation and Development (OECD), seven out of 10 Argentine students do not achieve a basic level in mathematics. Similar deficiencies in humanities and science subjects affect five out of 10 students.
Data regarding security says that in 2022 the homicide rate was 4.2 per 100,000 population. In 2022 there were 1,890 homicides, with 1,961 victims; 394,525 thefts without serious injuries; 24,663 attempted non-aggravated thefts; 186,367 crimes against property.
According to a global survey by the Institute for Economics and Peace, published in mid-2023, its 17th report on levels of peace in 163 countries in which Iceland and Denmark are ranked as the most peaceful in the world, violent crime in Argentina is less of a concern than in the rest of Latin America.
Investiture speech on the steps of the Argentine Congress and first measures
After 40 uninterrupted years of democracy in Argentina, on December 10, 2023, Milei decided to deliver his inaugural address the U.S. way, on the steps of the Argentine Congress building, emphasizing his “social legitimacy” and literally turning his back on “institutional weakness.” This had never happened before, since until now presidents, after receiving the insignia of authority and taking the oath of office, delivered their inaugural speech before the Legislative Assembly. But Milei, confirming the paradoxical originality of the new government, decided not to do so. As soon as he became president, he greeted in the chamber the judges of the Supreme Court of Justice of the Nation together with the vice president, Victoria Villarruel. Immediately afterward he headed to the steps overlooking the plaza, and there he delivered his speech, based on a diagnosis of the Argentine situation, marked by a retrospective survey and, in an epic vein, calling for a refoundation of the country in which the need for economic adjustment and a “tears and blood” policy dominated.
Milei’s speech contained two quotes. The first was from Julio Argentino Roca: “We know it is going to be hard, so I also want to quote you an extraordinary phrase from one of the best presidents in Argentine history, Julio Argentino Roca: ‘Nothing great, stable and lasting is achieved in the world with regard to the freedom of men and the exaltation of peoples, except at the price of supreme efforts and painful sacrifices’.” Next, Milei quoted Spanish liberal economist Huerta de Soto: “As the great Jesús Huerta de Soto says, anti-poverty plans generate more poverty. The only way out of poverty is to have more freedom.” The new president’s intentions are summed up in the following statement, “Today begins a new era in Argentina. Today we put an end to a long and sad history of decadence and decline and begin the journey of rebuilding our country. The Argentines, clearly, have expressed a will for change without return.”
The first Decreto de Necesidad y Urgencia (DNU) signed by President Milei stipulated that ministries dependent on executive power be reduced to nine (Human Capital, Economy, Chancery, Interior, Infrastructure, Justice, Security, Defense, and Health), with the necessary authority to make adjustments, rationalizations, mergers, and privatizations of state-owned enterprises. As a first administrative measure, on December 11, 2023, the Banco Central decreed what is basically a “foreign exchange freeze,” limiting and subjecting to the strict authorization of its board the acquisition of U.S. dollars at the official exchange rate. Presidential spokesman Manuel Adorni, in a December 11, 2023, press conference, announced the decisions made at the first Cabinet meeting with President Milei at the Casa Rosada. He announced that each ministry has initiated a detailed analysis, aimed at establishing an inventory of assets, surveying contracts, and determining the number of permanent and fixed-term civil servants.
Conclusions and challenges
It is clear that Argentina’s public spending is haphazard and requires efficient management and rational framing. Added to the fiscal deficit is the fact that the subsidized economy constitutes about 3.6 percent of GDP and tax exemptions amount to about 3 percent of GDP. Thus it is clear that a consensual plan to reform the state needs to be developed. But fiscal adjustment cannot be made at the expense of the most disadvantaged social sectors. Milei has created a large Ministry of Human Capital as an integral part of his state reform and, for now, has given assurances that the cost of adjustment will not be paid by ordinary people. In any case, the first few months would be turbulent, because the “adjustment” of the tariff table, especially in energy, will affect the price chain and people’s purchasing power. This also applies to the devaluation caused by the narrowing of the exchange rate gap with the U.S. dollar.
As President Milei explained in his inauguration speech, his administration faces urgent macroeconomic challenges, among which the top priority is to reduce inflation. The steady rise in prices directly affects vulnerable social sectors. The issue of the Central Bank’s burdensome liabilities is another financial priority, as is the need to renegotiate the agreement with the International Monetary Fund, as deadlines for interest payments must be revised and a new overall schedule established.
Another area where Argentine society expects positive outcomes from its electoral vote are policy programs that can control crime and significantly improve education. It remains to be seen whether the Milei government will have the capacity to translate this task into feasible steps. In his inauguration speech, the president also spoke about the state of healthcare in Argentina, noting that supplies are lacking and doctors are underpaid. Undoubtedly, the entire healthcare system is suffering from the general inflationary crisis. It is to be hoped that the measures the national government will take in this regard will be able to protect the resource-poor and the elderly, keeping in mind the consequences and scope of the tariff “adjustment” and an economic adjustment such as Argentina has never experienced before.
On the security front, there is the serious problem of organized crime, particularly drug trafficking and its deleterious consequences. Its networks have not yet managed to spread throughout the country, but they control important Argentine cities, particularly Rosario. The enormous amount of money these organizations handle and the corrupting power that comes with it make a long-term state policy to combat these mafias and prevent their proliferation imperative. The same goes for other criminal activities such as forced labor and human trafficking.
The nation’s Supreme Court of Justice has signaled to Milei and the LLA that “dollarization” is unconstitutional. Therefore, the government will have to reconsider the economic and legal consequences of this initial change. Since the elected president has also opted to respect the separation of powers, it is desirable that the executive power not intervene in matters reserved for the judiciary. Citizens expect an administration that is absolutely respectful of the constitutional order and the rights and guarantees established by the national Constitution.
If Milei’s government really wants to carry out its program, it will have to demonstrate considerable negotiating skills. And it will have to do so in the context of the major challenge on the agenda, that of reducing inflation, which directly affects the most disadvantaged social sectors. The goal of lowering inflation will serve as the litmus test for the first half of the executive term.
The national House of Representatives has 257 members. The Senate has 72. In Parliament, Kirchnerism has 108 deputies and 33 senators. Together for Change (JxC), the newest embodiment of the party founded by Macri (the PRO) has 94 deputies and 21 senators. Milei’s Libertarians have 38 deputies and 7 senators from the last election. The party of Córdoba Governor Juan Schiaretti and Florencio Randazzo, a former Kirchnerista minister, have 8 national deputies returned in the first round of elections last October. The other political formations have 9 deputies and 11 senators.
To carry out all the important economic consolidation measures he proposes, and in particular to get the relevant laws passed by Congress, Milei will have to negotiate with the other political parties. In fact, the success of his government may depend on an effective alliance with JxC. Also of vital importance will be the good relations he can establish with non-Kirchnerist Peronism. The same can be said of his future relationship with state governors, as JxC has 10 of them. A big challenge will come from Buenos Aires Province, led by Kirchnerista Axel Kicillof. It is to be hoped that Milei and his technical teams will be able to adapt intelligently to this reality, adding positive governance to management competence.
The new president’s government begins in a climate of strong social conflict. Among the first tasks will undoubtedly be the elimination of middlemen in the management of funds connected with certain social plans; the rationalization and subsequent privatization of public companies, and the freezing or adjustment of budgets of state universities. Some measures will have to be discussed in both houses of Congress. Argentine trade unionism, organized mainly in the General Confederation of Labor (CGT), has also entered a state of alert, fearing that acquired labor rights will be damaged.
Therefore, it is desirable for the government to be able to dialogue with all political groups and join forces on the basis of common interest. Politics, as the art of the possible, is par excellence the pursuit of the common good. Great reforms require major agreements. It is essential to work for national unity in an Argentina facing a very serious crisis. The will of the majority of the Argentine electorate has given social legitimacy to the government. However, this is not a blank check, but a reversible “social permit.” This is especially the case since this “social legitimacy” is combined with profound institutional weakness.
It is time to think about the country’s recovery, shunning any pettiness. It is about healing a social fabric that has reached a critical state. The historic call which Argentina must face requires constructive dialogue and trust placed in the future. The gravity of the crisis confronting the country demands generosity and a vision equal to this momentous challenge from all those with political responsibility. It would be an unforgivable mistake for anyone in this situation to choose to accentuate the institutional weakness of the new administration and undermine its governance in order to preserve their own privileges in the context of a country plagued by 62 percent child and adolescent poverty. This is the real tragedy: that of a decimated generation whose future has been stolen. It would be equally wrong to confuse the common good with private interest and to translate the social compact into a mere agreement of convenience for individuals.
The priority of the Argentine leadership, in all its components – from institutional ones to social movements and political parties, from trade unions to business circles – must be to avoid intolerance toward those who think differently, street clashes that violate the law or undermine republican institutions, and, above all, the recurrence of political violence in the country. Points of encounter and containment must be found that work to mitigate the divisions from which Argentine society still suffers. It is true that crises draw a boundary; but while they indicate limits, they are also the starting point of a new beginning: they offer an opportunity for growth. In this Argentina torn by disagreements, the current historical moment can be the occasion for the revaluation of politics as a high vocation to build and firmly ground a lasting consensus based on a positive awareness and determination to address the major problems plaguing the country.
. Cf. Poder Judicial de la Nación Argentina, Justicia Nacional Electoral, Cámara Nacional Electoral, December 2023 (www.electoral.gob.ar/nuevo/index.php).
. Cf. Centro de Investigación y Acción Social (Cias), Comparativa Balotaje 2015-2023 (cias.ar).
. Malamud uttered these words on November 21, 2023, on Sólo una vuelta más, the talk show broadcast by TN (Todo Noticias).
. Cf. Auditoria General de la Nación (AGN), Special Report of May 17, 2023 (www.agn.gob.ar).
. Cf. The World Bank (data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=AR), December 2023.
. Cf. Banco Central de la República Argentina (Bcra), November 24, 2023 (www.bcra.gob.ar).
. Cf. G. Martínez, “Las reservas del Banco Central, en el peor momento del gobierno de Alberto Fernández”, in Perfil (www.perfil.com/noticias/politica/las-reservas-del-banco-central-en-el-peor-momento-del-gobierno-de-alberto-fernandez.phtml), June 25, 2023.
. Cf. C. Lamiral, “En octubre hubo un deficit de $330,000 milliones y acumuló 1,6 del PBI en el año”, in ámbito (www.ambito.com/economia/en-octubre-hubo-un-deficit-330000-millones-y-acumulo-16-del-pbi-el-ano-n5881317), November 21, 2023.
. See the official Argentine government page, November 2023 (www.argentina.gob.ar/noticias/en-octubre-el-sector-publico-nacional-registro-un-deficit-primario-de-330338-millones).
. Cf. A World Bank Group. Flagship Report, (June 2023), Global Economic Prospects, 73.
. Data from Instituto Nacional de Estadísticas y Censos, November 2023 (www.indec.gob.ar/indec/web/Nivel3-Tema-4-46).
. Data from the Observatorio de la Deuda Social Argentina, of the Universidad Católica Argentina, December 2023 (repositorio.uca.edu.ar/handle/123456789/720).
. Cf. D. Cabot, “El país de los planes sociales: la mitad de los argentinos recibe al menos uno”, in La Nación (www.lanacion.com.ar/economia/el-pais-planes-sociales-mitad-argentinos-recibe-nid2573856/?gad_source=1), January 21, 2021.
. Cfr L. Marin, “Pruebas PISA: casi el 73 percent de los estudiantes secundarios no alcanzan un nivel mínimo en matemática”, in La Nación (www.lanacion.com.ar/sociedad/pruebas-pisa-aun-casi-el-73-de-los-estudiantes-secundarios-no-alcanzan-un-nivel-minimo-en-matematica-nid05122023), December 5, 2023.
. Cf. Ministerio de Seguridad, Estadísticas criminales de la República Argentina, 2022 (www.argentina.gob.ar/seguridad/estadisticascriminales).
. See Institute for Economics and Peace, Global Peace Index 2023 (www.economicsandpeace.org).
. Cf. “El discurso completo de Javier Milei como presidente de la Argentina el día de su asunción”, in La Nación (www.youtube.com/watch?v=jySRdtIemLU).
. “Discurso del presidente Javier Milei en su asunción”, December 10, 2023 (www3.hcdn.gob.ar/dependencias/prensa/archivos/discursoasuncionmilei.pdf).
. On December 7, 2023, IMF communications director Julie Kozack released a statement sent to the Milei government. She also made some statements to the press; among other things, she said, “A strong, credible and politically supported stabilization plan is needed to sustainably address Argentina’s macroeconomic imbalances and structural challenges, while protecting the most vulnerable in society. […] Inflation is, of course, one of those imbalances and requires a strong and credible Central Bank to reduce inflation” (R. Mathus Ruiz, “El FMI insistió en que el programa económico de Milei tenga respaldo político”, in La Nación [www.lanacion.com.ar/economia/el-fondo-insistio-en-que-el-programa-economico-de-milei-tenga-respaldo-politico-nid07122023], December 7, 2023).