Brandon is a third-year International Relations student at King’s College London. He is from the United States with a Chilean background, and has a strong interest in Latin American issues and, in particular, US foreign policy in the region. He is especially eager to draw attention to an underlooked, yet increasingly important, region in international politics.
Nearly two months on from his historic victory in the 2023 general election, Argentinian President Javier Milei doesn’t seem to have lost his controversial, anti-establishment rhetoric or momentum. In a recent interview with the Wall Street Journal, Milei doubled down on his commitment to privatise dozens of state services and eliminate many others, asserting that there was ‘no Plan B.’
But amidst recent domestic challenges to his planned labour reforms, a recent surge in inflation to 211%, and diminishing public support in the country, it begs the question: Can Milei carry out his campaign promises?
Milei’s Domestic Upheaval
Milei’s pledges during the 2023 election focused on bringing Argentina out of a severe financial crisis. This crisis has paralyzed the Latin American nation’s economy for the last several years, driving up inflation and leaving more than 40% of the population in poverty. So far, Milei’s attempts for reform have been consistent with those promises. Just hours after his inauguration, in which Milei proclaimed that Argentina was entering a new era of rebuilding, Milei cut the number of government ministries by half, eliminating, unsurprisingly, the Ministry of Women, Gender, and Diversity.
On 12 December 2023, just over a week after his inauguration, Milei’s Minister of Economy announced that the peso would be devalued by more than 50% against the US dollar, among other cuts to public spending. Currency devaluation can make investment in a country less expensive, as the prices of goods and services become cheaper relative to other currencies. As for debt, which Argentina holds over $400 million of, currency devaluation can make repayment somewhat easier.
On 4 February 2023, Milei’s omnibus bill passed, following days of negotiations, in the Chamber of Deputies, Argentina’s lower house. But the bill included substantial compromises in response to left-wing opposition. For example, the number of state institutions set to be privatised was reduced and Milei’s request for special legislative powers for two years was reduced to one. Milei’s administration has clarified that these policies aim to reduce the role of the state in the Argentine economy and improve the financial situation.
Widespread opposition to Milei’s far-reaching economic plans highlight the difficulties of improving the financial situation in the country. Austerity measures, in which public expenditures are cut, can leave a difficult economic situation behind for a temporary period. Milei calls this ‘shock therapy’ for the country, but the violent protests outside of Argentina’s Congress highlight the real impact these measures will have for the country.
Milei’s International Shift
While Milei’s domestic ambitions face scrutiny in Argentina’s Congress, the new President has more room to manoeuvre when it comes to foreign policy. During his campaign for the presidency, Milei advocated for closer relations with Israel and the United States and greater distance from China. Milei also criticised the foreign policy of his predecessors, making controversial remarks about China during the campaign.
Under former Presidents Alberto Fernandez, Mauricio Macri, and Cristina Fernandez de Kirchner, Argentina cultivated close relations with China, ultimately joining the Belt and Road initiative. The Belt and Road initiative is a set of global agreements launched by China to strengthen relations with countries across the globe, a form of economic diplomacy. Argentina had also expressed interest in joining BRICS, an emerging geopolitical bloc that rivals the Western-oriented G7.
On 29 December 2023, Milei announced that Argentina would not join BRICS. While Milei stressed the economic benefits of joining the group, Milei highlighted that closer cooperation with the United States and Israel would be more opportune in the face of the current economic crisis.
But Milei has already been forced to adopt a more diplomatic tone against China, its second biggest trade partner. In his interview with the WSJ, Milei stressed that while China was not necessarily a significant strategic partner, it was important to separate geopolitical issues from trade ones.
Milei’s victory in Argentina comes despite a global shift in the popularity of right wing, populism-embracing leaders – take Donald Trump and Jair Bolsanaro’s recent electoral defeats, for example. While Milei may seem to be an exception to the “pink tide” that has swept Latin America in recent years, Milei’s challenges in fulfilling his campaign promises indicates the difficulties of Argentina’s political situation.
As the nation’s financial situation becomes more dire, Argentina remains at a crossroads. Milei’s opponents and critics are hesitant to enter a period of austerity, but any impasse will have severe economic consequences. In the foreign affairs sphere, where Milei has more room to manoeuvre, the new President faces tough choices when it comes to choosing friends and foes.
Photo credit: The Guardian
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