A Year Into Milei’s Libertarian Experiment, Argentina Is Alive — And Kicking

Updated December 10, 2024 at 6:15 p.m.

-OpEd-

BUENOS AIRES — The late 1980s was a time of real hope for people throughout much of Latin American, as their countries began returning to democratic governance after decades of military rule.

While on the cusp of a new future made of freedom and prosperity, there were some nasty glitches clouding the horizon early on, notably critical debt levels that depressed living standards. Yet those who were overcome with fiscal reforms that cut spending, balanced the books and restored a measure of socio-economic stability to allow regional economies to embrace the free-market system.

More than 30 years have passed since, but the results are not quite what people had hoped for. Economies are not growing enough to reduce poverty, corruption has flourished, crime is rampant, liberties remain conditional and subject to bureaucratic whims and governments are still inclined to control as much as they can.

Faced with such meager yields, electorates everywhere began to show their discontent. In what might initially seem like erratic voter conduct, they voted for the opposition regardless of its left or right-wing label, and when that didn’t work, they sought out figures outside of the political establishment — including president Nayib Bukele in El Salvador and Jair Bolsonaro in Brazil.

From Kirchnerism to Milei’s leadership

This phenomenon is also seen in Argentina, perhaps with a twist. Earlier, the country ditched its reforms of the 1990s and began a cycle of left-wing populism under husband and wife presidents Néstor and Cristina Kirchner. The national economy was largely closed off, subsidies multiplied and economic activity was subjected to new checks that effectively brought it to a grinding halt. Initially poverty fell, but this wasn’t a real or permanent drop.

The electorate finally reacted to elect an outsider who was neither conservative nor a moderate.

At some point these policies showed their dismal results: unstoppable inflation, impoverishment of the majority and a stagnant economy that was increasingly isolated from global flows. So, the electorate finally reacted to elect an outsider who was neither conservative nor a moderate, but the self-styled libertarian Javier Milei.

And one year into his presidency, it seems it wasn’t the wrong decision. Over the past 12 months, his policies have shown some positive yields: inflation is moderating itself, the government is eliminating superfluous costs and business controls and the economy is starting to grow again.

Milei influence on Latin America

The country is also returning to the markets amid an air of increased confidence in Argentina, following the period of Kirchner ‘craziness.’ Even security has improved in the absence of road blocks or violent protests. As Milei marks his first anniversary in office, he has demonstrated that an alternative to the interventionist, out of control, welfare-oriented state, is possible.

The Latin American left was certainly keen on welfare, though only a very selective kind and at a cost — crushing taxes on all workers, covert handouts to select voter segments to create political clients, politicized education system and threadbare old-age pensions.

Especially since Trump’s victory in the United States, the left is resorting to insults

Milei’s one-year mark has also had an impact in the hemisphere, as conservative figures in Latin America now defend economic freedom with far less embarrassment and abandon the ponderous notion of state intervention as key to development.

Meanwhile on the left

The left meanwhile, especially since Trump’s victory in the United States, are resorting to insults, unable to comprehend how people could no longer trust their promises.

In Central America, people increasingly want a no-nonsense, iron-fisted approach to fighting crime, and drastic measures against the extortionists that have for decades, unfairly fed off millions of household economies that effectively constitute the larger economy. Even moderate figures have admitted we need a new way of doing things.

Milei is observed from afar as he proposes a new paradigm for governance, radically different to the fairly useless recipes of recent decades. This change of perspective may seem gradual and slow for now, but is significant and will soon show its political and electoral impact. Right now, it seems like the only way.

*Sabino is an Argentine historian living and working in Guatemala.

Originally published Nov. 18, 2024, this article was updated December 10, 2024 to mark one year in office for Milei