After implementing sweeping reforms in Argentina, President Javier Milei faced a major outcry. Tens of thousands of people marched in the streets, hundreds of flights were grounded and schools and businesses closed to protest Milei’s radical attempt to heal the troubled South American country.
Milei is a rarity; there aren’t many self-styled libertarian heads of state in history. To avoid economic disaster in a country facing huge deficits and a 160% inflation rate (which has since risen to over 211%), he told the country that things would probably get worse before they could get better .
In his inaugural speech on December 10, Milei acknowledged the daunting challenges that lie ahead: “No government has received a worse legacy than the one we are receiving… We neither seek nor desire the difficult decisions that will have to be made in the coming weeks. But unfortunately, we have no choice.”
Ten days into his mandate, Milei issued a “mega-decree” made up of over 300 executive measures. He abolished national rent controls, which had caused a 75% drop in available apartments in Buenos Aires in 2022 and 2023. He repealed price controls, cut subsidies and fired more than 5,000 public workers. He has allowed direct competition with the Argentine government-owned airline, which he intends to privatize. And he challenged the country’s powerful unions.
Milei’s transformation program has met resistance, particularly from Argentina’s largest union, the General Confederation of Labor, which represents about one in five Argentine workers. The union called a nationwide strike on January 24, bringing parts of Buenos Aires to a standstill.
The main reason for the protest? Milei had issued an order that put an end to the automatic withholding of union dues, leaving workers free to renounce union membership. He also banned public employees in sectors such as health and education from going on strike. While his measures have been temporarily suspended by a court ruling, the unions are showing strength to ensure that Milei’s agenda does not reach the National Congress.
Despite economic challenges and opposition, Milei remains steadfast in pursuing a freer, less regulated and less debt-ridden Argentina. Addressing world leaders in Davos, Switzerland, at the World Economic Forum in January, he said the Argentina of the future will be based on libertarian principles.
“If you take measures that hinder the free functioning of markets, free competition, the free price system, if you hinder trade, if you attack private property, the only possible fate is poverty,” Milei said.
Despite the union’s opposition, Milei’s main political opponents are not Argentine workers. Indeed, Milei calls for a short-term increase in welfare to ease the pain of the working class during this transition to a new economic model. As told by the Argentine political economist Marcos Falcone ReasonMilei’s real opponents are wealthy Argentines who have benefited from the government’s generosity.
“Milei goes against crony capitalism, because he’s basically trying to kill businessmen who live off government support,” Falcone says. “We need to move forward. And people need to be able to profit, not just companies, through regulations and privileges.”
In his speech at the Davos conference, Milei encouraged entrepreneurs not to be intimidated by “the political class or the parasites who live off the state.”
“You are heroes. You are the creators of the most extraordinary period of prosperity we have ever seen,” Milei continued. “Do not surrender to the advance of the State. The State is not the solution. The State is the problem itself.”
Milei faces a slew of regulations to cut and massive political resistance in Argentina. It will not be easy to achieve the economic transformation that his nation desperately needs. We will have to wait and see if she has chosen the right chainsaw to meet the challenges ahead.