Today marks exactly one year since Javier Millais was elected President of Argentina. Expectations were high among libertarians, as this was the first time a self-described ‘anarcho-capitalist’ had been elected to the world’s highest office. During his first year, Argentina definitely experienced change. The country is no anarcho-capitalist paradise, but it is certainly less regulated and its government more stringent than in the past.
Indeed, the enthusiasm Argentina has shown in balancing its budget was unexpected. Mailay inherited a deficit of 5% of GDP, but achieved a fiscal surplus in the first quarter of his administration. I’ve maintained it ever since. Spending cuts mainly targeted pensioners and civil servants, leading some to question their sustainability. However, in countries with imbalanced budgets, 113 of the last 123 yearsBalancing the budget so quickly is Milei’s greatest achievement.
Due to the sudden halt in money printing and the expectation that Argentina would maintain its current fiscal position. peso Inflation plummets (after years of depreciation). The monthly inflation rate in December last year was 25%However, the latest available figures are: 2.7% in October. This is the lowest monthly value since November 2021, although the government is targeting much lower inflation going forward. Throughout 2023, Argentina had the highest inflation rate in the world. at 211%It is the highest since 1989-1990. hyperinflation. All of this seems like history now. The country has stabilized.
At the same time, Millais established a new Ministry of Deregulation, tasked with deregulating the Argentine economy as much as possible. Through executive orders and special faculty mandated by Congress, the government has implemented a number of measures to introduce competition into already closed markets. An example would be lifting rent control. cause The supply of available apartments nearly triples and real prices fall by up to 40%. authorization The emergence of new satellite internet companies is expected to revolutionize agriculture through increased use of technology. Argentina currently ranks 148th in regulation, according to the Fraser Institute. World Economic Freedom Index.
So what about all that? ~ no Economic policy? Argentina’s first liberal president may not have made much of a difference in terms of personal freedoms, but the country already ranks relatively high in this area, according to research by the Cato Institute. human freedom index. Rather, state-run media outlets stopped broadcasting left-wing propaganda, and the Mailay government shut down anti-discrimination agencies on the grounds that they were being used for political purposes.
Of course, many challenges remain for Mailay. Currency controls remain active and it is unlikely that Argentina will receive large investments as long as they are currently in place. We have started offering benefits For projects over $200 million. Argentina also still has a long way to go before trade liberalization. became lower Some tariffs. To date, no state-owned enterprises have been privatized, and taxes remain as high as they were when Mailay took office. But the government is aware of all these challenges and will likely attempt reforms at some point after the 2025 midterms. Without these reforms, it will be difficult to reduce current poverty. at 53%Consistently.
Despite implementing perhaps the largest fiscal adjustment Argentina has ever seen, Milei is not only still popular, but seems to be becoming more so over time. According to latest poll According to the Universidad de San Andrés, 54% of Argentines view him favorably. He also has the confidence of the market, which means Argentina’s sovereign risk premium is went down By 2024, it had fallen by almost two-thirds to the lowest level in five years.
Ironically, many expected Mailay’s reign to last only a few months, or even a few weeks. Sergio Massa, the main contender for the 2023 presidential election. I was so confident Milei wrote a book in her defense and planned to release it in March. However, as Miley’s popularity continued, the release was delayed every month. If things continue as they are now, the book may never see the light of day.
Marcos Falcone is a project manager at Fundación Libertad and a regular contributor to Forbes Argentina. His writing has also appeared in The Washington Post, National Review, Reason, and others. He lives in Buenos Aires, Argentina.
