Maverick Milei finishes contentious first year in office on a high note

When Javier Milei was sworn in as Argentina’s president on Dec. 10, 2023, critics who predicted he would be booted out of office within months joked that his fate was about as much of a mystery as the date of Easter: “April or May,” they quipped, “you never quite know when they fall.”

In a country where even shrewd outsiders have repeatedly proved no match for the entrenched powers of trade unions and their Peronist allies, and in a political system that once cycled through five presidents in 11 days, the maverick newcomer stood little chance of implementing the deep structural reforms he had promised voters — so the conventional wisdom went.

One year later, the prophecies of inevitable political demise for the world’s first “libertarian” head of state have decidedly and repeatedly turned out to be greatly exaggerated and flatly wrong.

Instead, the 54-year-old political outsider has fulfilled key campaign promises by clamping down on runaway inflation and shrinking the bloated public sector while forging close ties with fellow maverick Donald Trump. According to the official account of the Argentine government, Mr. Trump has dubbed Mr. Milei his “favorite president.”

As his first year concludes, the Argentine president has permitted himself a victory lap.

“Everyone assumed we were going to fail politically,” Mr. Milei told a cheering crowd last week at a conference in Buenos Aires organized by the U.S.-based Conservative Political Action Committee. “Today, they admit, through gritted teeth, that they are surprised.”

The economist with the trademark helmet of unkempt hair, previously known to Argentine voters as a flashy, foul-mouthed TV commentator, reinvented himself as a first-term congressman two years before ascending to the country’s highest office.

Amid the country’s seemingly never-ending economic and fiscal crises, Mr. Milei rode a wave of discontent with his unpopular predecessor and the political establishment — “the caste,” as he dubbed them — to defeat Peronist Sergio Massa, the government’s economy minister, in a runoff election late last year.

He faced hurdles from the start. Mr. Milei’s La Libertad Avanza coalition accounts for fewer than 1 in 10 lawmakers in the Senate and fewer than 1 in 6 in the House. The president came into office with an ambitious agenda but a weak position in Congress, which needs to greenlight many reform proposals he champions.

Forced to rely heavily on congressional allies, primarily former President Mauricio Macri’s center-right PRO, his government needed almost six months to enact his signature, 42,000-word mega-law to disrupt and deregulate Argentina’s stuttering, dysfunctional economy.

Mr. Milei outmaneuvered the hesitant legislature by using presidential decree powers to push through unpopular measures such as heavy cuts to long-standing transportation and utility subsidies. Public protests and labor strikes erupted, and many pundits proclaimed the Milei experiment doomed.

The ax he took to government spending quickly yielded the intended effect. Inflation, long the economy’s Achilles’ heel, dropped from more than 25% per month in December 2023 to less than 3% last month. The value of government bonds and the Argentine peso are on the upswing, and Argentina’s country risk index, which measures the likelihood of yet another default, has fallen to its lowest level since 2020.

The austerity agenda meant economic hardship for some. Unemployment is up to 8%, thousands of government workers have been let go, work on public projects approved by previous governments has come to a standstill, and the national poverty rate has risen.

The costs of once-subsidized goods and services, such as public transportation, energy, water and health insurance, skyrocketed in the same time frame.

The cost of a Buenos Aires subway ride rose from 52 pesos, then about 6 cents, to 757 pesos, about 75 cents. A $4.50 December 2023 water bill for a small apartment could be as high as $15.60 a year later.

Mr. Milei’s government weathered the storm, and some say he has finally broken the economic fever that has stunted Argentina’s growth and left the government in a near-perpetual state of fiscal crisis and foreign indebtedness.

Inflation turnaround, balanced budget and recovery in foreign currency reserves make for a macroeconomic success story in the eyes of veteran political commentator Joaquin Morales Sola.

“We’ve spent 40 years talking about the government spending more than it takes in, and no one did anything to control that spending. The first one is Milei,” Mr. Morales Sola said. “For him, what matters is … the budget surplus. That’s at the core of his administration.”

The pundit warned that the war is not over.

The cost of living has increased so dramatically that “no salary can hold out against the price hikes,” he said, and Mr. Milei ignores that fact at his political peril. “No [one] in his crew considers what the Argentine economy will be like six months from now — not six years from now,” he said.

Public approval

For now, Argentines’ patience does not seem to be wearing thin. Mr. Milei’s November approval rating was 57%, up 7 percentage points from September.

“Last year, it was a shock to the system. I couldn’t keep up with the prices,” 34-year-old deli worker Jazmin Quintana told The Associated Press. “I’m not saying I like the guy. I find his personality very weird and aggressive, but I admit, if he continues on this route, I’ll be very happy.”

Political scientist Marcos Novaro said Mr. Milei is credited with an unexpected streak of pragmatism. He has given up, or at least deferred, some of his more radical campaign promises, such as introducing the U.S. dollar as the country’s currency and closing the Central Bank.

Nevertheless, the level of support in the face of continued economic hardships surprised Mr. Novaro, the author of the recent book “Why It Is So Difficult to Govern Argentina.”

“One could imagine society [saying]: … ‘It’s worth it to get out of this situation we’re fed up with — years and years of stagnation, inflation, lack of perspectives,” Mr. Novaro said. “But at any rate, [the backing for Mr. Milei] was even greater than I would have expected.”

Past Argentine reformers followed a worrying pattern of short-term popularity and long-term discredit. Many predecessors trumped Mr. Milei in first-year approval, Mr. Morales Sola said. He agreed with Mr. Novaro that part of the “credit” for his success goes to the opposition, which has often made his life easy despite its numerical strength in Congress.

Case in point: After an ugly public leadership battle, the Peronist Party, ostensibly the main opposition movement, picked embattled former President Cristina Fernandez de Kirchner as its leader only days before an appellate court confirmed her six-year sentence on corruption charges.

To make matters worse, the Argentine Supreme Court ruled this month that Ms. Fernandez must stand trial on a charge of helping Iran cover up the 1994 terrorist bombing of a Jewish community center in Buenos Aires. The charge was brought initially by prosecutor Alberto Nisman, who died under mysterious circumstances in 2015, the last year of Ms. Fernandez’s presidency.

“If that’s the type of opponent, it’s understandable that the people resign themselves to ‘Milei or nothing,’” Mr. Novaro said.

“[You] don’t get rid of a president without having some alternative — and right now, there is no political alternative,” Mr. Morales Sola said.

To the extent that the combative president has faced any real challenges, it has been in the streets with general strikes in January and May and nationwide rallies in October against cuts to state universities’ budgets.

“Ten days after Milei took office, we held the first demonstration against him,” Workers’ Left Front presidential candidate Myriam Bregman, who lost to Mr. Milei in the first round of elections last year, told The Washington Times.

Ms. Bregman blamed the main opposition forces, particularly the Peronists, for failing to effectively challenge what she views as Mr. Milei’s “pro-[International Monetary Fund], anti-worker” policies.

“Apart from speeches,” Ms. Bregman said, “[they] either joined Milei’s government or decided not to confront it.”

Ms. Bregman said her party’s five lawmakers in the House had consistently voted against the president’s bills and would continue to do so.

“Deals or contact with the government? Never,” she said.

Tight with Trump

Ms. Bregman’s sentiments echo Brazilian President Luiz Inacio Lula da Silva, a leftist icon in South America whose long-standing enmity with Mr. Milei was on full display at the mid-November Group of 20 summit in Rio de Janeiro. Although dubbing Mr. da Silva a “corrupt communist” earned him a cold welcome in Rio, Mr. Milei’s colorful language and libertarian principles have propelled him to near rock-star status among American conservatives and the European right.

At Davos, he accused business leaders of promoting “radical feminism,” and at the G20, he derided his counterparts’ “notion that more government intervention is the way to fight hunger.”

His outspokenness on the international stage has earned him comparisons to Mr. Trump, whom Mr. Milei visited in Mar-a-Lago just days after the U.S. election.

Mr. Novaro said Mr. Milei’s close ties to the incoming administration mean he does not need to worry so much about being out of sync with the mostly left-leaning governments in Latin America.

“The Trump wave gives Milei the [political] climate and [latitude] he needs,” Mr. Novaro said.

It also gave him some maneuvering space in foreign affairs despite his campaign criticisms of foreign leaders. The Milei government signed a long-sought pipeline deal to sell shale gas to Mr. da Silva’s government, and he met with Chinese President Xi Jinping at the G20 summit to discuss expanded bilateral trade and investment despite his repeated pledge to “not make pacts with communists.”

“Since he has the credentials of being a Trumpist of the first hour, he can go sit down with the Chinese,” Mr. Novaro said, “without anyone saying that he bowed his head.”

Celebrity and pragmatism aside, Mr. Milei’s abrasiveness may land him in trouble in the long run, Mr. Morales Sola said.

“He’s a man who insults anyone who does not totally agree with him in the worst terms,” said the La Nacion columnist, adding that Mr. Milei’s “hyperbole” was “very similar to the language used by President-elect Trump.”

Although his rhetoric may be off-putting, it is not without political rhyme and reason, Mr. Novaro said.

“There is a history of governments that wanted to make reforms and failed because of ‘republican’ formality,” he said. “When [Mr. Milei] says … ‘I’ll use the [left-wing] populists’ instruments to defeat them,’ that makes a lot of sense.”

Like him or not, Mr. Morales Sola said, the one thing Argentine voters don’t want is a return to the past.

“Milei is a product of the failure of what came before,” he said. “People believe this man, who’s doing things differently from other Argentine presidents, might also get different results.”