Against the odds, Milei has won over much of Argentina's political establishment and public

Almost a year on, despite the economic pain inflicted by his shock therapy, Argentina's outsider leader has one of the highest approval ratings in Latin America.

Javier Milei (via Alamy)

How do you solve a problem like Argentina? South America’s second largest country has had chronic debt and inflationary issues since the Second World War and been marked by decades of ultra-short-term populist politics, leading to the popular adage: "If you leave Argentina and return after twenty days, everything will have changed. If you leave Argentina and return after twenty years, nothing will have changed".

Thus, when outsider Javier Milei rose to power last November, commanding barely 10% of Congress and threatening to slash the bloated state and burn down the central bank, few gave him any chance of success. The man who has had a career as a goalkeeper, tantric sex therapist, economist, TV personality, lecturer, and author, faced his biggest challenge yet: restoring Argentina’s national credibility. 

Inheriting an annual inflation rate of around 250%, an enormous debt to the IMF, and a recession, Milei’s most arduous task would be gaining the support for his "Shock Therapy" package, which he deemed as necessary to save Argentina’s economic death spiral. Negotiating with Congress to pass such measures would be challenging, but convincing the Argentinian people that the short-term suffering that his austerity measures would bring was necessary for long-term gain was the real Herculean task. 

Such austerity policies have rarely been popular in Argentina, with politicians time and time again preferring to print money and increase state spending rather than make unpopular cuts - hence why Argentina has been rocked by several hyper inflationary crises throughout its history. At the onset of his regime, with Milei facing stiff opposition in Congress and protests by the country’s uber-powerful unions, the chances of success looked slim. 

Almost a year after his election victory, however, the man who takes counsel from his four English mastiffs has seen qualified success. His austerity programme has not been without its victims - poverty in Argentina has risen to 53% and unemployment has also spiked. Amongst the more contentious of his pledges have been cutting the budget to the prestigious University of Buenos Aires, one of Latin America’s top educational institutions, and vetoing a pension reform that would raise the low monthly stipends for the retired. 

Despite the pain and the controversies, Javier Milei has achieved what he set out to achieve - relative macroeconomic stability. Monthly inflation in September 2024 was a mere 3.5% - lofty for many countries, but one of the lowest figures in Argentina since the pandemic. And the figure is still falling.

In addition, several other economic indicators are trending in the right direction: the country risk index has dropped, foreign direct investment (Foreign Direct Investment) has increased with the help of Argentina’s new business-friendly regime for investors, and the country has staved off defaulting on its IMF-owed debt, for now at least. 

The most impressive achievement for Milei, however, has been ensuring the buy-in of both the political establishment and the Argentinian public to his cause. The country which once had five presidents in two weeks has been loathe to tolerate financial pain; even in the run-up to the 2023 elections, the incumbent left-wing government enacted its "plan platita" (plan pocket money), printing money in an attempt to buy votes for the election despite an annual inflation rate approaching 200%. 

The libertarian’s presidential campaign revolved around criticising the "political caste", with his campaign regularly chanting "la casta tiene miedo" (the political caste is afraid), and "que se vayan todos" (vote them all out), however upon becoming president he has been forced to work with the very caste he vowed to eliminate. Prior to his run-off victory, he made an alliance with Patricia Bullrich, the centre-right candidate that he eliminated in the first round of the elections, and he has worked with the traditional right in Congress to pass important legislation. 

More key than this, however, has been his campaign to shore up the support of the public. Miraculously, despite the economic pain inflicted by his shock therapy - now an estimated 7 in every 10 children in Argentina are growing up in poverty - his approval rating have held steady, at 52%, one of the highest in Latin America. Key to this has been resentment towards decades of economic mismanagement and the appetite for a new path, alongside a slick social media campaign, with messaging such as "I prefer to tell an uncomfortable truth than a comfortable lie" resonating with voters. 

The new regime has also been aided by errors made by the opposition - notably, the previous President Alberto Fernandez was exposed in a domestic and sexual violence scandal, weakening the Left’s claims of being a pro-feminist political force. 

Still, deep challenges remain for the man who vowed to return the South American nation - once one of the world’s wealthiest countries per capita - to its former glory. While his public support has held up, Milei will need economic growth to return, unemployment to shrink, and poverty to be alleviated if the Argentinian electorate is to retain their faith. His political alliance is also fragile, vulnerable to internal feuds and spats.

Almost one year in, however, Milei has already broken a glass ceiling for what was deemed politically viable for Argentina. By merely implementing a harsh austerity platform without buckling to pressure from the unions, politicians, and public opinion, he has stepped further than any Argentinian president this century. The fact that his approval ratings have stayed high is nothing short of a miracle. Whether he can continue along this path is uncertain and history would suggest that the odds are stacked against him. But his first year has demonstrated beyond a doubt that the Argentinian mould of short-term populism accompanied by inflationary spending can be broken.