Whether by design or improvisation, the Javier Milei administration is laying out its own governing methodology which, as expected, is unlike any of what his predecessors attempted.
Befitting to an outsider who only two years ago was no more than a talking head on TV, only popular for his assertiveness and wild hair, the level of risk he seems ready to tolerate is substantially higher than his immediate predecessors, Alberto Fernández and Mauricio Macri, the latter of which is still struggling to give shape to some sort of explicit alliance with the first self-proclaimed anarcho-capitalist president in history. After 12 years of Kirchnerism, Macri had little choice but to be extremely careful given his fragile position in Congress and serious risks regarding governability. Alberto, who counted with Cristina Fernández de Kirchner as his vice-president and de facto factotum of power, executed a delicate balancing act while having to negotiate with both his internal rivals and the opposition coalition, Juntos por el Cambio.
Both Fernández and Macri initially sought collaboration with their opponents under the tacit assumption that it was a prerequisite for maintaining order and governability. Eventually, both of them suffered hard breaks with their adversaries and ended up alone and in deep crisis. Milei, however, is taking the opposite approach by deciding to pin his political opponents as enemies from day one, despite brief periods of apparent pragmatism which serve to set the stage for deeper rifts with whoever disagrees with him. It isn’t entirely clear whether this strategy is working as it is difficult to identify what success actually means in the ultra-libertarian era, if it’s about reforming the state, eliminating the budget deficit or attacking and debilitating the president’s political rivals. What shouldn’t be discarded is Milei’s substantial political capital, built in great part on his “synthetic” power derived from the digital ecosystem, and the growing discontent of a large portion of the population that will test social tolerance for aggressive austerity.
While the public’s voracity for opinion polls has diminished greatly after the elections handed Javier Milei the Presidency, figures have slowly been making their way into the public realm. A recent survey put together by Opinaia political consultancy firm shows that the president still counts on a net positive public image, with a 52 percent positive figure compared to 45 percent negative views. While this has fallen from 59 percent positive and 35 percent La Libertad Avanza leader remains one of the few politicians with a net positive figure in the country. In all fairness, both his predecessors attained substantially higher levels of net positive image and maintained those for longer, indicating that not only is Milei a deeply divisive character, but also that the level of social polarisation has deepened. Empirical evidence for the “grieta” – that particular Argentine brand of polarisation – appears in the results to a question regarding positive or negative emotions about the president, in which 87 percent of those who voted for Massa said they felt repulsed by Milei, while 81 percent of those who voted for the libertarian shared happy thoughts. Similar levels of polarisation can be seen in respondents asked whether he will be able to govern and execute his policy objectives, and whether he’ll be able to stabilise the economy.
That, of course, is the main challenge: taming inflation and putting the country on a sustainable economic path. The president, along with Economy Minister Luis ‘Toto’ Caputo, engineered an economic shock that shot inflation through the roof as the peso was aggressively devalued against the dollar. The real-world impact of this plan is currently being felt by society at all levels but is particularly more pernicious for lower income groups with limited-to-no savings and a decrepit safety net (that the Milei administration is purposefully diluting). The Milei-Caputo plan is trying to hammer down inflation through a painful recession, hoping that once the numbers begin to look encouraging, expectations will help spark a bonanza of investment and ultimately growth. It’s a risky strategy that, at first glance, initially seems to be working: January inflation eased to 20.6 percent after having hit 25.5 percent in December, and could make its way down to the 15 percent range in February. At the same time, the Economy Minister managed a budget surplus for the first time in January after 12 years as the “zero-deficit strategy” is consolidated as a pillar of this administration. Yet, it was achieved by aggressively eroding retirement and pension payments and cutting all sorts of payments, including to provinces. This has put them on a collision course with the provincial governments which had already sounded the alarm during the congressional battle over the omnibus bill. Sceptical economists like Diego Giacomini suggest this budget surplus is absolutely unsustainable without underlying reforms which have been ruled out by the level of bellicosity between the Executive, the legislative branch and the provincial governments.
Milei built his political persona on the back of antagonism with the political class, which he smartly marked as “the caste,” which has become his scarlet letter. While he still maintains several of his campaign promises, he’s toned them down, particularly the idea of torching the Central Bank, yet he hasn’t backtracked with dollarisation, a move that a majority of Argentines reject. He’s picked his enemy: any and all politicians who refuse to accompany his plan. He baited them during the congressional showdown over the omnibus bill, where the government sent envoys to negotiate with political blocs and provincial governors, only to pull the bill at the last second. Milei attacked on social media and unleashed his digital libertarian army on those who opposed him legislatively, particularly potential allies including the Unión Cívica Radical (UCR) and the centrist bloc led by Miguel Ángel Pichetto. A war with Chubut Province Governor Ignacio ‘Nacho’ Torres, a PRO party macrista, was ultimately defused. And Milei continues to claim he will govern by emergency decree, abandoning the idea of a plebiscite in the short-term given the possibility of defeat.
Whether this is part of a grand scheme or the consequence of amateurism will probably never be fully revealed. It is probable that it’s a mix of both. In the meantime, the non-stop political bickering is allowing Milei to identify those opposed to him as members of the toxic “caste,” while diverting the public opinion from the very real effects of sustained double-digit inflation and deep economic contraction. Time, as always, is the most important variable. Whether Milei will be able to sustain this level of political confrontation and how long society will wait for the economy to turn around before things get out of hand appear are the leading concerns.
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