A little music is rising in France, played by some right-wing politicians or media, according to which we should take inspiration from the libertarian policies of Argentine President Javier Milei. But what is really happening, one year after his electoral victory?
« Argentina on the path to freedom behind Professor Milei »headlined the newspaper The Pointlast week, as the first anniversary of the election of the far-right president approached. In an article putting Peronism on trial, the left, but above all any redistributive policy, the author, whom the weekly commissioned to write a series of five articles, assures that “ if fears emerge, it is not so much that the president is going too fast or too far in economic reforms, but rather that he is not fully fulfilling the mission of radical transformation of the country, for which he was elected “. A fairly direct support which could surprise. However, the liberal newspaper is not the only one in France to find virtues in the libertarian movement represented by Javier Milei.
Lyour victorys in trompe l'oeil by Miley
What successes do his supporters attribute to him? Essentially two: having reduced galloping inflation, as well as the state deficit which reached 5.2% of GDP in 2023. An assertion in line with the triumphalist communication of the chief chainsaw man. But a satisfaction that does not hold up well to a detailed examination of Argentina's economic situation.
To reduce inflation, Milei, among other things, chose to reduce the debt that fueled it. Thus, the Argentine president cut public spending everywhere (-35%). A real bloodletting, in employment, infrastructure and public works, education, culture, pensions and so on. With the mechanical result of reducing economic activity and produced wealth (GDP) by 2.6% in the first quarter of 2024, then by 1.7% in the second quarter. A recession which corresponds to a decline in activity of 19.7% for the construction sector. And 13.7% for that of the manufacturing industry.
Consequence? An increase in unemployment, from 6.6% in 2023 to 8% this year, according to official figures which do not take into account the massive informal sector in Argentina. If a slight rebound is expected for the last half-year, the year 2024 should however record a recession of around 3%. Results with disastrous social consequences, which are ignored or written off by those who, in France, hold Milei up as an example.
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Another supposed strong point to Javier Milei's assets: the reduction of inflation. Its supporters point to the fact that the price increase is now only in single digits, while the months of 2023 showed double-digit increases. And this is not wrong, even if they never question the exorbitant price paid for this result. Thus, they give the impression of tamed inflation, compared to 211% for the year 2023.
Certainly inflation is falling in Argentina since activity is collapsing, and with it, the income of many Argentines. However, over the first 10 months of 2024 – when Milei took office on December 10, 2023 – this still reached 107%. It should even exceed 120% at the end of the year, according to analysts from the Argentine Central Bank in September. A moderate success, considering the disastrous consequences for the Argentines.
The poor, Milei's policy adjustment variable
The number of poor or destitute people, that is to say living in extreme poverty, has exploded over the past year. According to the Argentine National Institute of Statistics and Censuses (INDEC), they represent 52.9% of the population in the second half of 2024, compared to 42.5% in the previous half. An exceptional jump of 10 points in a few months, much higher than that caused by the Covid-19 pandemic. Today, 15.7 million people live below the poverty line (Argentina has 46.6 million inhabitants), to which are added 5.4 million people in a state of destitution, who cannot support themselves. to their needs. Child poverty is even more marked, since it affects 66.01% of children between 0 and 14 years old. That of young people (15-29 years old) is 60.7%, eight points above the already considerable national average.
Milei, in his defense, explains that poverty was already increasing before he took office on December 10, 2024. But the curve has never been so significant since 2003. One of the reasons for this progression is that the Household income increased by 87% in the first half of 2024, while the average basket increased by 115% at the same time. Hence the historic drop in the consumption of milk (-17%) or beef – although an institution in the country – whose level has fallen back to that of 110 years ago.
Milk consumption and beef are not the only ones to bear the brunt of the recession. According to an August 2024 report from the Chamber of Commerce and Services of the Ministry of Economy, the purchasing power of Argentines fell by 15.6% and consumption by 7.8%. For example, consumption of leisure and culture fell by 21.7%, that of clothing by 17%. Not surprising since unemployment is increasing, with many factories shutting down and large numbers of layoffs: fewer 110,000 jobs in the private sector in six months. Javier Milei also began his mandate by eliminating tens of thousands of public jobs. At the same time, the reduction in subsidies for energy and transport also weighs heavily on household income. Finally, in September, the far-right president vetoed the increase in pensions to catch up with inflation. Thus, small pensions have fallen below the poverty line.
A libertarian movement on the rise
Javier Milei's avowed supporters were still rare or discreet at the start of 2024. But ten months later, riding on the alleged successes of the Argentine leader, more and more of them are coming out of the woods. In October, in the middle of the debate on the budget in France, Eric Ciotti dared to assert “ I take the example of what is being done in Argentina with President Milei, we need to have a chainsaw to cut public spending which is of no use in France. I think what he's wearing is a lead “. And thus, Eric Ciotti marks a distance from his ally Marine Le Pen, who had shunned Javier Milei during a high mass of the global extreme right in Spain, last May. The Argentine president being too ostensibly antisocial for his political line.
But not everyone bothers with these precautions, like the online newspaper Counterpoint, directed by IREF, a liberal think tank promoting libertarian ideas, early support of Javier Milei. No false modesty in Elon Musk either. The American billionaire warmly welcomed the victory of the far-right president in 2023. “ Prosperity is about to arrive in Argentina “, declared the man who will take the position of “minister for government efficiency” in the next Trump administration. In this position, he set himself the objective of making 2,000 billion in budget cuts, taking the same path as Milei, and while “ prosperity » is far from happening in Argentina.
With the upcoming appointment of this extremely wealthy libertarian, new dikes are falling. Last week, the French Minister of the Civil Service, Guillaume Kasbarian, who had already stated when he took office wanted “ debureaucratize at all levelss”, sent a congratulatory message to Elon Musk and hoped to quickly share “ best practices to combat excess bureaucracy “. A vision of the world into which Valérie Pécresse, the former LR presidential candidate, has immersed herself. “ An anti-bureaucratic ax committee, I dreamed of it and Elon Musk is going to do it! “, she was quick to tweet after Donald Trump’s victory.
And this is probably just the beginning. There is no doubt that with Elon Musk in such a position, in the world's leading power, the influence of the libertarian movement will increase among political and economic decision-makers. This could mark the start of a new era. That of a capitalism under direct management of the State, without intermediaries, without regulation or counter-power, which could capture all resources for its own benefit without restraint.
Photo: Government of Argentina
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