Argentina’s leader Milei, Trump’s ‘favorite,’ marks first year on a high note

Andres Oppenheimer

One year after taking office, Argentina’s eccentric President Javier Milei — the first foreign leader who met with President-elect Donald Trump after the Nov. 5 elections — can be criticized for various things. But, so far, his achievements exceed his shortcomings.

Before we get into Milei’s downsides, let me start by citing his accomplishments.

The Argentine president, a free-market economist who describes himself as an “anarcho-capitalist” and a “libertarian,” is successfully reversing his country’s biggest problem: the skyrocketing inflation he inherited from decades of disastrous Peronist governments.

As Milei told me in an extended interview earlier this year, when he took office on Dec. 10, 2023 Argentina was on the verge of hyperinflation. In the week before his inauguration, inflation was heading towards an annualized rate of 3,700%, Milei told me. Today, inflation has fallen to an annual rate of 107%, and is expected to drop further, according to official figures.

“We were in a hyper-inflationary tunnel, heading at 500 miles per hour toward a wall,” presidential spokesman Manuel Adorni told me last week.” Nowadays, we had a 2.7% monthly inflation rate in October. That has been an extraordinary success.”

Granted, Milei’s success in taming inflation has come at a big social cost. His drastic cuts of public spending, including the layoffs of 33,000 government employees, has produced an increase in poverty to a record 53% of the population in the first six months of this year. But poverty has started to decline in the second half of this year, is already below 50% and will decline further as the economy gets on its feet, Argentine officials say.

Most economists agree that Argentina’s economy is bouncing back. The International Monetary Fund projects that the country’s economy will contract by 3.5% this year, and grow by 5% next year.

On foreign policy, Milei deserves credit for putting an end to Argentina’s Peronist government’s cozy ties with Venezuela, Cuba and Nicaragua, and for calling those countries’ leaders for what they are — brutal dictators. Milei says his government’s two main allies in the world are the United States and Israel.

Milei also deserves applause for unambiguously supporting Ukraine after Russia’s invasion, and for siding with Israel after the Hamas terrorist group’s attack that killed about 1,200 civilians, including 250 youths at a music festival, and triggered the current war in Gaza.

Perhaps most importantly, Milei is reversing decades of free spending populism, and changing many Argentines’ long-held beliefs that the country can grow and reduce poverty without attracting investments. While Milei’s claim that governments are “enemies” of growth is an exaggeration — in fact, countries like Sudan or Haiti would be much richer if they had a functioning central authority — it sort of applies to Argentina’s long history of state mismanagement.

What are Milei’s words and deeds that should make us nervous?

First, his view of the world as divided between conservative and “communist” countries, rather than seeing it as split between democracies and autocracies. Milei rightly lashes out against leftist dictators but praises right-wing autocrats like Hungary’s Viktor Orban.

The Argentine leader has also refused to criticize Trump’s failure to accept his loss in the 2020 U.S. elections or Trump’s backing for the Jan. 6, 2021, rioters who attacked the Capitol in an effort to carry out a coup.

We should stand up against autocrats of all political colors because there is no such thing as a good dictator.

Milei’s close ties with Trump and Elon Musk are bringing him international attention, especially now that the U.S. president-elect has vowed to slash government bureaucracy much like Milei has done in Argentina. The British magazine The Economist ran a recent cover with Milei’s image, under the headline, “What Javier Milei can teach Donald Trump.”

Perhaps Milei’s alliance with Trump and Musk will help bring much-needed investments, loans or tariff exemptions to his country, which would be good news for Argentina. Milei quotes Trump as having told him during a Nov. 12 telephone conversation that “You are my favorite president.”

The danger is that Milei may be tempted to follow the steps of some of his far-right friends and try to break the rules of democracy down the road.

Milei has adopted several of Trump’s worst habits, such as insulting politicians and journalists, including many who support his policies but occasionally voice a divergent view. He also routinely lashes out against independent media that fail to praise him constantly.

But so far, Milei is fixing the economy while respecting democratic norms. That’s why the overall balance of his first year in office is positive. If he remains within the democratic camp, he could become a great president.