Persistent and growing doubts regarding Javier Milei’s capacity to deal with Argentina’s major problems were growing over the past few months. The final arrival of a substantial deal with the International Monetary Fund has allowed the Milei administration to spin the situation in a way in which they regain momentum, but society has already indicated it is not a big fan of consistent amateurism.
It was a new state of affairs for the novel anarcho-capitalist libertarian economist, who appeared politically untouchable, despite a draconian reduction in spending and a painful recession used to try and tame inflation. The marked fall in inflation, together with a sense of increased purchasing power, had sustained the government’s political capital, overcoming the painful aspects of his economic plan – such as the aggressive contraction in key sectors including industrial manufacturing, construction, consumer staples, and stationery. Ahead of the IMF deal, jittery markets and institutional violence used to repress street protests had hit at the President’s standing in opinion polls as the electoral campaign begins to heat up.
The President’s ironclad hegemony had become a pathetic circus of blunders until the IMF deal, threatening to prove campaign predictions of amateurism and incapacity to govern true, just as the campaign for the midterm elections gets under way. By no means should Milei’s La Libertad Avanza coalition be seen to be on the losing sid, particularly given the state of the opposition, with Mauricio Macri watching his anti-Kirchnerite coalition dissolve, while Cristina Fernández de Kirchner was forced into a painful truce with her former prodigal son, Axel Kicillof.
There’s no one specific moment in which hegemony had turned into circus. Milei’s ascendancy has always been caricature-esque, surrounded by bizarre characters, juxtaposing Austrian economic theory, anti-caste sentiment and some of the worst figures that the traditional political system has to offer. In great part, that was his appeal: as star political advisor Santiago Caputo is said to have told the business elite, the fact that things fall apart and fail to work efficiently is evidence that they are succeeding in destroying the state from within.
Yet, quickly enough Milei and Caputo — a freelancer with no formal appointment and who sees himself as the political commissar and ideological constructor of the mileist creed — got a taste for the elixirs of power. Milei, the outsider, the grey man, got invited to myriad overseas events, where he was recognized and lauded for having defeated leftist populism at the ballot box. He began to consider himself the greatest exponent of the ideas of freedom at a global level, alongside US President Donald Trump. He lectured the Davos elite on the perils of socialism and received the royal treatment in Giorgia Meloni’s Italy. In tandem, Caputo and Presidential-Chief-of-Staff Karina Milei built the power structures that would execute the President’s political vision. Caputo gained control of key dependencies, including the SIDE spy/intelligence agency, the newly renamed ARCA tax office and the Justice Ministry through its deputy, Sebastián Amerio, among others. They turned their back on the legislative branch, governing by emergency decree, while keeping the Judiciary at arm’s length. They played Macri, using his deputies and senators while rejecting any direct interference or role in the Cabinet. They antagonized themselves against Cristina, feeding on the anti-Kirchnerite sentiment that has fed our very own brand of polarization, a bit out of the everyday parlance today, known as “la grieta.”
Things could backfire. Market jitters pushed the government into a defensive posture, with Economy Minister Luis ‘Toto’ Caputo finally inking the deal with the IMF after appearing to have involuntarily fanned the flames of devaluation. Global markets are in disarray given the re-emergence of Trump and his attempt to restructure the world order through tariffs and real-estate-like negotiations with Vladimir Putin to end the war in Eastern Europe, among other such behaviors. Argentina had managed to dodge the bullet, given its certain isolation from global trends, in great part due to strict currency controls that limit the flow of capital and strict intervention in foreign exchange markets to keep the peso-dollar exchange rate under control. These were eased substantially as part of the IMF deal, forcing a major concession on behalf of the Milei administration, but also as a consequence of ultimately becoming inefficient: the Central Bank was forced to burn through some $3-billion in international reserves in a month or so before announcing the IMF deal. There should be little doubts that this situation precipitated the final agreement.
While things feel under control since the IMF bailout, the previous weeks and months were chaotic, evidencing the government’s amateurism and eroding the public’s confidence in Milei—he still remains one of the highest rated politicians in the country. Yet, the $Libra crypto-scandal and its aftermath sparked fears of corruption, particularly aimed at his Sister, presidential Chief of Staff Karina Milei. The level of violence used to repress street protesters put the focus on Security Minister Patricia Bullrich and her tactics. The use of an emergency decree to try and select Supreme Court Justices was ultimately revoked by Congress. And the consistent sucking up to Donald Trump, together with the unconditional friendship with billionaire Elon Musk, hasn’t sparred Argentina of being caught in the global trade war sparked by the US President. The electorate, recently willing to tolerate anything from Milei as long as inflation continued its downward descent, will now be tested as prices will rise faster for expected for a few months.
This pathetic circus is the context in which Argentina’s political system is operating. To Milei’s advantage, Macri’s coalition – and even the former president’s party – is cannibalizinng itself, with Bullrich apparently coopting Ritondo and Santilli to join the ranks of the libertarians and former Buenos Aires City mayor Horacio Rodríguez Larreta splintering off. Across the aisle, Cristina tried to exert control over the main Peronist party, which she dexterously achieved in Congress but failed to do so beyond its halls: Buenos Aires Province. Governor Axel Kicillof ultimately fended off an attack by the former president and her son, deputy Máximo Kirchner, head of La Cámpora political organization and a sworn enemy. They are all in disarray, which should favor the amateurs in the Casa Rosada.
This piece was originally published in the Buenos Aires Times, Argentina’s only English-language newspaper.
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