Javier Milei, the self-proclaimed “anarcho-capitalist” who admires Donald Trump and promises to take a chainsaw to Argentina’s bloated state, won the presidency Sunday in Latin America’s third-largest economy.
His landslide victory over centrist Peronist Sergio Massa caps a meteoric rise fueled by the rage of Argentines against decades of economic mismanagement. For voters battered by inflation heading upwards of 100 per cent, Milei represented a hope for radical change, whatever the risks.
Just over a year ago Milei was a marginal figure in Congress, representing the tiny Libertarian party he founded in 2018. Yet, the former television pundit successfully tapped into the pulse of an angry anti-establishment mood gripping Argentines across the political spectrum, tired of the country's economic woes.
Persistently high inflation coupled with poverty rates nearing 50 per cent have decimated earnings and savings. Milei convinced voters he was the wrecking-ball operator who could smash through a sclerotic political system that has long coddled cronyism and corruption.
At his swearing-in on December 10, Milei becomes the first president from outside Argentina’s two dominant political camps since the return of democracy in 1983.
The election result thus heralds a new era in the country’s politics. Yet governing may prove far trickier than campaigning for the brash Milei. With no track record in office, he faces doubts over his ability to deliver on ambitious pledges. The policy novice must somehow stabilize an economy besieged by multiple crises, while placating hardliners in his coalition who are demanding more radical reforms.
Early tests loom in calming turbulent financial markets and halting the collapse of the peso currency, and broader questions remain over Milei’s commitment to democracy amid an autocratic streak.
Critics fear the populist strongman could erode institutional checks and balances, much like regional counterparts such as Brazil’s Jair Bolsonaro did while in office. Still, after decades of misrule under alternating Peronist and conservative governments, most Argentines felt they had nothing left to lose. Milei convinced them he could hardly do worse.
Regional impact
Regionally, Milei promises a more combative stance, especially against leftist regimes he deems anti-liberty. Venezuela and Nicaragua will likely face renewed criticism and sanctions. But picking fights with moderate leaders could isolate Argentina diplomatically.
His election promises to reshape Argentina's relations with key neighboring countries, especially with its larger neighbour Brazil and the Lula administration that has enjoyed a close and friendly personal relationship with outgoing president Alberto Fernandez. As a right-wing populist, Milei marks a shift from the Peronist government. This ideological pivot will create new tensions and partnerships in the region as Milei has expressed no interest in following the close relationship with Brazil's Lula administration.
There is a blueprint on how the two countries could work together, however. When Brazil was governed by the far-right Bolsonaro, there was little interaction with Fernandez, but the two countries managed to work at the institutional level.
While Lula wished luck to Milei, his government reacted with surprise and disappointment at his victory, vowing not to respond to name-calling, criticism, and taunts like those the elected Argentinan president lobbed during the campaign. "Democracy is the voice of the people and must be respected," said Lula.
"Hope comes back to shine in Latin America," said Bolsonaro from the other side of the spectrum, expressing his hope that “this wave of change will spread to the United States and Brazil, fostering honesty, progress and freedom."
At the people level, there are also many who are celebrating Milei's election as a counterbalance to what they see as the region's left turn and closer ties to China. Groups that supported Bolsonaro in Brazil erupted with praise and memes, praising his victory and anticipating a meeting between the two rightist leaders.
In Bolivia, Chile, and Uruguay, there is a common thread in online comments happy to see a potential reversal of the region's political bent. Most significantly, for them, Milei's envisioned deeper ties with the United States.
"Finally, an end to the thievery and corruption of the left," said a comment shared multiple times on a non-political Bolivian group. "Goodbye to China" expressed a resentment common in the region about growing Chinese incursions and influence.
"Argentina begins a new era... good luck to our neighboring country and may they do very well," said Chilean businessman Andrónico Luksic on social media. "Argentines chose change in freedom. Through democratic means they said enough to corruption, inflation and abuses," said opposition politician Jorge Guzmán in Santiago.
There could be, nevertheless, a strategic alliance with the Boric government in opposing leftist authoritarianism in the region, and in countering growing Chinese inroads by presenting a distinct liberal democratic vision. From opposite ends, together Argentina and Chile could reframe debates on the Latin American right and force older strongmen to adapt. On this front at least, Milei and Boric have the potential to form a complementary new force in South America's changing landscape.
Uruguay's moderating presence
An important angle to the region’s shifting dynamics is Uruguay—Latin America's liberal democratic torchbearer, ruled by centrist President Luis Lacalle Pou.
Sandwiched between the two giants, Uruguay has the history, potential, and opportunity to become a stabilizing conduit, offering a reasonable middle, said Uruguayan ambassador to Brazil Guillermo Valles in remarks to THE WEEK at the confirmation of the Milei victory, expressing hope and caution at once. Uruguay is a Western country with Western principles and values that we share in the region, said Valles, offering a sobering centre on a region drunk with seeking new alliances in the East.
Uruguay remains wary of Milei’s disruptive populism that could have spillover effects across the River Plate. There are danger points in pandering to extremists or undermining democratic norms. But despite their differences, Uruguay can have an important role to play in socializing Argentina's high-risk president, according to Valles.
Implications for BRICS
Anyway you look at the Milei victory, it is a shakeup in South America’s regional order that could also impact multilateral bodies like BRICS.
Argentina's induction into BRICS gained traction under the outgoing Fernandez. But Milei views BRICS membership with greater skepticism. His dollarization of Argentina clashes with the BRICS Bank aim to de-dollarize the global economy. A weaker dollar is not in the interest of Milei's Argentina; his win may dampen Argentine enthusiasm for BRICS at a time the bloc itself is divided.
Russia and China are likely to find Milei a far less amenable partner as they try countering Western influence. Milei opposed Argentina's neutral stance on Russia's Ukraine invasion under Fernandez; if he does go through with joining the bloc in January, he may align Argentina more explicitly with US positions, criticizing Russia and China within BRICS.
Either way, his victory will mark a reorientation of Argentina's trajectory since 2019, away from BRICS, and strengthen the bloc’s internal fractures. Milei shares Bolsonaro’s hostility towards China and desire for closer US ties. This could serve to dilute BRICS role as a counterweight to Western dominance. Argentina under Milei is set to be a less enthusiastic actor within BRICS councils.
Milei's unilateralist instincts suggest he will not go out of his way to strengthen BRICS coherence. Nor is he likely to deepen Argentina's activity within BRICS institutions for development financing and technological cooperation. Argentina could drift towards a passive role inside a bloc increasingly divided on core geopolitical goals.
The election result is at its minimum a shakeup in established power structures across Latin America. It accelerates the rise of new conservative forces jostling against traditional leftist regimes. After decades of 'Team A' versus 'Team B' dominance, the region enters a fluid new era with uncertain directions. Milei’s presidency sits at the eye of that storm.
This puts Milei out of step with South America's prevailing political winds. Ongoing crises in Venezuela, Peru and Bolivia also constrain room for regional cooperation. Managing tensions with ideological rivals will test Milei's statecraft. However, his forceful anti-authoritarian stance may forge links with leaders like Chile’s Boric despite policy differences.
Milei's biggest diplomatic impact could come in resetting Argentina's stance towards China. He promises a more combative approach in pushing back against Chinese influence. This would represent a major shift from cooperation under previous Peronist governments. A tough anti-China posture may please Washington but risk severe economic blowback.
The Milei storm
Milei takes charge after a stunning political rise. Just last year, few Argentines took seriously his ambitions to win the Casa Rosada presidential palace. Some saw his Libertarian party as merely a protest vehicle for free-market ideas shunned by the political mainstream. As a TV commentator, Milei railed against statist economics and blasted the ruling “political caste” in regular television appearances. Yet support barely scraped past 2 per cent nationally.
The pundit’s prospects changed dramatically during the pandemic. Extended lockdowns crushed livelihoods and savings of ordinary Argentines. Meanwhile, inflation soared, magnifying outrage at economic mismanagement under President Alberto Fernandez’s leftist Peronist government.
Milei lambasted currency controls, spiraling public debt and money printing under Fernandez as ruinous populist policies. His fiery anti-establishment rhetoric resonated with voters demanding radical solutions to deep-seated economic woes.
From a fringe figure, Milei shot to prominence on the national stage in the blink of an eye. He pulled off a major upset in last year’s mid-term elections, winning a seat in Congress in the populous Buenos Aires district.
That marked the best-ever showing for his Libertarian party. It also established Milei as a major new force on the right-wing of Argentine politics. He formed alliances with conservative civic groups. High-profile endorsements followed from former president Mauricio Macri and influential former security minister Patricia Bullrich.
He positioned himself as an insurgent force vowing to upend a broken model run by a discredited old guard in both main political camps. He called for slashing taxes, dismantling bureaucracy and opening markets.
By the time Argentina headed towards this year’s presidential elections, Milei had gate-crashed a traditionally two-horse race. For the first time since democracy returned, both dominant Peronist and conservative 'Together for Change' camps faced a frontal challenge. Milei consolidated his position as a magnet for protest votes, channeling frustration with lack of progress under various administrations. “I’m just clearing the way for Milei” became a common refrain among his supporters.
Polls showed his bombastic style and uncompromising liberal credo appealing to young voters especially. Despite strong efforts to organise a youth opposition to his election, in the final vote, they gravitated to his raw talk and pledge of wholesale change.
Populist playbook
Milei built support by faithfully following the populist playbook. He tapped into legitimate public grievances regarding corruption, lack of opportunities and declining living standards. Like Trump and Bolsonaro, he gave voice to those feeling abandoned by self-interested politicians who long-ignored their plight and offered simplistic solutions to complex policy problems, while training his fire on privileged elites, despite being one of them himself.
Like his American and Brazilian doppelgangers, Milei also freely dispensed bogus information to whip up his base. He gave credence to debunked claims about election fraud and Covid-19 conspiracies popular on social media. He derided climate change as a hoax, while disputing facts around the brutal military dictatorship that is estimated to have killed or disappeared from 6,000 to 30,000 people.
Echoing Trump’s rhetoric about “draining the swamp”, he vowed to demolish existing structures of power monopolized by leftist ideologues.
Adept use of media propelled his rise. He built a huge social media following numbering in the millions, amplifying his anti-establishment message. He generated headlines with attention-grabbing stunts and harsh diatribes against rivals. Milei’s celeb status as the “people’s president-in-waiting" attracted many star-struck followers. As the campaign came to a close, committed devotees in the “Milei Army” proved formidable campaign foot-soldiers.
Like other populists, Milei’s worldview envisions politics as an existential battle between “the people” whose interests he alone represents, and malign elites selling out the nation. Critics point out the paradox of a wealthy economist, educated at elite institutions, casting himself as an outsider crusading for ordinary Argentines. They accuse him of pursuing high office merely as a vehicle for his own ambition and vanity.
His policy pledges also faced heavy scrutiny during the campaign. Rivals sought to expose his proposals – like eliminating the central bank and adopting the US dollar – as unworkable fantasies.
For the final round of the election, Milei moderated his language as voting day neared, toning down promises of mass privatisations. But he retained a radical reformist agenda at odds with mainstream economics. Critics warned his untested prescriptions risked financial turbulence.
Voters overlooked those concerns.
Road to power
Milei’s path to the presidency began with a primary that exceeded expectations. Most local analysts predicted Milei’s outsider candidacy would ultimately flounder. They expected mainstream voters would rally behind Massa to stop a high-risk populist assuming power; a strong anti-Milei youth organisation hoped to stop his prospects. But at the polls on Sunday, Milei proved immune to warnings that he represented a threat to democracy and stability after going on the offensive against Massa as an enabler of disastrous policies that crashed the economy. He accused his rival of engineering oppressive currency controls, runaway inflation and surging joblessness, a charge that resonated as Massa is the man currently in charge of the country’s disastrous economy.
Promising to end deficit spending and statist meddling, Milei made the tired line “this time will be different” sound credible to Argentines yet again.
The landslide victory followed, with Milei securing 56 per cent of the popular vote. Jubilant supporters celebrated in the streets with huge dollar bills wearing Milei’s image as results confirmed his win.
At his victory speech, Milei pledged his presidency marked the beginning of a new era of freedom, prosperity and social mobility for Argentines. He declared the public had given him a mandate to implement tough reforms.
Shaky handover
Massa’s concession speech, however, hinted at troubles ahead. He warned of potential volatility during the transition to the new government. While committing to an orderly handover, Massa pointedly stated some policy differences with Milei were fundamental. He said his side would defend democracy and social inclusion. There were barely veiled warnings that Milei should not overreach once in office. Milei talked up prospects for an “orderly transition” to reset policies.
“We will be firm but responsible agents of the changes Argentina needs,” Milei said after his win.
Giant obstacles exist to Milei enacting his promised “revolution” in office. He lacks broad-based political support and faces huge pressure from hardliners to stay ideologically pure. Any perceived moderation risks losing his base among true believers like the “Milei Army”. His Freedom Advances party elected 35 deputies and eight senators.
Economic emergency
The dire state of Argentina’s economy means Milei has no luxury of slowly adjusting to office. He must make big calls immediately to address crises on multiple fronts; his plans to confront the emergency will set the tone for his whole presidency.
Top priority is gaining control over inflation heading towards triple digits, he understands that price stability is crucial to restore basic social order. Ordinary Argentines today struggle to afford basic groceries and medicines. Milei’s diagnosis blames uncontrolled money printing to finance bloated budgets. He says the solution is simply to turn off state stimulus taps.
The new president aims to eliminate the primary fiscal deficit by slashing wasteful expenditures and capping social transfers. Reducing the government’s need for central bank funding would slow the circulation of pesos. Milei also wants pro-business reforms to boost trade and investment. Combined with fiscal discipline, he has promised this will curb inflationary pressures.
The severity of spending cuts risks triggering economic and social turmoil, however. Much wasteful public spending represents political pork that will stir opposition. Milei also faces skepticism from economists arguing fiscal austerity alone cannot defeat entrenched price instability. A successful stabilization plan requires complex trade-offs he has yet to publicly acknowledge.
An area of greater consensus is unifying the disjointed foreign exchange policy contributing to the turmoil. Currently, the official rate is artificially pegged at a 65 per cent discount to black market prices for dollars. Eliminating this gap by freeing up currency markets could remove distortions fueling inflation.
Milei aims to eventually replace the volatile peso altogether with the US dollar. But most experts rule out full dollarization any time soon, given Argentina’s lack of foreign reserves. A more feasible initial step is removing barriers to access hard currency. Creating a transparent foreign exchange market may suffice to steady shaky confidence and there are perils beyond the immediate obstacles.
ALSO READ: Dollarisation in Argentina: Allure, risks, and unintended consequences
Persuading the IMF
Milei’s biggest external test comes in renegotiating Argentina’s agreement with the International Monetary Fund. The previous government brokered a $44 billion credit facility as a lifeline amid debt woes. However, the IMF has suspended disbursements due to Argentina repeatedly breaching fiscal and monetary commitments. Restoring that financing is vital to boost thin foreign reserves.
The IMF has publicly stated that after the election it wants “constructive dialogue” on getting the programme back on track. Yet privately, officials are wary of Milei’s professed hostility towards multilateral agencies. Gaining the IMF’s confidence will require Milei displaying pragmatism and predictability. His challenge is to convince IMF technocrats he will honor debt obligations and allow currency adjustments.
Adopting orthodox policies like public spending restraint and lower subsidies makes agreement feasible. But this risks alienating Milei’s base through more belt-tightening. It may also involve shelving ambitious reforms until bringing stability. Here Milei faces his first dilemma between pragmatism and ideology. The outcome will be an early indicator on whether he can adjust to the realities of governing.
High-stakes gambles
Beyond immediate firewalls, Milei is expected to double down on historic reform pledges that were the hallmark of his campaign. Two radical policies stand above others in shaping expectations of his presidency. Both represent huge unilateral bets.
The first is his vow to definitively crush inflation by adopting the US dollar as legal tender. Milei seeks full dollarization akin to Ecuador or El Salvador. This would eliminate fluctuations in the peso exchange rate that drive price volatility. Milei believes currency stability is impossible under the central bank’s discretionary policies. He wants to abolish the institution entirely.
Economists see huge challenges in implementing dollarization. This ambitious attempt at monetary reform has repeatedly failed in other developing countries. Milei would face resistance from exporters, debtors, and unions as the peso’s value disappears. Weak public finances also constrain building sufficient dollar reserves to back the new currency.
Success rests on demonstrating clear benefits over the status quo; otherwise, dollarization could spark financial dislocation and capital flight. Milei wants to present dollarization as a historic nation-building mission. Despite having won the election on a dollarization platform, he will need extraordinary political capital and public trust to persuade citizens to surrender this symbol of sovereignty.
The president-elect’s other marquis reform pledge is taking an ax to Argentina’s bloated state bureaucracy. Milei vows to slash taxes, privatise public enterprises and dismantle regulations inhibiting businesses. He advocates a minimal state restricted to core functions like law enforcement. As president, he now has a platform to test long-held libertarian convictions on shrinking government.
He proposes initial measures like removing obstacles to firing public employees and lifting curbs on dismissals in the private sector. Radical legislation is planned to reduce union powers and scale back social protections. Milei also wants to introduce a flat income tax of 15 per cent and voucher-based public services. Amid resistance, he may resort to governing through executive decrees.
Critics argue Milei’s slash-and-burn approach could decimate Argentina’s weak welfare architecture overnight. But his retort is the current model has created millions of dependents trapped in poverty. Milei claims only dismantling bloated bureaucracy and corrupt crony networks can spark national renewal. The gamble is high, but so too are potential economic rewards if Milei’s reforms succeed.
Democratic risks
Alongside its potential benefits, Milei’s rise also poses less benign risks to Argentine democracy and regional stability. Critics fear his authoritarian reflexes, conspiracy-minded worldview and intolerance of dissent could fuel democratic backsliding. The precedent of regional populists as in Brazil under Bolsonaro and even Venezuela under Chavez tempers optimism about his presidency.
Much depends on whether Milei feels constrained by institutional checks like the opposition-led Congress or judiciary. He may be tempted to follow the playbook of Bolsonaro, Trump, or other populists in eroding norms and tightening his grip. Early moves to expand presidential powers or neuter the media would raise alarms about democratic erosion.
Roadmap for radical reform
Milei has outlined a bold roadmap focused on economic liberalisation, state retrenchment and cultural revival.
Controlling inflation is his most urgent target. With consumer prices rising over 100 per cent annually, ordinary Argentines are struggling. Milei's plan to eliminate the fiscal deficit by freezing public sector wages and pensions may provoke opposition. But he insists fiscal discipline is essential to stop financing deficits through money creation.
Experts say dollarization is not immediately viable given Argentina's lack of reserves. An interim step may be removing capital controls and currency restrictions.
He has pledged sweeping deregulation to spur investment and growth, advocating abolishing bureaucratic red tape, trade barriers and market interventions. Milei envisages minimal state interference beyond law enforcement and defense. Privatising loss-making state enterprises will advance this small-government vision.
Tax reform is another key plank. He says lower taxes paired with drastic spending cuts will incentivise entrepreneurship and unlock Argentina's economic potential.
Curbing union powers and protections constitutes a major political .The new president wants to make hiring and firing easier by removing constraints on employers. He will face fierce resistance from organised labor and social movements. But Milei argues flexible labor laws are vital for job creation and competition.
Socially, Milei combines religious conservatism with a libertarian emphasis on individual freedoms. He promises referendums to ban abortion and legalize firearms possession. Milei rails against 'Cultural Marxism' and woke ideology in education. However, stripping public funding from universities and arts risks damaging Argentina's intellectual capital as it has in the US.
Foreign policy will also reflect Milei's right-wing nationalism. He promises closer ties with the US and Israel, while confronting leftist regimes in Venezuela, Cuba and Nicaragua. His stance on China will have to consider the risks of severe trade impacts given China's preeminence as a commercial partner.
Governing obstacles
Despite his bold agenda, Milei faces formidable obstacles to remaking Argentina along libertarian lines. Passing radical reforms will require cooperation from moderate factions on the right, but many view Milei as an extremist. They are wary of a wholesale dismantling of Argentina's welfare state and institutional framework.
Milei may resort to governing through executive decrees and emergency powers rather than diluted legislation as Trump did extensively in the US. But moving ahead unilaterally on major reforms could spark widespread resistance. It may also undermine investor confidence and creditworthiness if change appears chaotic.
In Argentina, the judiciary provides a further institutional check on potential overreach. The Supreme Court has shown its willingness to reverse major executive decisions. Now, Milei could preempt this by expanding the court's size and appointing friendly judges. But that risks damaging democracy by undermining judicial independence.
The reaction of citizens themselves poses Milei's ultimate constraint. Argentines have overthrown unpopular governments before through mass protest. A society already fractured along ideological lines may unite against reforms inflicting too much short-term pain. Milei must carefully balance pragmatism versus ideological zeal to avoid alienating his support base.
His proposed shock therapy may succeed in reviving Argentina's moribund economy, but impatient attempts to rapidly transform society could also have catastrophic results. In the minds and hopes of Argentinians, the coming months will determine whether Milei is a savior or demagogue.
Milei cannot entirely ignore the consequences of overreach or incompetence that would shatter his standing. Democratic institutions have proven resilient against consecutive Peronist and conservative governments. The hope is they can endure a populist president with autocratic leanings.
In the immediate aftermath of the elections, optimism outweighs fear over Milei’s historic presidency, for now. Argentines feels it is worth gambling on a high-risk populist to jolt a broken model. But buyer’s remorse could set in fast if he fails to deliver. His presidency will go one of two ways: either a foundational reset of the Argentine economy, or an experiment that ends in turmoil, disillusion and regret for the nation.
The direction for Latin America’s newest radical leader depends almost entirely on his political wisdom. After decades of misrule and false dawns, Argentines hope against hope Milei finally gets it right.