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Argentina's President Javier Milei gestures during the Atreju political meeting organized by the young militants of Italian right-wing party Brothers of Italy (Fratelli d'Italia) at Circo Massimo in Rome.
Big milestone for Argentina’s radical president: Economy escapes recession
A year ago, Argentina’s eccentric, wolverine-haired, “anarcho-libertarian” president Javier MIlei took office with a chainsaw and a plan: to tackle the country’s triple-digit inflation and chronic debt problems, he would hack government spending to pieces — and it seems to be working.
Latin America’s third largest economy has emerged from recession for the first time since the third quarter of 2023, with GDP growing nearly 4% since then. Month-on-month inflation has plunged from 25% last December to just 2.4% a month ago.
How’d he do it? Since coming to office, Milei has scrapped more than half of the government ministries, slashed spending on public salaries, devalued the currency, and put pension growth in a chokehold.
The subsequent return to growth is a vindication for Milei, whose state-chopping has won him plaudits from financial markets and the International Monetary Fund. It’s also earned glowing admiration from Donald Trump who envisions a similar gutting of the US Federal government (though his protectionist impulses contrast with Milei’s purer market fundamentalism).
Milei’s approach has been painful for many. The percentage of Argentines living in poverty has surged by 13 percentage points to 53% since he took office. Milei’s bet is that this is merely short term pain. He could yet be right: experts see the economy expanding by 5% next year after contracting 3% in 2024. With mid-term elections approaching in 2025, we’ll soon learn how most ordinary Argentines feel about Milei’s methodical massacres.Homes are leveled in the aftermath of Hurricane Helene in Horseshoe Beach, Florida, U.S., September 27, 2024.
Hard Numbers: Helene hits hard, Zuckerberg enters the big leagues, US strikes Islamic State in Syria, Majority of Argentines live in poverty
90: At least 90 people across the southeastern United States are dead in the wake of Hurricane Helene, which made landfall as a category 4 storm on Thursday. The high winds and storm surge destroyed an unknown number of homes and caused power outages for millions. The White House declared major disasters in Florida and North Carolina, allowing federal emergency management resources to flow to those states.
201 billion: Meta CEO Mark Zuckerberg has reportedly amassed a net worth of $201 billion, making him the fourth wealthiest person in the world after Elon Musk, Jeff Bezos, and Bernard Arnault, whose assets all surpass $200 billion. For context, if you made $10,000 an hour, every hour for the last 2,024 years, you would still fall short of the mark with $177 billion.
37: US Central Command said Sunday that it had killed 37 Islamic State-linked operatives in two separate strikes in Syria this month. The first strike, on Sept. 16, killed 28 militants at an IS training ground in central Syria, while the second killed nine IS-affiliated militants in the northwest last Tuesday.
52.9: According to new government data, more than half of Argentines – a whopping 52.9% – lived below the poverty line during the first half of the year, the highest level in two decades. That’s up from 41.7% in the last half of 2023, with a 237% annual inflation rate driving much of the increase. President Javier Milei has managed to bring inflation somewhat more under control, but he is making unlikely promises to bring the rate down to 18% by the end of 2025.Iranian President Masoud Pezeshkian stands at attention while armed military personnel from the Islamic Revolutionary Guard Corps parade during a military parade commemorating the anniversary of the Iran-Iraq War in Tehran, on Sept. 21, 2024.
Hard Numbers: Iran’s elite fighters go off the grid, Cognac takes on China, Egyptian weapons flood Somalia, Argentines empty their mattresses, “Noise shouter” wins Kiwi election
800: Some 800 protesters, many on tractors, hit the streets in the southwestern French town of Cognac this week, in a “spirited” display of anger at the possibility of Chinese tariffs on European brandy. Losing the huge Chinese market could cripple the struggling Cognac industry. Beijing and Brussels are locked in a series of trade disputes over European food products and Chinese electric vehicles. The EU on Monday filed a World Trade Organization challenge against China’s recent investigation of European dairy goods.
2: A second Egyptian shipment of heavy weapons has arrived in Somalia, in a move that could stoke simmering tensions between both countries and neighboring Ethiopia. Egypt and Ethiopia are at odds over a major Ethiopian dam across a Nile tributary, while Somalia is angry at Ethiopia’s support for separatists in the region of Somaliland. Against that backdrop, Egypt and Somalia signed a security agreement earlier this year.
8 billion: Since Argentina’s radical libertarian President Javier Milei took office last December, chainsawing his way through government spending and imposing severe austerity measures, the country’s foreign currency deposits have surged by $8 billion. The data suggest growing confidence in his ability to stabilize an economy that has bounced from crisis to crisis for decades, though the upcoming expiry of an amnesty for hidden currency is also part of the story. See our exclusive interview with Milei here.
50,000: With more than 50,000 votes counted, the results are in: The hoiho, also known as the “yellow-eyed penguin,” has won New Zealand’s bird of the year election, seeing off a dark bird challenge from the karure – an all-black species of “goth” robin. The winner, whose name means “noise shouter” in the Maori language, is thought to be the world’s rarest penguin. It is also one of its most endangered, suffering a population decline of nearly 80% over the past 15 years.
Demonstrators gesture during a march against the government of Argentina’s President Javier Milei on St. Cajetan’s Day, the patron saint of the unemployed, in Buenos Aires, Argentina August 7, 2024.
Inflation inferno: Argentine unions turn up the heat
Argentine university workers plan a 72-hour strike to demand higher wages starting on Monday, Tuesday, and Wednesday. The government is offering an increase of 3% for August and 2% for September, which the unions have deemed unacceptable. Data for the first half of 2024 shows Argentinawith the highest cumulative inflation worldwide at 80% and a peak year-on-year inflation of 271.5%.
The private sector is also feeling the heat, as unions for the country’s soybean workers demand that processing companies approve wage hikes above the country’s inflation rate. Argentina produces a third of the world’s soybean meal and exports much of it to China, which provides a crucial source of Buenos Aires’ foreign reserves. Last Tuesday, Argentine workers began a strike against their employers that shut down processing plants and caused loading delaysfor 36 ships.
These strikes are at the heart of the political debate over President Javier Milei’s promises to improve Argentina’s flailing economy — with some tough love if necessary. Labor unions have conducted two general strikes, including one in May that saw 400 flights canceled and transport lines shut down as trash collectors, teachers, and health workers walked off the job, andbanks, businesses, and state agencies closed for the day.
In an exclusive GZERO interview with Eurasia Group President Ian Bremmer last week, Milei acknowledged that “Life is going to be harder for the average Argentinian citizen” but defended his radical approach to saving Argentina’s struggling economy. We’ll be watching whether this latest round of strikes changes his tune.
Javier Milei's plan to save Argentina: Full interview
Six months into his first term in office, Javier Milei isn't afraid to be blunt about how he plans to save the country's economy. The staunchly libertarian Argentine President swept into office easily on an unconventional slogan: "There's no money." As he tells Ian Bremmer, he’s spending nearly every waking hour trying to reverse decades of misgovernance and economic mismanagement. And so far, most international experts agree: it seems to be working.
When he ran for office, the economics professor-turned-TV pundit-turned-presidential-candidate vowed to eliminate Argentina’s central bank and threatened to replace the Argentine peso with the American dollar. But once Milei came to office, a more pragmatic approach to economic reform emerged. And in just six months, his administration has managed to slow Argentina's 300% annual inflation and turn a budget deficit into a surplus. "We have actually completed the largest reform in the history of Argentina," he proudly tells Bremmer in an exclusive new interview for GZERO World, highlighting the scale of his efforts to overturn what he calls "100 years of decadence."
In this wide-ranging conversation, Milei lays out his “shock therapy” approach to reversing Argentina’s economic missteps, his democracy vs autocracy geopolitical outlook, and his thoughts on China and Israel. The coming years will tell if the fiery new president’s idiosyncrasies may just end up being some of the least noteworthy things about him.
GZERO World with Ian Bremmer, the award-winning weekly global affairs series, airs nationwide on US public television stations (check local listings).
New digital episodes of GZERO World are released every Monday on YouTube and on our website. Don’t miss an episode: subscribe to GZERO's YouTube channel and turn on notifications (🔔).
Ian Explains: What's so radical about Argentina's new president (besides his cloned dogs)?
Argentina's new libertarian president, Javier Milei, is not like other Argentine presidents. He's not like anyone else, for that matter. But it's not his penchant for dressing up as a superhero and singing about fiscal policy that sets him apart. Nor is it his cloned dogs or bombastic approach to politics. Six months into his first year in office, it's his radical plan to save Argentina's economy that's truly radical. And here's the thing...so far it seems to be working.
Despite living in one of the largest and most resource-rich nations in Latin America, the average Argentine has endured one economic calamity after another. Milei has vowed to put an end to what he refers to as "100 years of decadence. But can he pull it off?
The self-proclaimed tantric sex guru with a mop of unruly black hair that he claims the invisible hand of the free market keeps in place campaigned for president last year by promising to take a chainsaw literally to government spending and to eliminate Argentina's Central Bank. He also derided climate change as a socialist conspiracy. He called the Argentine compatriot Pope Francis a "leftist S.O.B." He's known universally in Argentina as El Loco or the madman. And then back in November, he won the election in a landslide.
When he won, many experts expected that Milei's self-styled, anarcho-capitalism would be the death knell for an economy already in free fall. But after taking office in December, Argentina's 300% annual inflation slowed for five months in a row. His government did this by turning the 5.5% budget deficit that it inherited into the country's first surplus in over a decade. And all without destabilizing their currency and their financial markets.
But while Milei's shock therapy has been successful at balancing the budget and slowing inflation, the fiscal and monetary austerity has caused a deep recession, with economic activity shrinking almost 10% year-on-year back in March, unemployment rising, real salaries in Argentina hitting their lowest points since 2003. Mass protests against budget cuts to public universities back in June drew more than 400,000 people to the streets.
Can Milei save Argentina's economy before he destroys it?
Watch Ian's exclusive interview with Javier Milei on the full episode of GZERO World with Ian Bremmer, the award-winning weekly global affairs series, airing nationwide on US public television stations (check local listings).
New digital episodes of GZERO World are released every Monday on YouTube. Don''t miss an episode: Subscribe to GZERO's YouTube channel and turn on notifications (🔔).
Baltimore Mayor Brandon Scott at a news conference on June 29, 2023.
HARD NUMBERS: Fentanyl ravages Baltimore, Argentina declines by design, Harvard denies degrees to protesters, Oz tries alleged mushroom murderer
6,000: The city of Baltimore has won a grim distinction, recording 6,000 overdose deaths over the past six years, a drug death rate “never before seen in an American city.” Experts blame a flood of the extremely powerful synthetic opioid fentanyl, which occurred right as local politicians were shifting their attention to other challenges such as gun violence and the pandemic.
8.4: Argentina’s economic activity in March fell by 8.4% compared to the same month last year, the steepest drop of its kind since 2020 and the fifth straight month of declines. This pain, of course, is partly by design, as radical reformist President Javier Milei has imposed drastic spending cuts in order to put the economy on more sustainable footing for the future. Will it work? Here’s Ian Bremmer’s take on the question.
13: Harvard University’s governing board will not award degrees to 13 graduating students who participated in pro-Palestinian protest encampments earlier this semester. The move defies a faculty recommendation to award the degrees. The board said the students could still appeal. As GZERO readers know, our own Riley Callanan just graduated from Columbia University, where she covered the protests and police crackdowns. Here’s what it was like for her.
3: An Australian woman is going on trial for murdering three elderly people by serving them poisonous mushrooms at a lunch she hosted. And the plot thickens like a cremini stew: The dead were the parents and aunt of the woman’s ex-husband … who was ALSO at the lunch (but did not die).
Two types of cicadas that resurface every 13 and 17 years, respectively, are making their rare appearance this spring.
HARD NUMBERS: Cicadas plan historic reunion, China uncorks stimulus binge, Collusion claim rocks shale, Argentina gets more IMF money, Melinda Gates walks out the door
221: Can you hear it? If you’re in the US Midwest you sure can. After 221 years, two local broods of cicadas – red-eyed, beetle-like insects that grow underground for years before emerging for a single summer of cacophonous buzzing and mating – will emerge at the same time. Brood XIII, based in Illinois, comes up every 17 years, while Brood XIX does so every 13 years. For context, the last time they were out at the same time, Illinois wasn’t even a state yet.
140 billion: As its GDP growth picks up again, the Chinese government is looking for some further stimulus, and what better way to invigorate the economic senses than $140 billion in long-dated sovereign bonds? Beijing will start selling the paper this week, putting the funds towards “modernization.” China is looking to wean itself off of an economic model that relies heavily on property investment.
10: At least 10 new class action lawsuits allege that US shale oil producers colluded to keep crude prices up, driving up gasoline prices too. The shale oil industry, which uses advanced technologies to pull petroleum hard-to-develop shale rock formations, has boomed in the past decade, catapulting the US into the global top spot in oil production.
800 million: The IMF is set to disburse another $800 million in support for Argentina after determining that new President Javier Milei’s radical austerity reforms have helped to stabilize the economy. The eccentric Milei, a self-described “anarcho-capitalist,” has slashed spending since he was elected on promises to fix a moribund economy mired in triple-digit inflation. For a deeper look at how and why Milei is succeeding, see this Quick Take by Ian Bremmer.
12.5 billion: Philanthropist Melinda Gates, formerly married to Microsoft founder Bill, is stepping down from the Bill and Melinda Gates Foundation, one of the largest donor organizations in the world. As part of her agreement, she will keep $12.5 billion to direct towards her own work supporting women, minority groups, and families. To date, the foundation has given out more than $75 billion in grants to development and healthcare projects. Melinda and Bill divorced in 2021.