Marcelo Duclos is an Argentine economist, political scientist, and journalist. He is also co-author, with Nicolás Márquez, of the best-selling book Milei, la revolución que no vieron venir (Milei, the revolution they didn’t see coming), published by Hojas del Sur. In our interview, Duclos analyses the Argentine government’s current situation and its immediate future.
What are the most important aspects of Javier Milei’s management in this first stage of government?
There are several to bear in mind. I would say that the most important thing is something that at first glance nobody notices and yet is key for the economy: the fall in the so-called “country risk” index. That is, the decrease in the indicator that measures the probability that a nation will default on its financial obligations, such as the payment of its external debt. This also means that the economic measures begin the capitalisation of the Argentine economy. However, the average worker does not yet perceive this. The important thing is that this macroeconomic consolidation will inevitably put an end to the fiscal deficit at the national level, with an historic adjustment in unnecessary spending and without resorting to printing banknotes to end the deficit and inflation. This represents another momentous change whose central objective is the promotion of economic development and the strengthening of the competitiveness of various economic sectors. In other words, in the macroeconomy, there is a fundamental correction of issues that today seem intangible, but that will be reflected in the daily lives of Argentines in a very short time.
Is there something that the citizens can perceive today in concrete terms?
Of course, inflation control. We have to take into account the government’s very important monetary correction that put an end to the state’s sources of financing through monetary issuance. We must remember that we had a president, Alberto Fernández, who said that inflation was caused by “demons.” The question of uncontrolled price increases is key, and I can say that, in Argentina, the problem of inflation is now history. Logically, the question of updating tariffs and services has meant that people have had to realise that things are worth what they are worth, and that has its consequences.
Now, when almost every day goes by with purchases not increasing in price, the moment of truth has arrived and, finally, reality ends up imposing itself. Another example is the overnight solution of the rent crisis, with the repeal of the law that fixed the market price—paradoxically, the opposite of what Sánchez and the communists did in Spain! This is also tangible for Argentines.
Argentina has suffered a lot of frustration due to historical political failures.
We have experienced many disenchantments and many promises of failed ‘paradises on earth.’ When, in the past, there was a standard of living where people could go on holiday, buy what they needed in the supermarket, or go out to eat in a restaurant, and they have voted time and again for light political decisions that have failed, they finally reach a point where reality becomes evident. Javier Milei’s programme and discourse at another time in Argentina would not have stood a chance, but today they do.
In the election campaign, Milei announced his programme and said both that its implementation would not be easy and that the results would not be immediate. Nevertheless, he won an unquestionable majority to win the presidency.
Indeed! The last part of Sergio Massa’s campaign was financed with banknotes, issuing currency and bonds that he promised to pay back after the elections. We had maturities with 24 hours to go when Javier Milei arrived at the Casa Rosada! Fortunately, with the first measures taken regarding the exchange rate, there were good signs that inspired confidence. The free dollar was maintained when the official one went from 400 to 800 pesos. Issuance was stopped completely, and all sources of spurious financing with the issuance of pesos were ended. Today, they are not manipulating the free exchange rate as they have done before.
Javier Milei, as a libertarian liberal, as an ‘Austrian’ economist, knows that he cannot leave the government without taking away the Central Bank’s monetary monopoly and that, if this continues—as the minister of economy, Caputo, said—the peso will finally become a strong currency when investments come in, dollars come in, and the supply of pesos remains fixed. After Milei leaves the government and Argentina has zero inflation, as happened in the government of Carlos Menen, the opposition will repeal a ‘convertibility’ law with another law, and everything will go back to the way it was before. Milei is aware that he cannot allow that.
What is the main problem facing Milei’s government today?
The extreme parliamentary weakness it has, which will last until next year’s midterm elections. In the event that the government does badly, the project is finished. If, on the other hand, the project goes well, Argentina starts on the road to becoming the best country in the world. There is no middle ground. If Milei does not do well in parliament, all the things that are being done will bear fruit, but they will be reversible. This ‘revolution’ needs an eight-year process with a parliamentary majority to consolidate the transformation.
But this also implies a change in the mentality of Argentines, a cultural change in society.
Argentine society surprised us at the ballot box in the last election. An example of this is Milei’s victory in the poorest neighbourhoods, winning more than half of the votes. Milei broke all the moulds. The poor in Argentina vote for Milei not only in Buenos Aires but, above all, at the national level. Coming from outside politics, he achieved in only two years what every politician aims at for his whole life, and very few achieve it with his natural and authentic leadership. Patricia Bullrich joining the project speaks very well of her. It is totally surprising that she is cooperating with Milei and letting him lead in what for him is just a job, a tool—we can say he almost despises the position, and he does not put “president” on his social networks. Milei has not even changed his online profile picture! there is a lot of merit in Patricia Bullrich’s accompaniment of someone who, by generating an unprecedented political phenomenon, almost unwittingly became president.
What about the relationship between the media and the government?
There is overwhelmingly visceral hostility. Milei eliminated the media’s advertising budget. Under Kirchnerism there were media outlets that received more money from the state than from advertising revenue. The current government put an end to that policy, and that is why the media generates so much animosity and does not provide objective news. But it is becoming less and less important and relevant. Today, young people have practically stopped watching television. Access to information has changed in recent decades, and this is evident. Despite the media virulence against Milei and the government, they are losing relevance and influence. The more radical the media become against the government, the more discredited they become.
Despite this, there are still important protest demonstrations on the streets, such as the recent one by university students.
It should be noted that the government has started to audit all state expenditures and many scandalous misuses of funds have been discovered. Budgets have been presented and, unlike what has always been done, the powers of the state have been limited. It made no sense to vote on budgets under Kirchnerism, because the chief of staff had the formal power to reallocate items at his discretion according to convenience. Now, the budget limits spending to revenues, and in no way can the zero fiscal deficit be compromised. That is why the president says that, if the opposition wants to increase money to a particular sector, then it must say whence the resources come. Therefore, although it may seem absurd, it is truly revolutionary that the Argentine state has accepted that resources are finite. When madness is law, common sense is a revolution.
So, we can say that it is time for accountability.
That is right. For years, not a single invoice has been presented to document how the money was spent. The state universities simply made reports in spreadsheets saying “So much money was spent on this, so much money was spent on that…” and nothing else. It is unbelievable. Now, with the so-called ‘veto on universities,’ the government is saying, “Here comes the magnifying glass” on spending. During the first discussion, when it was stated that it was “in defence of public education,” there was a massive protest and demonstration. That is when the veil began to fall away. The country became aware that the universities were not accountable before a second demonstration came. The difference between them was a third of the number of demonstrators. The people who participated in good will in defence of education had disappeared, and only the political apparatus of the opposition remained.
At the international level, Argentina seems to be repositioning itself in the geopolitical place where it has historically belonged.
Javier Milei was also clear on this from the very beginning of his election campaign. But beyond the geopolitical and moral alignment with Western values, the president has a unique and impressive global recognition. Apart from the pragmatism and necessity of international relations, no one in their right mind could ever propose that Argentina be aligned with Iran and Venezuela, yet that is what we had with the previous government. Another thing is that Milei has realised that he can have, for example, a better relationship with a country like China without this implying anything else. Today we have civilised international political relations and the doors are open to investment. As in the case of Elon Musk, those who understand what it is to risk capital understand what Milei is saying. And this does not only happen with foreigners, it also happens with Argentinean entrepreneurs, of course.
In Argentina, favours are no longer sold. Milei says it very clearly: “Corruption is inherent to the state.” It is true even though, statistically, this government is going to be much less corrupt. How can there not be cases of corruption when there is a national political structure? But if the state has no favours to sell, if an official doesn’t have to sign or stamp a piece of paper to open a business, if people don’t have to ask for authorisation to export, then the margin for corruption is reduced and bureaucracy is eliminated.
How do you see the future of this project and of Argentina?
If Javier Milei is successful, the world will talk about the Argentinean miracle. People from all over the world will come back to work in Argentina and there will not be enough jobs. We will have Europeans who will want to work here instead of Argentines who want to work abroad. Argentina will be a new country that corrected its course to what it was between 1853 and 1860 under Alberdi’s Constitution. We can draw an analogy with the Argentina that went from being a fratricidal, unproductive, and bloodthirsty desert to the country with the highest GDP in the world. In any case, success is not guaranteed as many things can happen in politics. But if the government holds on and gets a good result at the polls, the best is possible for Argentina. If Milei gets a good result in the next elections, Argentina will be on its way to becoming the best country in the world.
