A year of Javier Milei

Between freedom and responsibility

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Today we publish our second geopolitical analysis article at LWS Financial Research, featuring Aleix Amorós. We examine Javier Milei's first year leading Argentina and the future outlook ahead of the 2025 elections.

Summary

• On October 22, 2023, nearly thirty-six million Argentinians were called to the polls to exercise their right to vote in both presidential and legislative elections. At stake was not only the appointment of the head of state for the next four years but also the renewal of 130 deputies and 24 senators.

• Sergio Massa, who served as Minister of Economy under President Alberto Fernández (2019–2023), won the first round of the elections at the helm of Unión por la Patria, followed by Javier Milei of La Libertad Avanza and Patricia Bullrich of Juntos por el Cambio. Together, the three candidates captured 90.58% of the valid votes.

• Since none of them achieved 45% of the ballots or 40% with a lead of at least ten points over the runner-up, a runoff was called between the two candidates with the most support.

• On November 19, 2023, Javier Milei became the new president of Argentina after defeating Sergio Massa in twenty out of the country's twenty-four districts, with a margin of more than eleven points. Benefiting from the orphaned votes of Patricia Bullrich, who did not make it to the runoff, Milei garnered over fourteen million votes, making him the most-voted presidential candidate in Argentine history.

• Paradoxically, however, his political party secured only 38 seats in the Chamber of Deputies and seven in the Senate, far from enough to legislate comfortably, leaving him dependent on alliances and agreements with other political forces.

• A year after this historic victory, we analyze his tenure in the Casa Rosada, characterized by financial orthodoxy and the fight against hyperinflation. Loved and hated in equal measure by a deeply polarized population, Milei is holding his ground as he prepares to stake his political legacy in the critical midterm elections on October 26, 2025, which will see the renewal of half of the Chamber of Deputies and one-third of the Senate.

Navigating uncertainty

Governance is never an easy task. Exercising it with a clear parliamentary minority in both chambers of Congress—the legislative body—and without controlling a single provincial governorship in the country is nothing short of a daunting challenge. Adding to this, if one faces an irreconcilable binary division between two societal factions, known over the years as la grieta (the rift), fueled by high doses of mutual intolerance and exacerbated fanaticism, the challenge becomes herculean.

This was the reality Javier Milei encountered upon taking office as President of Argentina on December 10, 2023. An economist by training, he gained significant notoriety on television talk shows for his eccentric demeanor as a panelist, captivating audiences with a narrative against the unchecked state spending that had dominated the country for years. Milei arrived at the Casa Rosada with almost no political experience, having served only two years as a deputy after winning a seat in the 2021 midterm elections. At that time, he secured five seats through an alliance with other parties that brought together social conservatives and economic liberals. However, internal disagreements eventually fractured the coalition, reducing his bloc to just three members, including conservative lawyer Victoria Villarruel, who would go on to become his right-hand as Vice President of the country.

The situation in December 2023 was not much more promising. Although Javier Milei achieved an undeniable victory at the polls, defeating Peronist Sergio Massa in the runoff by eleven points across twenty of the country's twenty-four districts and becoming the most-voted president-elect in history—with over fourteen and a half million votes—his political group, La Libertad Avanza, struggled to penetrate the deeper layers of Argentine society. As a result, they failed to secure any of the twenty-one provincial governorships up for grabs, nor the leadership of the Autonomous City of Buenos Aires.

Similarly, their presence in Congress was minimal. In the Senate—the upper house—they secured only seven of the twenty-four seats at stake, out of a total of seventy-two. By August 2024, they expelled Francisco Paoltroni from the group, reducing their representation to six seats, barely 8% of the total.

With such numbers, Milei has been forced to seek broad parliamentary consensus to secure majorities and legislate effectively, especially given the Peronist bloc represented by the thirty-three senators of Unión por la Patria, the main opposition force in the chamber.

In the Chamber of Deputies—the lower house—they secured thirty-five of the 130 seats contested, out of a total of 257. Adding to the three seats they already held, this brought their representation to thirty-eight. In March 2024, José Luis Espert, previously a deputy from Juntos por el Cambio, joined La Libertad Avanza, becoming its thirty-ninth member. Even so, they barely control 15% of the chamber.

This weakness in Congress became evident during the nearly six months of negotiations surrounding the approval of Omnibus Law 27,742, officially named the Law of Foundations and Starting Points for the Freedom of Argentines. Initially drafted with 664 articles plus annexes, it was finally ratified by both chambers on June 12, 2024, after an intense pruning process. This forced the executive branch to withdraw numerous proposals, reducing the law to 238 articles, barely a third of its original design.

Regardless, the Foundations Law has been the cornerstone of Javier Milei's first year in office, shaping the action plan he brought to the Casa Rosada, focused on two key issues. On one hand, security—tackling the growing violence in large areas of the country like Rosario, reclaiming streets and highways from the coordinated actions of unions such as the General Confederation of Labor (CGT), which had paralyzed the nation for years with blockades. On the other hand, the economy—with the mission of flattening the inflation curve by ending monetary issuance, implementing a large-scale fiscal adjustment on the state, dismantling it, and liberalizing numerous services for the private sector.

While the ultimate goal—restoring social order in the country and stabilizing public finances—may justify the means, such a shock therapy inevitably plunges the nation into a painful journey through the desert, often requiring situations to worsen further before they can be corrected and stabilized. The resilience of the population will be tested, as will the political credibility of the administration, which will need to perform a delicate balancing act to secure parliamentary support for unpopular but necessary measures for the nation's present and future.

In Milei’s vision, shared by other liberals, lies the aspiration to reclaim the greatness of an Argentina that, from the late 19th century to well into the 20th, was one of the richest countries in the world. During that time, its GDP per capita was comparable to global powers like the United States or the United Kingdom, and its capital was often referred to as the Paris of South America—a testament to the ambitions of the elites of that era to project a modern, vibrant, and cosmopolitan city.

Security is not expensive, it is invaluable

The idiosyncrasy of the Argentine Nation since embracing democracy over forty years ago has historically been tied to protest, explicitly enshrined in Article 14 of the Constitution, which recognizes both the right to petition and freedom of expression. This behavior reflects the state of permanent crisis experienced by a significant portion of the population, unable to achieve social and economic stability. Over the years, this segment of society has been repeatedly marginalized by the erratic policies implemented by successive governments.