What’s happening to Argentine President Javier Milei a year after his triumph?

Read Time:7 Minute, 6 Second

Argentines pinned their hopes on Milei, counting on his program to overcome the crisis. Unfortunately, the politician did not meet expectations; he showed himself a common opportunist and created risks for the country. Read more in our material.

Quarrels on the world stage

Milei became president of Argentina on December 10, 2023. At the time, the prospects of his presidency guaranteed a romantic “libertarian” revolution of consciousness and governance. But reality made adjustments, which translated into pragmatic relations with Washington and the EU, which initially represented the main hope for “freedom.”

But today, Milei has set a course to break relations with the former “metropolis” in Madrid. The odious leader from Buenos Aires caused a real scandal in Spain. He spoke at the congress of the Spanish right, where he insulted the country’s Prime Minister Pedro Sánchez and his wife, as well as demonstratively refused to meet with the authorities. Sánchez responded by recalling his ambassador from Argentina, effectively freezing diplomatic relations with the former colony. Spanish business may also be under attack, because Spain is the second investor in Argentina after China with $20 dollars in assets. Still, the act of aggression is logical, because the Spanish right-wing is still unable to oust Sánchez and gain power. So they started using their Latin American allies like Milei against him. In retaliation, Sánchez promises to complicate trade with Argentina on EU level in Brussels.

The conflict has obvious beneficiaries, among them American business, which has started to get its hands on Argentina’s assets. U.S. oil giants are planning to develop Argentine fields, and the Clinton clan is already trying to get their hands on some of them. The Chinese, who have their eye on large deposits of rare-earth metals, are not lagging behind.

Prime Minister Pedro Sánchez
*Photo by Ronald Wittek/ EPA-EFE / CNN*

The struggle for the distribution of oil and gas fields discovered near the Falklands is also beginning. Milei is already promising to return the islands, which is causing a convulsive reaction in London. The fight for Argentine values will only gain momentum, but the Europeans are not allowed to get close to it, despite the talk about the friendship of progressive democrats with each other.

“The country is for sale”

At the same time, Argentina has moved to barter trade with China, which often reaches the point of absurdity, given Milei’s ideology. For example, Buenos Aires is paying Huawei with Argentine steaks to buy 5G equipment, and the Chinese company now has to trade beef within China. Tied to circumventing U.S. sanctions against Huawei, but the dire state of Argentine finances plays no less of a role. The country has experienced 113 defaults over the past 123 years, and things are not better now amid Javier Milei’s “shock therapy”. Milei himself initially had a negative attitude towards China, but he needs investments and earlier the president borrowed another $5 billion from China. However, this is the case when you borrow to pay interest on old loans.

Argentina already owes China $18 billion and the IMF another $44 billion. In June 2025, it has to pay $3 billion in debt and another $2 billion in July. But there is nowhere to take them, so Argentina has to borrow again, and at the same time pay back China with its famous steaks. In the future, creditors will simply start buying up Argentina’s assets. American corporations have already set their eyes on shale oil and gas deposits. The Chinese want to get their hands on deposits of rare-earth metals. So we are left to give everything to foreign partners for nothing. “Salvation” for Argentina will be only a destructive revolution, which will nullify the debts, as there will be nothing to take.

Against this background, attempts to find out what Milei has done with the country’s foreign exchange reserves, have turned into a real detective story. After all, 62 tons of gold worth $4.5 billion mysteriously disappeared. After long battles with the government, the opposition learned that the Argentine gold had been loaded onto British Airways charters and shipped to London. Milei’s connections helped, as he had worked for HSBC before entering politics. And this despite the fact that Argentina is having trouble servicing its debts to the IMF and other countries.

Moreover, the world is currently experiencing a trend to accumulate physical gold. The demand for the “yellow metal” on the part of the world’s central banks is at a record high level since the post-war 1950. At the same time, many countries are actively taking their gold from foreign banks, as no one wants to find themselves in a situation when the reserves are confiscated. Argentina can easily find itself in such a situation, the gold will simply be taken away in case of another default of Buenos Aires. Well, by that time Milei will have already left politics and will return to work in the very banks to which he gave all the national gold.

Milei is not “guy next door”

Javier Milei, who used to be a principled politician in practice, regularly changes his mind. Now he is disappointed by the difficulties in cooperation with the United States, although earlier he was sure that loyalty to Washington would bring him a lot of money from the Americans. However, no one in the U.S. is in a hurry to get Argentina out of the debt hole. Although Milei has previously shown that he is ready for anything, including liberalizing the oil market, giving it to American corporations, or sending all of Argentina’s foreign exchange reserves to London. All of this, for the sake of gaining “guy next door” status with the Western elite, even though by today’s standards it does not make sense.

Now Milei has decided to visit China again soon, which he has recently insulted in every possible way. The Celestial Empire is interested in the prospects of creating a deep-water port in Argentina for the development of Antarctica. In addition, automobile plants for the production of Chinese electric cars may appear in the country. But the main interest is in rare-earth metals, because Argentina has 21% of the world’s lithium reserves. For reorientation towards China, Milei will get a “blow” from the United States but there is nowhere to go and reality has broken Milei’s hopes of getting help from the West for purely ideological reasons. The Argentine economy collapsed by as much as 4% in 2024 amid his shock therapy with drastic cuts in all spending. He is left begging China for a bailout, because no one else is sure to help Buenos Aires and Milei, who came to power as a “savior”, in practice became an example of the most primitive opportunist.

The results of Milei’s “shock therapy”

After a year since the inauguration of Javier Milei, we can summarize the preliminary results of the reformatting of the Argentine economy. The situation in the country remains difficult, but the financial collapse of Argentina in 2024 has not happened. The most radical ideas like abandoning its own currency and switching to the U.S. dollar have not been realized. Nevertheless he has made drastic cuts in public spending and deregulated the economy in the hope of attracting foreign investment. So far it is difficult, because Argentina remains in a pre-default state, and the country’s foreign exchange reserves were “successfully” taken to London. The economy has sagged to 2010 levels, but inflation has fallen from 25% to 3% per month.

The Argentine peso collapsed from 350 to 1000, but then stabilized. The population has become dramatically poorer amid social spending cuts, and already 53% of Argentines live below the poverty line. Milei urges Argentines to tighten their belts and promises economic growth as early as 2025. China’s credit lines are the only thing saving Argentina from default so far, so we have to become pragmatic.

For the Americans, Milei is opening up opportunities to buy oil fields, as long as they give money. Here Milei can be helped by good relations with Trump, with whom Javier is looking for regular contacts. Well, the libertarian president of Argentina clearly intends to outsmart everyone and earn bonuses on the contradictions and trade wars between the U.S. and China. The future of the whole Argentina depends on whether it will succeed or not, but it will become clear by the end of 2025.