Milei is taking a chainsaw to the Argentine state | International | EL PAÍS English

The far-right economist and TV panelist Javier Milei came to power in Argentina declaring that “there’s no money.” Armed with a chainsaw — a campaign prop — he won the 2023 presidential elections promising to reduce the size of the state to the bare minimum, in order to rein in the national debt and get control of inflation. During his first 10 months in office, he fulfilled his promise of cuts: spending has been reduced by 30% year-over-year in real terms (adjusted for inflation), according to calculations by the Center for Argentine Political Economy (CEPA) and the Association for the Budget and Public Financial Management (ASAP).

Milei has mercilessly used his chainsaw, always with the excuse that he’s waging a war against the political class, which he accuses of turning the prosperous and powerful Argentina of 100 years ago into a “factory of the poor.” His broad definition of the so-called “political caste” includes politicians, trade unionists, journalists, actors, intellectuals, big businesspeople and bankers. Milei refers to them, varyingly, as “miserable rats,” “dirty asses,” “degenerate prosecutors,” or “filthy leftists.”

Since December 10, 2023 — the day he was sworn in as president — Milei has shuttered 13 ministries and fired some 30,000 public employees, the equivalent to almost 10% of the federal workforce. He has also frozen public works and reduced the funds that are allocated to education, health, scientific research and pensions. The budgetary cuts have been especially hard on infrastructure (-74%), education (-52%), social development (-60%), healthcare (-28%) and federal assistance to the provinces (-68%).

In this scenario of widespread cuts, however, funds for the State Intelligence Secretariat (SIDE) have grown by 216% since January of 2024 in year-over-year terms. And almost $350 million has been invested in the purchase of fighter planes.

A sector-by-sector breakdown allows us to see the full impact of Milei taking the chainsaw to the Argentine state.

Pensions suffered particularly hard from Milei’s cuts. As soon as he took office, the president established — by executive decree — an increase to pensions starting in April, based on inflation. The problem was that the decree didn’t take into account the 20.6% growth of the Argentina Consumer Price Index (CPI) that was registered in January. His move resulted in subsequent savings for the public coffers, and obvious damage to retirees.

The strategy was part of Milei’s plan to achieve a fiscal surplus in the first-quarter of the year. Congress — with a large opposition majority — approved an extra increase of 8% to compensate for the prices that rose in January, but the president vetoed the law. “You’re fiscal degenerates,” he scoffed at the lawmakers, who failed in their attempt to override the executive veto, due to the lack of votes. The Argentina pensioner in the lowest income bracket currently receives the equivalent of $320 a month, or barely a third of the $900 that a household requires to survive.

Investment in infrastructure is frozen in Argentina. Milei suspended all projects that were in the pipeline, interrupted transfers to the provinces for works-in-progress and began audits of all active contracts. The Argentine Chamber of Construction (CAC) estimates that the state owes contractors about 400 billion pesos (or $400 million) and that 200,000 workers have been fired in the construction sector since the start of the Milei administration. However, the president considers the freezing of public works to be a success, having accused the contract process of being corrupt. The Secretariat of Public Works — which was a ministry until last December — has seen its budget reduced by almost 93.5%, while the National Highway Directorate saw its budget slashed by 75%.

Like the areas of Science and Culture, among others, Education has lost its status as a ministry under Milei’s government. It has instead become a secretariat. This institutional downgrading correlated with the reduction of the national education budget, which — according to various estimates — has fallen by 50% year-over year.

One of Milei’s first measures after taking office was the elimination of the National Fund for Teacher Incentives, which padded the salaries of teachers throughout the country and represented almost 80% of the transfers from the federal government to the provinces for educational purposes. In addition to suspending infrastructure upgrades to schools, he also cut student scholarship programs by 69%.

Since the provincial governments are responsible for providing primary and secondary education, the greatest fiscal adjustment has affected public universities, which depend on the federal government. At the beginning of the year, the executive branch strangled universities by extending the 2023 budget without updating it to take into account inflation, which — at the time — was nearing 290% year-over-year. Many campuses were left without resources to pay for gas heating and electricity, while the university system declared a state of emergency. The academic community protested with a massive national mobilization that finally forced the government to deliver more resources. But the conflict has erupted again in the last two months, due to the decline in the salaries of professors and administrative staff.

According to the National Interuniversity Council, “70% of teaching and non-teaching salaries [in Argentina] fall below the poverty line.” A broad opposition agreement managed to approve the University Financing Law in Congress last month, to force the government to update the educational budget. But, despite a new protest by students and professors, Milei vetoed the law and, on October 9, he obtained parliamentary support for his decision.

Mass mobilizations from the universities began again this week and are set to spread throughout the country.

“Investment in science and technology is collapsing today in Argentina, reaching its lowest levels since the restoration of democracy [in 1983],” warned the Network of Authorities of Institutes of Science and Technology a month ago. The sector’s funds lost a third of their purchasing power compared to last year.

In 2024, the government cut the salaries of researchers and support staff at the National Scientific and Technical Research Council (CONICET), the main organization dedicated to science and technology in the country. It also drastically reduced the number of doctoral and postdoctoral scholarships, dismissed 15% of the administrative staff of CONICET, froze the budget for the National Agency for the Promotion of Research and ceased projects in key institutions, such as the National Institute of Industrial Technology (INTI) and the National Atomic Energy Commission (CNEA).

Scientific authorities warn that this scenario is encouraging a “brain drain” — the emigration of young STEM researchers. In fact, in 2024, there was a 30% drop in applications to research and scientific positions in the country. In a public letter addressed to Milei last March, 68 Nobel Prize winners warned that “the Argentine science and technology system is approaching a dangerous precipice.”

A central aspect of Milei’s adjustment program is its symbolic nature, where the magnitude of the reduction in spending isn’t as important as its perceived impact on the so-called “culture war” that the far-right government intends to wage. With this in mind — and as part of his battle with the press — the president ordered the closure of the Télam News Agency in March, accusing it of being “a propaganda mechanism.” Founded in 1945, it had almost 800 employees and was the largest state news agency in Latin America. Its reports covered the entirety of Argentina.

The Institute of Cinema and Audiovisual Arts (INCAA) has been another high-profile victim of Milei’s chainsaw. The government initially sought to close it entirely, but when Congress refused, it opted to gut its budget. The INCAA suffered from staff layoffs, program closures, the suspension of production of films that had already been approved, as well as the defunding of film festivals. Similarly, the budget cuts, layoffs and precariousness of staff affected the Theater Institute, the National Endowment of the Arts and the National Library, among other cultural entities.

It also affected museums: “They took away the few resources they had to manage daily activities. For almost the entire year, museums and spaces that depend on the Ministry of Culture didn’t even have toilet paper, which was embarrassing,” says Nicolás Rodríguez Saa, leader of the State Workers’ Union (ATE).

This past August, the government dissolved the special investigation unit that focused on disappeared children. It was created in 2004 to search for the children and grandchildren who were taken from their mothers and adopted off illegally during the last military junta (1976-1983). And, in September, it stopped funding the Grandmothers of Plaza de Mayo, which searches for people born in clandestine detention facilities during the dictatorship. So far, the human rights organization has managed to determine the true identity of 133 grandchildren. Both measures — added to aforementioned dismissal of workers — are part of the 180-degree turn in Argentina’s human rights policies since Milei’s arrival to the presidency.

In this area, budget cuts are the tip of the iceberg. There’s been a drastic change of discourse that has put the consensus of Argentine society against state terrorism in check. The far-right leader has downplayed the crimes against humanity perpetrated by the dictatorship. The acts are now considered to be “excesses” committed by certain military personnel, despite court rulings that prove the existence of a systematic plan of abductions, torture, rape and disappearances, as well as the kidnapping of babies belonging to dissidents.

Sixty-six percent of Argentine children under the age of 14 are living in poverty. Even so, Milei has reduced the budget allocated to children — a cut criticized by both local organizations and the United Nations. The government maintains aid such as the Universal Child Allowance (AUH) and the Food Benefit (TA) received by low-income families with children in their care, but has eliminated subsidies that were managed through social organizations, accusing them of being “poverty managers” and of having set up a “modern slavery system.” Among the aid interrupted is the distribution of food to soup kitchens, which serve children and entire families. Employment programs channeled through worker cooperatives have also been cancelled.

The price increases in private health insurance after the liberalization that was approved (and then temporarily revoked) by the government caused some private insurance companies to lose up to 10% of their clients in the first months of 2024. Some went out looking for cheaper alternatives, although others opted for public healthcare, which has seen demand increase in a scenario of declining resources.

The biggest cut is in salaries and especially affects workers in hospitals that depend on the federal government. Among them is Garrahan, the largest pediatric hospital in Argentina, a benchmark in Latin America for its medical and educational excellence. The Ministry of Health — led by veteran private medicine executive Mario Lugones — is also looking to restructure health centers that it considers to be unprofitable, such as the Laura Bonaparte Hospital, which specializes in mental health and addictions.

In Argentina — a country where a femicide is committed every 35 hours — Milei hasn’t only closed the Ministry of Women: he’s also shuttered the Undersecretariat of Protection Against Gender Violence. His administration has also reduced the number of telephone lines that support victims of gender-based violence to 144, while defunding programs intended to help women and girls who suffer from abuse. One of the gutted programs used to provide six months of economic support to victims of domestic violence, so that they could leave aggressors’ homes and rebuild their lives.

The far-right leader considers feminism to be one of the great enemies in the culture war that he leads. He has banned the teaching of gender theory and the use of inclusive language throughout the national administration and is firmly against schools providing comprehensive sexual education. Milei maintains that abortion is “murder,” which has raised fears that, in the future, he’ll act against pro-choice legislation that was approved in 2020.

The subsidies offered by the left-wing Kirchner and Fernández administrations (2003-2015, 2019-2023) for electricity, gas, water and public transit meant a heavy burden on the public coffers that Milei began to lighten from day one. In 2023, for instance, the energy subsidies alone were equivalent to 1.4% of Argentina’s GDP. The fiscal savings obtained by Milei in this area have been achieved with an increase of almost 400% in the cost of public services — something that has greatly complicated household spending. According to a report published by the Interdisciplinary Institute of Political Economy (IIEP), in December 2023, a middle-class family spent about 30,105 pesos (about $30) a month on electricity, gas, water and public transportation. But in September of 2024, spending had risen to 141,543 pesos ($142).

One of the pillars of fiscal deficit control has been the reduction of transfers that the federal government must make to the provinces. The money comes from income taxes and sales taxes, which are distributed according to fixed percentages established by the Federal Revenue-Sharing Law among the 24 districts of the country. The transfers are divided into the categories of “mandatory spending” and “discretionary spending.” The former fell by 19%, a product of the economic recession. The latter — which depends on the will of the presidency and has been used by successive federal governments as a weapon to tame the governors — has been reduced by 89.5% since December 2023, with Mieli specifically targeting federal contributions to state-led public works. The most affected provinces were La Rioja, Formosa and La Pampa.

Milei declares himself to be an anarcho-capitalist who — forced by the circumstances — finally surrendered to “minarchism.” Anarcho-capitalists believe that the state shouldn’t exist, while minarchists feel that it should only deal with the defense of borders and internal security. Faithful to these principles, the Ministries of Security and Defence have emerged almost unscathed from Milei’s chainsaw in 2024, and they’ll even see big boosts to their budgets in 2025. The Ministry of Security — which is in charge of the Argentina Federal Police — saw its budget fall by 22.3% in 2024, while the money allocated to the Armed Forces fell by only 15.9%, well below the average cuts that have been made to each sector of the state. Meanwhile, the intelligence services (+216%) and the Joint Staff of the Armed Forces (+18.6%) are the only two green marks on a map covered in red.

The negative figures within the Ministry of Defence, however, hide some pricey milestones. Milei’s administration purchased 24 F-16 fighters from Denmark for $301 million, following an agreement with the United States. And the government will invest another $46 million to modernize the military facilities that will receive the new planes. The 2025 budget is set to be particularly favorable to the sector, with an increase from 0.8% to 1% of GDP in defense spending.