In his first year as Argentina's president, Javier Milei introduced sweeping cuts to public spending, sending poverty rates soaring. Now pensioners are leading the protest.
Every Wednesday, for several months now, groups of pensioners have been gathering outside Argentina's parliament. Argentina. They are protesting against the heavy pension cuts imposed by the government of Javier Milei, and over the weeks other groups of citizens have joined them, including far-left ultras. The most recent demonstrations have seen violent clashes with law enforcement, resulting in dozens of injuries and arrests.
Ultra-liberal president Milei came to power at the end of 2023 and has since implemented a series of radical measures aimed at restoring Argentina's economy. His sweeping cuts to public spending have brought down inflation and stabilised the peso, the national currency, but this has gone hand in hand with a dramatic rise in poverty and an increase in unemployment. After just over a year of the Milei administration, popular discontent is growing, as evidenced by the Wednesday protests and clashes. And the president's response is repression.
The symbol of Javier Milei — a far-right populist who has described himself as an anarcho-capitalist — throughout his 2023 election campaign was a chainsaw. It represented his promise of drastic cuts to public spending to restore Argentina's economy, one of the hallmarks of his campaign alongside his aggressive rhetoric, his relentless attacks on civil rights such as abortion, and his climate change denial.
When he won the presidential election on 19 November 2023, Milei immediately set his famous shock therapy for the country's economy in motion. "There is no alternative to austerity," he stressed in his inaugural address, accusing his predecessors of having plunged Argentina into an unprecedented economic crisis. At that point the country was heading towards a GDP contraction of 2.5 per cent, inflation had reached peaks of up to 200 per cent, and public debt was at record levels. Milei's prescription was to dismantle the state and privatise Argentina.
Within a short time the president had shut down 13 ministries and dismissed around 35,000 public sector employees. A large portion of public works were halted and the state ran up hundreds of millions of dollars in debt to contractors. Funding for education was drastically cut, with a 50 per cent reduction in real annual terms and the elimination of numerous teacher subsidies and student scholarships, while universities declared a state of emergency due to the severe budget reductions.
Heavy cuts were also made to healthcare, with reduced salaries for public hospital workers and higher private health insurance premiums, which pushed new users onto an already struggling public sector. Pensions too bore the brunt of Milei's austerity measures, with small, incremental increases that failed to keep pace with rising consumer prices. The president also stripped resources from media and culture, shutting down news agencies and film institutes; from the human rights sector, withdrawing investment from programmes supporting victims of the Argentine dictatorship; from gender-based violence programmes; and from social welfare measures, such as soup kitchens for children living in poverty, subsidies for gas, electricity and water bills, and allowances for people with disabilities. All of this took place while investment in security and defence was increased, the rental market was deregulated — leading to more properties on the market but also to higher prices — and several state-owned companies operating in the energy, motorway and railway sectors were privatised.
The drastic measures implemented by President Milei during his year and a little more in office have had visible and tangible effects on the country. Some of Argentina's economic indicators have indeed improved, boosting the country's credibility on the international stage. However, it is the population that has paid the price most dramatically — both the middle class and the poorest sections of society.
Milei's first year in office brought about a stabilisation of the peso against the dollar and a significant reduction in inflation, now sitting at around 84 per cent compared to the previous peaks of 200 per cent, as well as a reduction in public debt — so much so that in 2024 the country achieved a balanced budget. The International Monetary Fund welcomed these results and agreed to negotiate a new agreement with the country to unlock fresh funds. But while Argentina's image has improved in the eyes of international financial institutions, life in the country has become extremely hard for everyone — except for the wealthiest minority of the population, who have benefited from a more favourable financial environment.
The first half of 2024 ended with 50 per cent of the population living in absolute poverty, after peaks of 54 per cent in the preceding months. At the end of 2023, 40 per cent of the Argentine population was in this situation, which means that Milei's shock therapy generated five million new poor people. Prices of food, housing and social services skyrocketed following the initial massive devaluation of the peso pushed through by Milei. Looking at the past two years, the general price index has recorded a +655 per cent rise. Real wages have not kept pace with this trend, despite small increases, causing a collapse in the population's purchasing power and a 15 per cent reduction in consumption. For millions of people, grocery shopping has become a matter of strategic survival, with long queues forming outside supermarkets when attractive deals are launched, and spikes in consumption in the days following payday, out of fear that purchasing power could collapse even further in the weeks ahead. Argentina is today by far the most expensive country in Latin America, where a coffee at a café has reached around 3.5 euros.
Among those bearing the brunt of the situation are pensioners: two out of three receive the minimum amount, equal to around 250 euros a month, and the value of pensions has collapsed by 17 per cent in just a few months due to the surge in prices. Added to this are the difficulties caused by Milei's various cuts to subsidies, healthcare and social services. According to data from the National Institute of Statistics and Census (Indec), poverty among the over-65s rose from 17.6 per cent to 29.7 per cent in the first six months of Milei's presidency. And it is precisely from the discontent of pensioners that a protest movement has emerged, one that is drawing in an ever-growing number of people.
For several weeks now, every Wednesday, groups of pensioners have been gathering in Buenos Aires outside the parliament building to protest against the austerity measures introduced since Milei took office. Initially they were small, peaceful demonstrations, but over time more and more people have joined, including the left-wing ultras of some of Argentina's leading football clubs. This unusual anti-Milei alliance between pensioners and ultras has made the protests noisier and raised the level of confrontation. Law enforcement authorities have violently cracked down on the most recent demonstrations, beating some pensioners with batons. Numerous protesters were arrested, while President Milei denounced an ongoing plot against Argentina and an attempted coup. Judge Karina Andrade subsequently ordered the release of the demonstrators.
Milei's approval ratings, which remained largely stable throughout his first year in office despite the austerity measures introduced, have now begun to waver. The president has stated he has no intention of stopping, insisting that today's sacrifices will have positive consequences tomorrow, and that protecting wealthier segments of the population at the expense of poorer ones will ultimately benefit the latter as well. Yet in recent weeks even the wealthiest investors have suffered the negative consequences of Milei's initiatives. In February, the president promoted the cryptocurrency $Libra, calling for a rush to buy it in order to fund certain business projects and support Argentine economic growth. Its value surged on the back of purchases by numerous investors, but it quickly collapsed, causing substantial losses for around 40,000 people. President Milei is now under investigation for fraud and faces the risk of impeachment.