How the United States Can Help Argentina Sustain its Economic Reforms

President Milei is an anti-totalitarian, pro-American leader in a region currently swamped by dictators, cartel enablers, and socialist sympathizers
Foto de fondo: Adam Michael Szuscik (Unsplash). Principal: Javier Milei en X

“Shock therapy” is how Javier Milei described his proposals to restore Argentina’s fiscal health when running for the Argentine presidency. Now he has enacted some of those proposals, we see it was an apt metaphor. President Milei’s reforms may be painful, but they are reversing decades of backwards, Marxist policies. The United States should support this, because a healthier Argentina is good for Argentines, good for the region, and could help break our crippling dependence on Communist China.

Americans have long looked to Argentina as a partner. The South American nation is the eighth-largest country in the world by land area and contains a population of nearly 50 million. It is also strategically located and rich in natural resources—including lithium, a key component of modern batteries whose international market Beijing has otherwise cornered. A century ago, these advantages gave Argentina the world’s seventh-largest economy and a greater per-capita Gross Domestic Product than European nations like Spain and Italy.

Unfortunately, decades of inept governance initiated by President Juan Peron drove Argentina’s world-leading economy into the ground. By 2023, runaway government spending had prompted nine defaults on the national debt, indebted Buenos Aires to the International Monetary Fund by $110 billion, and created monstrous 211 percent inflation. The Argentine people elected President Milei to deal with this problem by slashing spending and removing burdensome bureaucracy. Such austerity was—and is—the only alternative to endless decline.

Good things are now on the way. The monthly inflation rate appears to be in the single digits, down from 25 percent last year, and foreign investment in Argentina is rising rapidly. This explains why a majority of Argentines still support their president. Austerity, however, is never easy. Used to decades of overly generous public benefits and subsidies, tens of thousands of people have mobbed the streets in protest. Moreover, because President Milei and his party do not control a legislative majority, they cannot enact the full range of reforms that would address the issues protesters have raised, and Peronists are so entrenched in Argentina’s elite that they are unlikely to win a majority in the next election.

Targeted, accountable, and temporary assistance from international organizations with American backing could be the answer. Such assistance provided a vital lifeline to Greece during the euro bailouts. It did much the same for Poland in the wake of turmoil in the 1990s. It has also been extended to Argentina before, under the 2015-2019 Macri Administration. The United States should urge the international organizations with the greatest weight in Argentina—namely, the Inter-American Development Bank, the World Bank, and the International Labour Organization—to fill the gap left by Argentina’s legislature and provide financial assistance to vulnerable populations.

American businesses also have a role to play. They already appear eager to invest in Argentina, since its president is among the world’s most market-friendly. Appealing to self-interest, I would remind them that President Milei stands in stark contrast to China’s Xi Jinping, who is just as willing to inflate his nation’s economy by buying shares as he is to stifle it with iron regulations. Appealing to patriotism, I would remind businesses that the more Argentina aligns with the United States, the more America will be free to resist Beijing’s bid for global domination.

President Milei is an anti-totalitarian, pro-American leader in a region currently swamped by dictators, cartel enablers, and socialist sympathizers. This year, he rejected an invitation to join BRICS because he did not want to side with Russia, China, and Iran. As such, the United States has a national interest in supporting President Milei and his common-sense agenda. If rallying international organizations and investments is the solution to Argentina’s austerity-induced pain, then we should not hesitate to pursue it.

Marco Rubio

Marco Rubio es senador estadounidense por el estado de Florida y Vicepresidente del Comité Selecto de Inteligencia del Senado.

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