Javier Milei is destroying Argentina's economy, making it a resource colony for foreign oligarchs

Argentina's libertarian President Javier Milei is promoting crypto scams and overseeing rapid deindustrialization. Manufacturing and construction are collapsing. The majority are living in poverty.

Argentina is governed by a right-wing libertarian named Javier Milei. He proudly identifies as an "anarcho-capitalist".

His career has been cultivated by powerful billionaire oligarchs, such as Eduardo Eurnekián, who employed Milei and several of his cabinet members.

Milei has also enjoyed the support of US billionaires like Elon Musk and Silicon Valley oligarch Peter Thiel. US President Donald Trump considers Milei to be an obedient ally.

When he campaigned for president in 2023, Milei embraced the nickname "el loco" (the madman). He brought a chainsaw to rallies, pledging to cut government down to the bone.

As president, Milei has promoted a cryptocurrency pump-and-dump scheme called Libra, which caused tens of thousands of his own supporters to lose millions -- while Milei's allies raked in $100 million in profits.

He has also devastated the real economy. Milei is overseeing rapid deindustrialization of Argentina. Manufacturing and construction are collapsing. Job loss has been enormous, in both the private and public sectors.

The majority of people in Argentina (53%) are now living in poverty. Their purchasing power and standard of living have been crushed by Milei's brutal austerity.

Nearly three-quarters (72%) of Argentines said in June 2024, after half a year of Milei's rule, that they were worse off economically.

While Argentina's real economy is in crisis, the stock market has boomed, enriching local oligarchs and rich foreign investors.

Milei's government has also promoted a notorious carry trade scheme known as the "bicicleta financiera" (financial bicycle) that has guaranteed massive returns for the few Argentines wealthy enough to invest.

Aside from finance, the few other sectors of the economy that are growing under Milei are agriculture and mining -- extractive industries that rely on exports and benefit from a falling currency and weak domestic demand.

In short, Argentina is being turned into an impoverished, deindustrialized resource colony for foreign corporations and oligarchs.

Corruption has also flourished in the South American nation. One of Milei's firsts acts after coming to power was to make nepotism legal, so he could appoint his sister, Karina Milei, as his presidential chief of staff.

Milei closed 13 government ministries, including those dedicated to education; labor and social security; science, technology, and innovation; and transportation; among others.

This has fueled significant brain drain, as technical workers leave Argentina looking for employment elsewhere. The Network of Authorities of Institutes of Science and Technology wrote, "Investment in science and technology is collapsing today in Argentina, reaching its lowest levels since the restoration of democracy [in 1983]”.

While he has slashed government spending on science, infrastructure, education, health, and families and children, Milei has more than doubled the budget for the Secretariat of Intelligence, which oversees spying and internal security.

The Secretariat of Intelligence, which Milei has embraced, was used by Argentina's far-right, US-backed military dictatorship in the 1970s and '80s to operate a murderous secret police force that killed, tortured, and disappeared left-wing activists and crushed labor unions.

Despite Milei's "libertarian" rhetoric, he selected as vice president the far-right activist Victoria Villarruel, a notorious apologist for the military dictatorship who has denied its crimes.

Argentina's President Javier Milei (center) and his sister and chief of staff Karina Milei (in the red suit), with Donald Trump and Elon Musk

Rampant poverty and inequality in Milei's Argentina

Under Milei's rule, more than half of the population in Argentina is living in poverty. The official number is 52.9%, according to a report published by the National Institute of Statistics and Census (INDEC) of Argentina's Ministry of Economy. This document, which is from September 2024, has the most recently available data.

These 52.9% of Argentines cannot afford the basic basket of goods and services that a household needs. As of September 2024, the cost of the basic basket was 709,318 Argentine pesos ($709 US dollars, with the exchange rate at the time), but the average family was living on an income of just 407,171 Argentine pesos per month ($407 US dollars).

The purchasing power of Argentine families has decreased further since then. Wage increases have not caught up with the sky-high rates of inflation, so real wages are falling.

18.1% of Argentines are in extreme poverty, meaning they cannot afford the basic food basket. As of September, they were living on an average household income of $232 USD per month, while the basic food basket cost $349 USD.

While the majority of people in Argentina live in poverty, income inequality is also very high.

The richest 10% of the population earns 24.5% of income, according to official statistics from the Ministry of Economy's INDEC.

The wealthiest 20% of Argentines receive 39.7% of income, and the richest 30% take in 51.8%, compared to just 8.6% for the poorest 20% of the population.

This is only taking into account income, not wealth. The rich are not rich because of high wages, but because of ownership of assets. Wealth inequality is much worse.

Massive job loss and worker precarity

Javier Milei is trying to push through extreme anti-worker policies, including a proposal that would increase the work day to 12 hours, without overtime pay, while allowing companies to compensate employees with tickets that can only be used at grocery stores or specifically designated businesses.

Local media outlets reported that the Milei administration has broken records with the destruction of jobs in the formal sector.

"The government of Javier Milei is pulverizing the labor market”, wrote the newspaper Pausa, noting the problem is four times worse under Milei than it was under the previous right-wing, multi-millionaire President Mauricio Macri, who also oversaw large job loss.

"Public or private, the number of people laid off is a record", the news outlet added.

As of October 2024, 10 months into Milei's term, 167,000 formal jobs in the private sector had been destroyed. Pausa noted that, in just a few months under Milei, Argentina faced the same job loss seen during four years of Macri's rule.

Although Milei's harsh austerity measures targeted the government, employment in the private sector has shrunk by even more (a 1.9% drop) than in the public sector (a 1.2% fall).

As Argentines have been plunged into poverty, they have been increasingly forced into the informal sector. Millions of people are living precarious lives, without steady paychecks, unsure of how they will make ends meet.

Inflation initially rose drastically under Milei, although it has fallen significantly from its peak of 292% in April 2024 to 84.5% in January 2025. Oligarch-owned financial media outlets have pointed to the relative drop in inflation as a political victory for Milei, but the reality is that his neoliberal policies have simply reduced demand by crushing the purchasing power of Argentine workers, many of whom can barely afford to survive.

The following chart shows the number of formal jobs in the private sector under four presidents of Argentina (from left to right): Cristina Fernández de Kirchner (CFK), Mauricio Macri, Alberto Fernández, and Javier Milei:

Rapid deindustrialization in Milei's Argentina

Milei's libertarian policies are leading to the rapid deindustrialization of the Argentine economy.

Employment has seen an enormous contraction in construction and manufacturing, and has fallen in transportation and health, while rising in extractive industries like agriculture and mining, which are dominated by local oligarchs and foreign corporations.

Argentina's economy is returning to the plantation-style colonial economy that it had in the 19th century, when it was an informal colony of the British empire. At that time, Argentina's economy resembled that of the southern Confederacy in the United States.

Manufacturing output in Argentina fell by roughly 10% year on year during Milei's first year in office, according to data from the Ministry of Economy's INDEC.

In the first few months after Milei's inauguration in December 2023, manufacturing production was crashing by double digits, including 21.4% in March and 20.2% in June, compared to the same months the year before. This problem did slightly improve at the end of 2024, but year-on-year manufacturing output was still significantly down.

This was a trend seen under previous conservative President Macri, who ruled from 2015 to 2019.

Both right-wing leaders prioritized the financial sector, agricultural exports, and mining. Argentina faced significant deindustrialization, and the number of manufacturing jobs shrunk rapidly.

Like manufacturing, construction has collapsed under Milei. Construction fell by roughly 30% year on year in Milei's first year in office, according to a report from the Ministry of Economy's INDEC.

This fall in construction, in addition to a huge influx in speculative foreign investment in Argentine real estate, has caused housing prices to skyrocket under Milei.

Local media outlets reported that the cost of a home in the capital Buenos Aires grew by 221% year on year, as of October 2024, rising faster than general levels of inflation.

Argentina's financial sector booms, while the real economy is in crisis

While Argentina's real economy has been in severe crisis, with rampant poverty, huge job loss, and collapsing manufacturing and construction sectors, the financial sector has boomed.

The main Argentine stock market index, the Merval, has skyrocketed under Milei, roughly quadrupling from the time he won the presidential election in October 2023 to its peak in January 2025. (It fell markedly in February, especially after Milei promoted a crypto pump-and-dump scheme that caused a massive scandal, scaring foreign investors.)

The enormous rally in the equity market has enriched foreign investors, who have benefited from Milei's policies, while the majority of the Argentine population lives in poverty.

This explains why the Western financial press has constantly praised Milei.

Nevertheless, the stock market does not reflect the health of the real economy. The composition of the Merval is dominated by banks, financial firms, telecommunications utilities, and energy companies. These are privatized natural monopolies. They are not innovative companies generating employment and making people's lives more comfortable.

The rapid rise in stock prices has not benefited the rest of the economy, and especially working-class Argentines, who don't own stocks and can barely afford groceries.

Wall Street's man in Argentina runs the Ministry of Economy

Although Milei portrays himself as a "populist", he has continued many of the same neoliberal policies implemented by former President Macri, a conservative ally of Argentina's powerful oligarch class.

Milei and Macri both served the financial sector at the expense of the real economy -- although Milei has taken this to a whole new level.

Milei also brought back some of the former top officials from Macri's government.

One of the most powerful people in the Milei administration is Economy Minister Luis Caputo, who served as finance minister under Macri.

Caputo previously worked at JP Morgan, the largest US bank. He was in charge of Latin America trading (ie, speculation) for the Wall Street giant. He also worked as the head of Latin America trading (speculation) for Germany's Deutsche Bank.

In other words, Caputo is a wealthy Wall Street speculator, who helped Western banks profit in Latin America.

Argentina's Minister of Economy Luis Caputo (left) and President Javier Milei (right)

Caputo is also a multimillionaire. While the majority of people in Argentina are in poverty, and families are surviving on just a few hundred dollars per month, barely making enough to buy food, Caputo has millions of dollars stashed in bank accounts in the United States.

This was revealed by an Argentine journalist who got access to a disclosure document that Caputo had to file when he was nominated to be minister of the economy. It shows that he has several accounts in US dollars at numerous banks in the United States, summing to millions in total.

Caputo himself confirmed on Twitter that the documents showing his foreign bank accounts were real, but he defended himself from criticism by stating, unironically, "I earned my money working in the private sector, breaking my soul”.

These disclosures did not include Caputo's investments, or his real estate holdings.

It is also not clear if Caputo is stashing money in tax havens. He was previously implicated in the Paradise Papers, the leak of information about offshore tax shelters.

Although this caused a scandal in Argentina in 2018, when Caputo served as Macri's finance minister, he was brought back by Milei to be the minister of the economy.

Milei subordinates Argentina to the USA

Economically, Milei has obediently followed the neoliberal orthodoxy of the Washington Consensus. This explains why the US-dominated International Monetary Fund (IMF) has celebrated him.

During his presidential campaign in 2023, Milei promised that he would dollarize the Argentine economy, abandoning his country's monetary sovereignty by adopting the US dollar as the official currency.

Development economist Ha-Joon Chang warned this would turn Argentina into a de facto US colony.

Politically, this is exactly what is happening to Argentina.

Milei has proudly sold himself as one of the most pro-US leaders on Earth, allying especially closely with Donald Trump and Elon Musk.

Not only do they agree politically on most issues, but Argentina has lucrative natural resources that Musk wants, including some of the world's largest reserves of lithium: the "white gold".

Musk, the world's richest oligarch, has met with Milei multiple times, visited Argentina, and encouraged foreigners to invest in the country. Musk's company Tesla needs a lot of lithium for the batteries in its electric vehicles, and he has hoped that Milei will give him large supplies on the cheap.

Back in 2023, Argentina had a center-left government that sought to join BRICS. It accepted an invitation to become a member at the 2023 BRICS summit. However, when Milei came to power in December of that year, he rejected the offer, preventing Argentina from joining the Global South-led organization.

To justify his decision, Milei attacked China and Russia, condemning them as communists. At an event with the US think tank the Council of the Americas, which is funded by a Who's Who of major US corporations, Milei denounced BRICS and declared, "Our geopolitical alignment is with the United States and Israel. We are not going to align ourselves with communists".

Argentina's President Javier Milei with Israel's Prime Minister Benjamin Netanyahu

In addition to allying as closely as possible with the United States, Milei has strongly supported Israel as it has carried out crimes against humanity in Gaza, and as Prime Minister Benjamin Netanyahu faces an arrest warrant at the International Criminal Court.

Under Milei, Argentina has been one of the very few countries on Earth that has joined with the United States in voting against the vast majority of the international community at the United Nations General Assembly.

Argentina has opposed the right of the Palestinian people to have their own country, and Milei's regime has supported Israel's illegal occupation of Palestinian territory.

Milei has also given free reign to the US Central Intelligence Agency to operate in Argentina. He even invited the CIA director to come to Buenos Aires to meet with top government officials, where they signed an agreement in which the infamous US spy agency (which has sponsored coups d'etat and military dictatorships across Latin America) will train Argentina's intelligence services on how to combat "terrorism".

What Milei calls himself a libertarian, he has embraced conservative cultural policies. He wants the state to ban abortion and control women's bodies.

He also has strongly supported Spanish colonialism, celebrating the European conquest of the Americas.

Likewise, Milei closely allied Argentina with Ukraine, supporting Kiev in the NATO proxy war against Russia. He even invited Ukrainian leader Volodymyr Zelensky to his inauguration in Argentina, where the two did a photo shoot embracing in a big hug.

Milei gave the US military control of an Argentine weapons factory in order to produce ammunition on behalf of NATO, to send to Ukraine.

Nevertheless, although he had previously strongly supported Zelensky, Milei obediently followed Trump's orders and suddenly turned against Ukraine in February 2025. The political 180 was the clearest symbol of Milei's subservience to Washington.

Milei is willing to do anything to please his masters in the United States -- including selling his country.