The chainsaw could become the symbol of the present era. It is what Argentine President, the ultraconservative Javier Milei–who last week gave one to Elon Musk as an encouragement to cut unnecessary government spending–hopes.
In his second State of the Union address since taking office 15 months ago, Milei explicitly stated that his “chainsaw” cuts to the state budget mark a “momentous change,” and are a strategy that will last “for years.”
Milei attacked the opposition —which he once again called “the caste” —and announced an agenda focused on security and economy, with no major surprises and in a rallying tone ahead of the incipient election campaign.
He also confirmed that he is successfully working on an agreement with the International Monetary Fund (IMF) and will send it to Parliament for ratification once it is finalized.
Milei has initiated a slash-and-burn program of public spending cuts to pull Argentina out of the terrible economic recession of recent years. The country has reached a balanced budget in 2024.
Buenos Aires is the world’s largest debtor to the IMF and is negotiating a new $11 billion loan. The cuts meanwhile improve the country’s economic indices, harming the population and especially the most fragile groups.
According to the Observatorio Deuda Social, as of the third quarter of last year, poverty reached 49.9 percent. Public spending was cut by 28 percent. The biggest cuts are in public investment, pensions, social assistance, benefits, and public wages. With this fierce recipe, the third quarter of 2024 GDP has returned to growth, and inflation has fallen (it had reached 292% in April 2023, in the last quarter of 2024 prices rose on the year at just over 30%). Employment is also on the rise.
“We want to allow this Congress to accompany us in the ambitious process we have undertaken and in this new agreement (with the IMF),” the president said. Milei again called on Congress to support his reform agenda. “If they accept my offer, I will see that they are willing to commit to what the country needs. If not, they will have shown that the only way to change the country is to change this Congress.”
