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The new president of Argentina, Javier Milei, has a far-right policy platform. In his little time in office, he has already sent Congress a number of reform proposals that will fundamentally change the composition of the Argentine state. Since going into politics, Milei has concentrated on advancing libertarian ideas, including dollarizing the Argentine economy, reducing the size of the government, and dismantling the Central Bank.

In terms of economics, Milei respects the policies of former president Carlos Menem and is influenced by the Austrian School. As he sees socialism as the embodiment of force and jealousy, he is in favor of capitalism.Since taking office, Milei, an economist by background, has referred to himself as a libertarian and an “anarcho-capitalist.” Milei, who has criticized past administrations for their excessive spending, suggests cutting back on government ministries and tackling economic issues through fiscal reforms and spending reductions. He has referred to former British prime minister Margaret Thatcher as "a great leader" and lauded her economic ideas.

His main economic idea for Argentina is to replace the peso, the native currency, with the US dollar. He has stated time and time again that stopping politicians from printing money is the only way to put an end to the evil of inflation, which has reached over 140%. He intends to shut down the Central Bank as a result.Milei has called the Central Bank of Argentina “one of the greatest thieves in the history of mankind”. He stated that "four types of central banks exist: the really awful ones, such as the Federal Reserve; the extremely bad ones found in Latin America; the tragically horrible ones; and the Central Bank of Argentina. In order to give people, the freedom to select their own monetary systems, he supports the Central Bank's ultimate dissolution. In addition, he supports a dollarized economy as a way to combat the nation's ongoing inflation issues. Milei said, in reference to the 1990s Convertibility Plan, that Argentina had the lowest inflation rate in the nation by January 1993.

The fact that Argentina has a long-term foreign-currency sovereign rating of "CC" indicates that there is a greater likelihood of a restructuring or other type of default event occurring in the upcoming years. Preventing this situation probably requires a significant increase in international reserves, which will be challenging given their low beginning position and difficulties in the adjustment process. Regaining market access is also probably going to be necessary, and that might be more difficult. Since foreign-currency bond payments will begin to pause in 2025, there is not much time left to meet these requirements. Due to strict balance of payments regulations, fluctuating currency rates, and a sizable primary budget deficit supported by central bank credit, the country's economy has been cut off from global financial markets for more than four years. Argentina also plans to cut back on subsidies related to energy and transit. 

As the new libertarian president of Argentina, Javier Milei has prescribed economic "shock therapy" economic strategy, a drastic and probably painful plan to stabilize the economy of the South American nation facing its worst crisis in decades. This strategy reflects his beliefs in fiscal restraint and free markets, as well as his acute awareness of the limited time he has to enact the policies required to stabilize and transform the nation. The plan called for massive cuts to public spending as well as a more than 50% depreciation of the peso. Given the limitations he confronts, his approach appears to provide the best chance of success despite being fraught with political and economic hazards.

Javier Milei's free-market economic policies—which include tax cuts, privatization, and deregulation—may push Argentina closer to a market economy by encouraging investment and employment growth, but they also raise questions about social inequality and the reduction of welfare programs. If Javier Milei's economic plans are put into practice with the required adjustments, they might help Argentina's economy revive. Nonetheless, their efficacy hinges on their suitability for Argentina's distinct conditions, tackling systemic problems, and cultivating agreement among interested parties for enduring recuperation initiatives.

Ishrat Jahan Shithi is a Research Intern at CGS