Argentina’s already beating England… on economic freedom
Javier Milei’s free market reforms are turning the Argentinian economy around. The UK could learn a few lessons from this Margaret Thatcher fan, says Alys Denby
When Britain took on Argentina in the Falklands war, we were fighting a brutal military dictatorship which tortured its citizens and invaded the sovereign territory of ours. Tonight, England faces a country that is, in some ways, more free than our own. It even has a President who cites Margaret Thatcher as his inspiration.
Javier Milei radical free market reforms have transformed Argentina’s economy. On election in 2023, he inherited a nation on the brink of collapse, with inflation running at 25 per cent a month, a fiscal deficit of 15 per cent of GDP and no borrowing capacity.
Milei proceeded to slash public spending, bringing inflation down to just two per cent a month, achieving a fiscal surplus and delivering Argentina’s first balanced Budget since 1900. Last year the Argentine economy grew by 4.4 per cent – a figure Britain hasn’t matched since well before the financial crisis.
Take a chainsaw to your sacred cows
While there are big differences between our two nations, Argentina does offer some useful lessons. Some of the deepest cuts Milei has made have been to pension spending, accounting for 35 per cent of the total. He then went on to win a landslide victory in his country’s midterms, securing 41 per cent of the vote. Our leaders should note that if you promise change and win a mandate for it, you can take a chainsaw to a sacred cow like pension spending and still retain public support.
Argentina also demonstrates basic economic tenets in real-time. Milei abolished rent controls and prices fell by 30 per cent while the supply tripled. A fact of which Sadiq Khan, Zack Polanski and others should be reminded every time they float this moribund, populist idea.
It has not all been plain sailing for Milei – political instability remains a major risk factor for international investors. So Argentina offers hope but also a warning. Britain’s unsustainable borrowing and spending will eventually mean there is no alternative to a Milei-style revolution. The longer we leave it, the harsher the medicine will have to be. It should not take a crisis as severe as our South American opponents have experienced for us to wake up to this truth.
As in football, so in politics, winning for your country is never inevitable. It takes strong leaders, a little bit of luck, and the right choices.
Alys Denby is opinion and features editor of Morning Wire