Is Milei’s economic gamble paying off?

Summary

Business Daily (BBC World Service)

Episode: Is Milei’s economic gamble paying off?

Date: March 10, 2025
Host: Natalio Cozoy

---

Episode Overview

This episode explores the first year of Javier Milei’s presidency in Argentina, analyzing the effects of his radical economic policies on macroeconomic stability, businesses, and especially ordinary Argentines. With inflation slowing and markets reacting positively, the government claims success—but the human and industrial costs are sharply controversial. The episode features testimonies from business leaders, vulnerable citizens, local officials, and economic analysts, providing a nuanced picture of Argentina’s high-stakes "economic shock" experiment.

---

Key Discussion Points & Insights

1. Milei’s Economic Agenda and Its Immediate Impact

• Shock Therapy: Upon taking office in December 2023, President Javier Milei implemented aggressive fiscal austerity and market-liberal policies as part of a stabilization plan.
  • Quote:
    "The sacrifice Argentines had to go through due to his policies of economic shock would not be in vain."
    — Natalio Cozoy [01:09]
• Economic Indicators:
  • Inflation—the country’s “main foe for years”—has slowed to less than 3% per month.
  • Public accounts are balanced; financial markets have reacted positively.
  • Quote:
    "Some economic figures here are indeed looking good."
    — Natalio Cozoy [03:04]
  • However, poverty rates remain high—half the population is poor after six months, and almost a fifth face severe deprivation.

2. Business Perspective: Pain and Hope in Industry

• Javier Maltz of Grupo Estisol (manufacturing):
  • Acknowledges the necessity of fiscal cuts after prior overspending.
  • Suffered a 40% drop in business volume, likening it to the pandemic downturn.
  • Quote:
    "There was a big, big, big, big recession... that represented for us a lowdown of around 40% in our volumes, which is very hard, very similar to what happened in the pandemic."
    — Javier Maltz [05:13]
  • Highlighted unfairness in market opening: Argentine producers face much higher costs (taxes, delayed currency adjustments) versus foreign competitors.
  • Quote:
    "We pay taxes that are not being paid abroad... So now Argentina became very expensive in dollars."
    — Javier Maltz [07:01]
  • Despite struggles, senses nascent market recovery and maintains cautious optimism.

3. Social Services and Vulnerable Populations: Deep Suffering

• Cutbacks in Public Spending:
  • Social programs, infrastructure, and direct food aid (like support for soup kitchens) have been slashed or discontinued.
  • Soup kitchens like Merendero Sonrisas (Smiles Soup Kitchen) in Pilar report their client base has quadrupled as government support ends.
  • Quote:
    "The national government has already cut off that support because they don't believe in community dining halls."
    — Sandra (Soup Kitchen Worker) [16:56]
• Healthcare Crisis:
  • Removal of price controls caused private medical premiums to triple, pushing more people onto strained public health services.
  • Quote:
    "I used to pay 50,000 pesos and now it's gone up to around 120,000."
    — Sandra [19:04]
  • Vulnerable people must ration critical medicines due to rising costs.
  • Quote:
    "People are forced to choose which medication should I take, which one is key to keeping me alive."
    — Dr. Agata Fernandez [20:26]
• Pensioners and Older Adults:
  • Suffering most from rising costs and dwindling state support.
  • Quote:
    "I don't think things are going to improve or get better."
    — Leonel Sosa [18:22]

4. Local Government and Infrastructure: Stalled Progress

• Federico Achawal (Mayor of Pilar):
  • Reports major infrastructure projects halted, including essential flood prevention works.
  • Quote:
    "Programs with allocated resources, like social programs and infrastructure projects have been discontinued or paralyzed."
    — Federico Achawal [09:08]
  • Highlights the decline in productivity, job losses, and underutilization in industrial parks, with knock-on effects for local economies.

5. Foreign Investment & Mining Boom

• Special Regime for Large Investments:
  • Government introduced incentives for $200M+ projects, spotlighting mining (copper, lithium) as a sector set for exponential growth.
  • Quote:
    "I can say that it's the best moment and we have to take advantage of this."
    — Roberto Caciola (President, Chamber of Mining Companies) [14:13]
  • Mining currently <0.6% of GDP—targeted to grow sixfold over the next decade.
  • Energy and mining investors remain optimistic due to favorable conditions and longer profit timelines.
• Other Investors Still Wary:
  • Many foreign CEOs “waiting” for currency and capital controls to lift before entering Argentina’s broader market.

6. Voices from the Ground: Mixed Feelings and Uncertainty

• Hiara Nagent (Financial Times Correspondent):
  • Observes “more stability” and less price chaos since Milei took office.
  • Many Argentines, though struggling, admit things are “better than expected” but worry about the stalling of economic momentum and low real wages.
  • Quote:
    "The stability is key for people."
    — Hiara Nagent [10:55]

---

Notable Quotes & Memorable Moments

• On Economic Shock and Sacrifice:
  "The sacrifice Argentines had to go through due to his policies of economic shock would not be in vain."
  — Natalio Cozoy [01:09]

• On the State of Manufacturing:
  "There was a big…recession… represented for us a lowdown of around 40% in our volumes…. very similar to what happened in the pandemic."
  — Javier Maltz [05:13]

• On Social Welfare Cuts:
  "The national government has already cut off that support because they don't believe in community dining halls."
  — Sandra [16:56]

• On Healthcare Access:
  "People are forced to choose which medication should I take, which one is key to keeping me alive."
  — Dr. Agata Fernandez [20:26]

• On Public Optimism & Skepticism:
  "We have the feeling in the market that things or volumes are recovering… the heart of an industrial person is always to be hoping things are going to be okay."
  — Javier Maltz [21:11]
  "To be honest... looking back at previous governments, I don't think things are going to improve or get better."
  — Leonel Sosa [18:22]

---

Important Segment Timestamps

• [01:09] - Introduction to Milei’s economic “shock therapy”
• [03:04] - Macroeconomic improvements and fiscal discipline
• [05:13] - Industry’s struggle: Javier Maltz details shutdowns and job-saving efforts
• [09:08] - Community impact: halted public projects and economic decline in Pilar (Mayor Achawal)
• [10:55] - Local perspective: Hiara Nagent on price stability and public sentiment
• [14:13] - Mining sector poised for a boom (Roberto Caciola)
• [16:56] - Social fallout: soup kitchens overwhelmed (Sandra, Merendero Sonrisas)
• [19:04] - Healthcare crisis from removal of price controls (Sandra, public patient)
• [20:26] - Difficult choices in medical care (Dr. Agata Fernandez)
• [21:11] - Hints of recovery and cautious hope (Javier Maltz)

---

Conclusion

The episode presents a nuanced picture of Argentina under Milei: While macro-level indicators like inflation and fiscal deficits show marked improvement, the brunt of the crisis is felt by ordinary citizens, public services, and domestic industry—raising important questions about the distribution of pain and the prospects for shared recovery. Business leaders, officials, and citizens alike await the next chapter with hope, skepticism, and deep uncertainty.

---

Transcript

[BBC Narrator]

This BBC podcast is supported by ads outside the uk.

[SAP Concur Representative]

Hey, let's talk about your expense report.

[Natalio Cozoy]

I didn't submit an expense report.

[SAP Concur Representative]

You will. Custom saddles and dog training services are not within policy.

[Natalio Cozoy]

What are you talking about?

[SAP Concur Representative]

SAP Concur uses advanced AI to audit and automatically detect out of policy expenses. It's the breakthrough I needed to focus more on our future.

[Natalio Cozoy]

These are my future expenses?

[SAP Concur Representative]

Yes. And self defense classes are out of policy.

[Natalio Cozoy]

I'll need self defense classes.

[SAP Concur Representative]

You will?

[Natalio Cozoy]

For what?

[SAP Concur Representative]

It's a big dog.

[Natalio Cozoy]

SAP Conc Concur helps your business move forward faster.

[BBC Narrator]

Learn [e-mail] at thebc we go further so you see clearer. With a subscription to BBC.com you get unlimited articles and videos, hundreds of ad free podcasts and the BBC News Channel streaming live 24. 7 from less than a dollar a week for your first year. Read, watch and listen to trusted independent journalism and storytelling. It all starts with a subscription to BBC.com. find out [e-mail] unlimited.

[Natalio Cozoy]

Hello and welcome to Business Daily from the BBC World Service. I'm Natalio Cozoy and today we are in Argentina looking at the economic impact of Javier Milei's first year as president. In this speech in December last year, marking the first anniversary of his government, Javier Milei said that the sacrifice Argentines had to go through due to his policies of economic shock would not be in vain.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

It's terrible, really awful. People are forced to choose which medication should I take, which one is key to keeping me alive.

[Javier Maltz]

We have the feeling in the market that things or volumes are recovering.

[Leonel Sosa]

To be honest, I'm an older person and from what I've seen over the years, looking back at previous governments, I don't think things are going to improve or get better.

[Natalio Cozoy]

The country is divided on how Javier Milei's government has fared so far. Is his stabilization of the economy an unquestionable success, or is its cost far too high? Is the burden of the shock evenly distributed or mainly shouldered by the most vulnerable? That's all coming up on this edition of Business Daily from the BBC World Service. The stringent fiscal policy Javier Milei is implementing in Argentina is closely followed around the world. He features on the COVID of the Economist and New Yorker magazines, and he's been praised by US President Donald Trump.

[Javier Maltz]

Javier, I'd like to congratulate you on.

[Natalio Cozoy]

The job you've done.

[Javier Maltz]

The job you've done is incredible. Make Argentina great again. You know Maga, He's a Maga person.

[Natalio Cozoy]

Some economic figures here are Indeed, looking good. Inflation, the country's main foe for years, has consistently slow down to less than 3% per month. Since he took power in December 2023, public accounts have been balanced and the financial markets have reacted positively to his policies. In a speech to mark the anniversary of his government's first year, Mr. Milei praised his own workuperacion cyclica.

[Unidentified Business Person / SAP Concur User]

The economy has entered a cyclical recovery that is pulling us out of the hole we were left in. But there's also the structural aspect. The 15% of GDP saved this year, which was previously squandered by political inefficiency, has been returned to the private sector. This will lead to an increase in both investment and consumption.

[Natalio Cozoy]

But things are far from being perfect. Official figures show that in the first six months of Mr. Milei's presidency, half of Argentines were poor and almost a fifth did not. And while primary sectors like mining and energy might be benefiting, other industries are struggling.

[Javier Maltz]

My name is Javier Mals. I am one of the owners of Grupo Estisol.

[Natalio Cozoy]

Estisol is a 60 year old company founded by Javier Malz's father. The firm is based in Buenos Aires and specializes in the production and distribution of expanded polystyrene based solutions. I met him at one of his plants to find out what he thinks of President Milei's policies.

[Javier Maltz]

We understand that Milei government did things that were very necessary because Argentina was spending much more money than as a family. Impossible to spend much more money what you can spend. So he worked very hard in that area.

[Natalio Cozoy]

Although he supports the government's spending cuts. Javier Maltz explains how the country entered a period of slowdown which directly affected his business.

[Javier Maltz]

There was a big, big, big, big recession in the first four, five, six months of Milei's administration that represented for us a lowdown of around 4, 40% in our volumes, which is very hard, very similar to what happened in the pandemic. So this was very hard. We tried to keep our people working, hoping that things would become a little bit better. So we tried not to fire people.

[Natalio Cozoy]

The impact of a shrinking manufacturing sector could be big. According to the left of center think tank Fundar, nearly a fifth of Argentina's jobs are in the industrial sector, that is 2.5 million employees. The industrial sector also represents more than half of the country's exports. And its activity generates additional economic growth by stimulating related industries, increasing income and encouraging further rounds of spending and investment. President Milei's government, with its libertarian stance, has pledged to open up the economy and is progressively doing so removing barriers to trade, particularly to importing goods from abroad. Javier Maltz says the way this is being done is not fair for local businesses.

[Javier Maltz]

The problem is when the government opens the market to any kind of finished product. And the conditions for the production in Argentina are completely different for a producer in China, in Brazil, in Mexico or in Eastern Europe.

[Natalio Cozoy]

Why?

[Javier Maltz]

Because we pay taxes that are not being paid abroad. The level of taxes we pay here because there is a sort of delay in the real value of the dollar. So now Argentina became very expensive in dollars. So if a year ago a worker was earning 500, $600, maybe now it's earning 1,000, $1,200 for the worker is still not enough. But for us as a producer, it's a very expensive salary. If we compare it with what happened in Brazil or what happened in Mexico, of course, what happened in China or in other places.

[Natalio Cozoy]

Javier Malze's company, Estisol, has plants in various parts of Argentina. One of those places is the municipality of Pilar, about an hour's drive north from the capital. Pilar, which covers a larger area than the city of Buenos Aires and has some 400,000 inhabitants, is full of contrasts. It boasts the largest industrial park in the country. It is home to some 70 gated communities for the well off. But close to 2/3 of Pilar's inhabitants are poor, according to official statistics. Federico Achawal is Pilar's mayor. He is from the opposition Peronist party. I met him in a large property with a castle like building on, constructed in the early 20th century to mimic the British architectural style of the time, surrounded by large parks. A public university will be built here, which Federico Achabal hopes will train future professionals to work in the local industrial sector. Before Javier Milei came to power, the federal government had committed its backing to the university. Something that is not at all clear will happen or will happen in full. Now.

[Federico Achawal]

Fundamentally, it's about the fact that programs with allocated resources, like social programs and infrastructure projects have been discontinued or paralyzed. And obviously this has caused significant harm to the residents of the district. To give you specific examples, there were two hydraulic works projects which took a long time to develop because they were essential to prevent flooding in communities of 15,000 and 7,000 people respectively. The projects had started, but they were halted and no one ever returned to continue them.

[Natalio Cozoy]

Have you also seen an impact from the recession that took place because of the measures that were taken by the central government?

[Federico Achawal]

To give you some perspective, Pilar's productive system accounts for approximately 20% of the province of Buenos Aires, exportable manufactured goods and between 4 to 6% at the national level, depending on various economic indicators. We're witnessing job losses and a decline in the productive capacity of Pilar's industrial park. For instance, installed capacity, which was above 60%, is now falling. This means less manufacturing, less production, and naturally reduced consumption in the economy.

[Natalio Cozoy]

Hiara Nagent is a correspondent for the Financial Times, covering the Southern cone region of South America. She arrived in Buenos Aires in June 2023. You arrived here and Milei was not yet in government. There was another government, a Paris government in place. When you go about Buenos Aires, where you live, what changes have you noticed, if anything, from what you've seen when you arrived here and what's going on now?

[Hiara Nagent]

I would say there was just this sense of chaos. It was mainly felt in inflation, which was going up and up and up every month, and therefore prices were accelerating faster and faster then. Since then, I would say it feels a lot more stable. It's starting to feel this sense of, you will know what things will cost in a month, or maybe it will have gone up a little bit, but it won't be too much. And when you speak to people, even people who didn't vote for Milei, I would say you ask them, are things better or worse than you expected them to be? This time last year, I have found in my conversations, most people have said better. They will then tell you, but things are kind of stuck. I was speaking to a butcher a few weeks ago and he said, the economy, they managed to stabilize things. It's much better than I expected. But now they need to get things moving again because we've kind of stopped at this fairly low level in terms of real wages, in terms of activity, there are signs that that is starting to kind of take off now. But the stability is key for people.

[Natalio Cozoy]

What do business people, not only in Argentina, but around the world, tell you when you talk to them about this government?

[Hiara Nagent]

When it comes to investors in the real economy, privately, most foreign CEOs will tell you that they are waiting. They're waiting to see if the government is able to lift Argentina's currency and capital controls, which prevent businesses from moving their money out of Argentina and are therefore a massive obstacle to foreign investment. I think the exception is energy and mining companies who have a kind of much longer timeline for when they expect to need to extract profits from Argentina.

[Natalio Cozoy]

This is Business Daily from the BBC World Service.

[BBC Narrator]

At the BBC, we go further, so you see clearer with a subscription to BBC.com, you get unlimited articles and videos, hundreds of ad free podcasts and the BBC News Channel streaming live 24. 7 from less than a dollar a week for your first year. Read, watch and listen to trusted independent journalism and storytelling. It all starts with a subscription to BBC.com find out [e-mail] unlimited.

[Natalio Cozoy]

I'm Natalio Cosoi and today we are in Argentina examining how President Xavier Milei's radical policies are reshaping the country's economy, businesses and the lives of its citizens. Among its policies, President Milei's libertarian administration introduced a special regime for large scale investments, offering highly favorable conditions for projects exceeding $200 million. This is especially beneficial for mining, which needs significant upfront capital and long term recovery periods. The Argentine Chamber of Mining Companies estimates copper mining could attract $21 billion in investments and generate up to 9 billion in annual exports. Lithium mining is also poised to receive $12 billion in investments by 2031. Roberto Caciola, the Chamber's president, shares this enthusiasm.

[Roberto Caciola]

I can say that it's the best moment and we have to take advantage of this. The government decided to put on the table new rules with an important regime to stimulate the investment in general terms, including the mining activity. And really it was a very good notice considering that Argentina has in this moment at least six big projects, world class projects of copper principally, in addition, a very strong activity in the case of the lithium. And really during the year there were some mergers between big companies to say just a case of BHP or Rio Tinto. They're coming back to Argentina in order to develop some important investment, not only in copper, but in lithium too.

[Natalio Cozoy]

How big is the mining sector for Argentina and how big can it become in terms of how much it represents of the country's GDP, for instance, really.

[Roberto Caciola]

The GDP, the participation of the mining activity in GDP is very, very low. Nowadays it's less than 0.6 points. Really. The expectation is that in 10 years the GDP at least could increase up to 4% of the GDP.

[Natalio Cozoy]

If big investors in areas such as mining are preparing for a windfall, others are experiencing the short end of the government's policies. Community organized support initiatives like soup kitchens had to withstand the national government's decision to stop sending them food. Back in Pilar, the Merendero Sonrisas Smiles Soup kitchen is an example of this. It has finished giving out meals and the women who work here are washing the dishes and cleaning up. Myrta Ramirez is one of them. She puts together a bag of food with rice, noodles, potatoes and other vegetables for A man who arrived too late to get a hot meal. She bids him farewell, hoping it will be enough for him to cook something. Myrta Ramirez says that the number of people eating in the soup kitchen increased almost fourfold last year. That happened while the support of the national government dwindled.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

The national government has already cut off that support because they don't believe in community dining halls. The dry goods like pasta, tomato puree, rice and other non perishable foods are no longer provided.

[Natalio Cozoy]

The government says that it decided to change the assistance model. It stopped using middleman groups, arguing that they profited from the system and used it for politics. And it began providing money instead of food. The government says this money is sent to around 4,200 kitchens in the country. But many, like Mirta Ramirez Soup Kitchen were excluded, despite having applied to continue receiving support. All this is happening at a time of greater need within communities.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

As for the people, we're seeing quite a few older adults coming here, pensioners, because they can't make it to the end of the month. So they come here seeking help.

[Natalio Cozoy]

One of them is Leonel Sosa, who is 70 years old. How often do you come here?

[Leonel Sosa]

Well, I come to the dining hall on the days when there's dinner, Mondays, Wednesdays and Fridays and for the tea service on Tuesdays and Thursdays.

[Natalio Cozoy]

He does not feel particularly optimistic about the future.

[Leonel Sosa]

To be honest, I'm an older person and from what I've seen over the years, looking back at previous governments, I don't think things are going to improve or get better.

[Natalio Cozoy]

Milei removed price controls immediately after taking office, including those regulating private healthcare costs. This policy shift caused a sharp rise in monthly healthcare premiums throughout last year. With fees trebling in some cases, those who couldn't pay had to start relying on the public health care system, further straining its resources.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

I used to pay 50,000 pesos and now it's gone up to around 120,000.

[Natalio Cozoy]

This is Sandra. She is 54 years old and sitting in a wheelchair, pushed by her daughter. Sandra has been diagnosed with a progressive neurodegenerative disease in Pilar's central hospital. She explains that after the fee of her private health insurance doubled, she had to leave.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

I had to stop paying it because I simply couldn't afford it anymore. It really worried me because given my current health condition, I needed that private health insurance, but I couldn't keep it, of course. It got me down.

[Natalio Cozoy]

Sandra is seeing Dr. Agata Fernandez, who is in charge of the Walk in clinic and ER Department of Pilars Central Hospital.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

Obviously, in this context, the number of patients coming to our facilities has increased.

[Natalio Cozoy]

A hospital has enough resources to cope, but it's not the same everywhere. Do you think in the other places you worked in the past, in the public sector, we'd be coping the same way?

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

No, I think they have it much harder now.

[Natalio Cozoy]

The price rises have also affected patients access to medicine. That's particularly worrying for Dr. Fernandes.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

It's terrible, really awful. People are forced to which medication should I take? Which one carries the least risk to my life? Should I take the lipid lowering drug or the antihypertensive? Which one is key to keeping me alive?

[Natalio Cozoy]

Since Javier Milei came to power, macroeconomic variables have improved, but the lives of the vulnerable have worsened. The government hopes lowering inflation and keeping a strict fiscal policy will also improve the people's lives. Preliminary data show a drop in poverty and thus hope for economic growth. Back in Javier Malzit's factory, he shares his optimistic outlook.

[Javier Maltz]

We have the feeling in the market that things or volumes are recovering and if inflation continues to go down, consumption of many products and also the building or construction market will start having a more interesting demand. The heart of an industrial person is always to be hoping things are going to be okay. So until you don't have the rain inside your bedroom, you believe that this thing is not going to happen. So I believe most of the people. I cannot say everybody. Most of the people. Of course there are cases, but most of the people are trying to keep the production and try to keep the people working for companies with the hope that things will be okay.

[Natalio Cozoy]

That's it. From this edition of Business Daily from the BBC World Service with me, Natalio Cozoy in Argentina. Thank you for listening.

[SAP Concur Representative]

Hey, Ryan. That was a fast trip. It was like you teleported.

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

Yeah, just got in.

[Unidentified Business Person / SAP Concur User]

I'll get all my expenses logged, I promise.

[SAP Concur Representative]

Oh, no, you're okay. SAP Concur uses advanced AI, so you're expense report will practically write itself. Quite the breakthrough. It's like we've been teleported into the future. All right, so just curious, would you give us written permission to convert your matter into energy patterns and reassemble you at, say, random travel destinations?

[Roberto Caciola]

Margaret, are you building a teleporter?

[Sandra / Dr. Agata Fernandez / Leonel Sosa (various vulnerable individuals)]

No.

[BBC Narrator]

Yes, SAP Concur helps your business move forward faster.

[Natalio Cozoy]

Learn [e-mail].