Milei and the risk of a value that can become a cost

Javier Milei, Argentina’s president, faces growing internal divisions within his coalition as uncertainty mounts over whether his economic reforms will deliver tangible results. The political landscape has shifted significantly since his election victory in late 2023, with some allies beginning to question the long-term viability of his policies and their impact on the country's stability. The situation arises amid complex negotiations shaping Argentina’s political future, where each participant seeks to secure power through alliances or disagreements, backed by national funds or without them. These actors are not bound by shared party affiliations or ideological identities but are united by the need to preserve their influence. Milei has narrowed his re-election strategy to the economic achievements of his administration, emphasizing that outcomes should speak for themselves. However, the reality of substantial macroeconomic transformation could now appear stalled, generating doubt about the direction of the nation. Many of these stakeholders initially believed it was necessary to make considerable individual and collective efforts to bring the economy under the basic rules of capitalism and public resource management. Some have since regretted this path, while others remain uncertain and begin demanding visible results from the effort. A third group continues to support Milei’s vision despite the challenges. Leaders who were once eager to form alliances with the president have started to waver. This division among the majority that brought Milei to power in the second round of the 2023 elections introduces tension and uncertainty into the upcoming electoral campaign. Libertarians had hoped to eliminate such uncertainties after their success against the kirchnerismo faction in last year’s parliamentary elections. In this difficult period for the government, major urban centers in Argentina face declining incomes and employment rates, with little hope of improvement soon. Despite this, Milei retains more than a third of public support according to most polls, which is more than many candidates would dream of having a year before the elections. Yet, it falls far short of ensuring re-election based solely on a decisive economic shift. The delay in realizing the benefits of this transformation has undermined Milei’s position, creating a cycle of distrust among economic actors. This new dynamic sees governors and political leaders who were previously desperate to align with the president now questioning whether that path offers the safest route to maintain their positions ahead of provincial elections. This cooling off became evident in the difficulties faced by government officials attempting to alter electoral rules, starting with efforts to eliminate or suspend the Open, Simultaneous, and Mandatory Primary Elections (PASO). In exchange for this vote, governors demand payment of overdue debts, fresh funding, and projects exceeding those agreed upon during the winter for passing the labor reform law. At that time, the officialist triumph in mid-term elections still carried weight. Karina Milei’s attempt to secure subordination, alignment, and promises of support for re-election as part of an agreement to approve electoral changes has met resistance from negotiators. They no longer pledge support for next year. In a game of concealment and pressure, none wish to concede more than they are willing to give. From enthusiasm to a cooling of relations among allied governors, the perceived value of remaining tied to Milei is diminishing. At the start of the year, it was crucial for many provincial leaders to align with Milei’s agenda. Now, however, the balance of power appears to be shifting, with potential consequences for both the president’s re-election prospects and the broader political landscape in Argentina.