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President Milei, who raised various concerns with his chainsaw performance during the last Argentine presidential election, marked his 100th day in office yesterday. After hinting once again at a reduction in civil servants just three months into his term, anti-government protests broke out in Buenos Aires.
On the day of his 100-day commemorative address, President Milei brought out the civil servant restructuring card once more at Casa Rosada—the Argentine presidential office—saying, “We are still lacking.” As a result, Argentina’s 18 ministries have been reduced to 8, and strong opposition from public-sector unions is expected.
In fact, this is not President Milei’s first radical reform.
One week after taking office, President Milei shocked the market by devaluing the peso from 400 to 800.
With the sharp fall in the peso’s value, the inflation index soared by roughly 20% each month. Argentina’s Ministry of Economy explained, “We did not lower the value of the peso; it merely returned to its proper value,” but public outrage erupted over skyrocketing prices.
And that was not all.
By his fourth week in office, President Milei issued the emergency order known as the “Mega Decree,” immediately abolishing some 300 regulations in the corporate, labor, and rental markets. As prices surged and even the housing market fell into chaos, anti-government protesters poured into the streets of Buenos Aires.
However, the Milei administration states that it will further accelerate restructuring.
After the discussion at Casa Rosada that day, when a reporter pointed out that “the poverty and unemployment rates among the people are severe,” he responded sharply, saying, “Don’t complain to me. Complain to Perón.” It was another attack on “Peronism,” which has dominated Argentine society for the past 70 years.
Not stopping there, President Milei suggested that he would “continue peso devaluation and civil servant restructuring until the central government can no longer intervene in the exchange rate.” This signaled his determination to continue cutting government spending and further lowering the value of the peso.
Although such authoritarian moves have raised many concerns, many experts are saying, “The economy has succeeded.”
That is because, through steep austerity and ultra-high-intensity restructuring, Argentina’s fiscal balance has turned to a surplus for the first time in 123 years.
On the occasion of President Milei’s 100th day in office, the IMF Western Hemisphere Department director, who visited Casa Rosada, praised President Milei, saying, “I glimpsed his sincerity.”
The Western Hemisphere Department director called it “a painful path, but one that must ultimately be taken,” and responded very positively to the loan issue currently being negotiated with the Argentine government. Accordingly, there are projections that the recent loan worth around 3 billion may be increased further.
Meanwhile, it has emerged that the biggest beneficiary of Argentina’s successful structural reform is NPS Korea, the Korean pension fund.
Around the time of President Milei’s inauguration, the pension fund made investments worth roughly 10 trillion won, drawing concern from various circles. Recently, however, the MERVAL index rose to 1.5 million points, producing a record investment windfall.
An anonymous pension fund official said, “The pension fund recognized Argentina’s potential early among emerging markets,” adding, “If the promised IMF loan is confirmed, that potential will grow even larger.”
In fact, the pension fund’s recent windfall was not limited to this.
As global stock markets began to recover after the Russia-Ukraine war, the pension fund’s investment management return was tallied at around 30%. Even taking last year’s -7% return into account, this was the largest increase, and among global sovereign wealth funds, it ranked as one of the fastest recoveries.
Many citizens continue to watch with interest to see just how high the pension fund’s management returns can climb.
Meanwhile, on this day, the National Assembly said, “As expected, all the pension fund needs to do is invest well,” and decided to put the bill scheduled for this week before the plenary session.
With little disagreement between the ruling and opposition parties, the reform plan to “pay more and receive more” is expected to pass without difficulty.
More details...
*
-Hey, hey, National Pension Service, it’s you guys again?
-Damn it, I believed in you!
-Let’s do well together! Let’s always smile! Congratulations on the pension fund’s investment jackpot and the National Assembly’s passage of the pension amendment! ^ㅡㅡ^!
Javier Milei... he was a man who did what he said he would do.
The civil servant restructuring carried out on his 100th day in office once again made the Argentine people scream.
When a drug addict of 70 years tries to quit overnight, side effects are inevitable. But the withdrawal symptoms that seemed as if they would go on forever did not last very long.
As the government’s finances turned to a surplus for the first time in 123 years, inflation, which had soared to 250%, quickly fell to single digits.
To be more precise.
Based on this fiscal surplus, the IMF provided a loan of approximately 5 billion dollars, and with the abolition of some 300 corporate regulations, global capital gathered. As “dollars” were transfused back in like this, the rise in prices was sharply curbed.
As the people’s screams grew louder, the Argentine stock market was growing at a pace unprecedented on Earth... It seemed growth and distribution really were difficult to coexist.
Currently, Argentina was enduring an economic cold wave roughly 50 times stronger than Korea’s 1997 IMF crisis.
-I believed in you! National Pension Service! Hahaha.
Thanks to that, the pension fund’s Argentine assets tripled in just three months, recording a massive profit. Not only in Argentina, but due to the favorable global stock market as well, projections were emerging that the pension fund’s expected return would reach 30%.
However, it seemed this was interpreted in political circles as “bad hope.”
One day, when Argentina’s stock market had gone all the way to Pluto, the National Assembly passed the Pension Act amendment by unanimous agreement between the ruling and opposition parties.
-Of the 284 incumbent lawmakers, 280 have voted in favor... With this, I declare the Pension Act amendment passed. Bang, bang, bang!
It was strange.
Did they not know what kind of screams Argentina was letting out right now? In fact, the National Pension Fund was about 30 years away from depletion, but the teachers’ pension, military pension, and civil servant pension were already running deficits. Those shortfalls were being filled with taxes.
-Er... With this, our citizens’ later years have become a little safer, yes. That is how I assess it. Going forward, our National Assembly will listen even more closely to the people’s will.
A bitter smile came to my lips.
It seemed the miracle that if I simply did my duty in my place, the national economy would surely improve as well... was not going to happen.
*
“Huh huh... Argentina... huh huh.”
Division Head Park Seongcheol gave a laugh of disbelief as he looked at the MERVAL index, which had grown explosively.
“This really makes me feel what the new normal era is. At this rate, will Argentina become a developed country again before I die? Huh huh.”
“Indeed. Japan’s economy keeps treading water, and Argentina is growing like that... Kuznets’s classification might end up being reversed.”
Kuznets, the 1971 Nobel laureate, classified the global economic model into four categories: developed countries, underdeveloped countries, Argentina, and Japan.
He had pointed to Argentina as the only country in the world to go from developed to underdeveloped, and Japan as the only country in the world to go from underdeveloped to developed. But with the arrival of the new normal era, his analysis was flowing in the exact opposite direction.
“What’s the outlook for the Argentine stock market going forward?”
“For now, the assessment is that they’ve passed the major hurdle. Milei keeps throwing out absurd reform plans, but his approval rating is more solid than expected.”
“Even so, they’ll need to find another business to feed on, won’t they? Their industrial structure is far too skewed toward natural resources.”
“Most rating agencies are saying the same thing. Putting out the urgent fire isn’t the end of it. However, considering Argentina’s unique economic structure, the majority view is that as long as they don’t recklessly hand out welfare, they’ll do better than average.”
The majesty of a resource-rich nation was truly remarkable.
Argentina’s economic growth rate for next year was expected to be in the 6% range simply because it pledged to “live frugally from now on.” That figure was twice the Latin American average, three times Korea’s, and six times Europe’s.
“Some rating agencies are predicting that Argentina has greater potential than Saudi Arabia. They say the global community may try to replace oil, but it does not try to replace food.”
“I’m jealous. So, what about our assets? How much profit have we recorded?”
Director Choi’s lips twitched as he held out the portfolio.
“We’ve recovered our principal. After the IMF announced the loan, the stock market rose again. Our Argentine assets are currently up about threefold, but from a risk management standpoint, we’ve gradually liquidated 30%, and we’ve decided to watch the rest.”
“The stock market tripled in just three months after he took office... Does that number even make sense?”
In truth, it was not threefold.
Before Milei, the chainsaw-cutting demon, appeared, the MERVAL index had been around 200,000. Now it had soared roughly sevenfold. Even calculated in dollar terms, it was several times higher.
It was unbelievable.
Even if a stock market grew by just 70% in a year, people would call it a super-super-super jackpot, yet it had risen by around 700%... These were numbers hard to see even with a tenfold leveraged futures and options investment.
“At any rate, that stubborn bastard always proves himself right. I can’t believe he was right again this time.”
“Yes. In fact, Argentina is only one of the side profits. Our pension fund has made far more money from the Nasdaq.”
“That was his idea too, to buy at the bottom, wasn’t it?”
“That’s right. The stocks we swept up when the Nasdaq was at 10,000 points have now surged to 16,000.”
Director Choi could not contain his excitement.
Thanks to this guy, the pension fund’s return for this year was expected to be around 30%. This was the most overwhelming figure among global sovereign wealth funds, and more than four times the pension fund’s average annual return. Thanks to that, even the citizens who had glared at the pension fund as if they wanted to kill it after it achieved -7% were now sending plenty of praise.
But unlike Director Choi, whose hips were practically wriggling, the division head’s face was only bitter.
“I see. Very good. Very good indeed.”
With those words, he quietly put down the paper.
“Director Choi, I think I have to ask you for a difficult favor.”
“Yes?”
“I’m sorry to bring this up so suddenly, but within a month, I need to put my affairs in order. Not just me—the head of support, the head of strategy, and the chief investment officer will probably have to take off their clothes as well. You’ll have to handle the personnel cleanup.”
“Wh-what are you talking about, Division Head?”
“I knew power was frightening, but I didn’t know it was this merciless. I spoke a few honest words, and now not only me, but even the people who agreed with me are being buried alive alongside me.”
Director Choi immediately understood what was going on.
The support and strategy departments were the people who had handled government relations together with the division head, and they had clearly expressed opposition to the pension amendment.
Recently, as the pension fund showed a high rate of return, they had been raising the level of their remarks little by little.
But the price for that came not as acceptance of their views, but as burial alongside him.