The Chainsaw Massacre: Hailed and Reviled for His Deep Cuts, Argentina’s Leader Faces the Axe
NEED TO KNOW
The Chainsaw Massacre: Hailed and Reviled for His Deep Cuts, Argentina’s Leader Faces the Axe
ARGENTINA
Every week, seniors like Gabriela hit the streets of Buenos Aires to protest President Javier Milei’s cuts to government, spending freezes, and other austerity measures he has imposed to bring down Argentina’s debt and inflation and put the country’s economic house in order.
They do so because their low pensions and high inflation mean they struggle to survive, they say. Sometimes, youngsters come, too, to protect them from riot police. Scenes such as these where frail octogenarians are manhandled by police officers in full riot gear don’t go down so well with the public, which is highly sympathetic to the protesters’ plight.
“We have worked all our lives and have fought for our rights, and on top of that, they beat us,” Gabriela, a retiree, told the Associated Press. “They want us to die.”
More than a year into Milei’s term, many Argentines across the generations are struggling. The poverty rate increased 11 percent in mid-2024 to a two-decade high of 53 percent, before falling recently to 38 percent.
Seniors have been especially hit hard: Some of the biggest savings for the government came from holding down the real value of pensions. The average minimum monthly pension is just $300, and it has lost 22 percent of its purchasing power over the past year. As a result, it buys very little these days because of how expensive Argentina has become, with consumer spending falling 20 percent over the past year.
Even so, economists and business folks say the tough medicine of the self-declared “anarcho-capitalist” who rode to power in 2023 promising to “blow up” the central bank, punish elites, axe a bloated government, and defeat sky-high inflation is working.
Argentina’s monthly inflation rate dropped from 25.5 percent in December 2023 to 2.7 percent in October 2024. In annual terms, that means an inflation rate of 211 percent in 2023, one of the highest in the world, fell to 66 percent a year later.
Also, bonds have rallied, economic growth has inched upward after multiple contractions, and the country has seen its first budget surplus in 14 years.
Meanwhile, Milei’s approval rates have not bottomed out. Argentines may not like the bitter medicine, but they like its effect, analysts say, adding that many Argentines blame previous administrations for the high poverty rate.
“He managed to persuade the people that traditional politicians are a corrupt class (who) seek to preserve their privileges at the expense of the people, and that traditional parties are responsible for all their problems,” Julio Montero of the University of San Andrés in Argentina told the Guardian. “So in spite of the economic crisis, many people see Milei as a messiah that is here to protect and represent them.”
In fact, his economic measures have made such a difference that the International Monetary Fund (IMF) recently granted Argentina, which owes it more than $40 billion, another loan of $20 billion. Also, the World Bank recently announced a $12 billion support package for Argentina, and the Inter-American Development Bank said it will provide up to $10 billion in financing for the public and private sectors.
The irony here, says World Politics Review, is that while most nations reluctantly impose strong austerity measures as a result of IMF conditions, Milei has gone even further than the lender would have asked, and ahead of the loan.
“The International Monetary Fund has never dealt with a leader like Javier Milei: Argentina’s president has flipped the script on the international organization that is the lender of last resort for countries in crisis,” it wrote. “Usually, the IMF demands economic reforms and budget cuts. However, as it currently negotiates with its largest debtor, the IMF faces a country and a leader engaging in radical reforms that are moving faster than seems safe politically or economically.”
Now, Milei is promising more pain.
He lifted capital and currency controls this week to boost investment and growth, which could spike inflation again – already it has inched up slightly over the past two months, Reuters wrote.
He told the public he wants another round of budget cuts.
Unions and other protesters are still protesting the last round. Last week, they brought the country to a halt in a 24-hour strike to protest his “chainsaw” austerity measures. It was the third general strike in Milei’s 16-month-old presidency.
The demonstrators say the cuts he has made to the government and to social spending over the past year go too far: He has slashed subsidies for transport, fuel, and energy that have increased electricity and gas prices by 430 percent. He has fired tens of thousands of public servants and shuttered entire government departments, causing a 5 percent spike in unemployment. He has also imposed wage and pension freezes below inflation. The pause on infrastructure projects has led to a 29 percent contraction of that sector.
While economists hail his approach, politically, the president is “going through his toughest moments of his short but remarkable career yet,” wrote Juan Pablo Ferrero, of the University of Bath in The Conversation.
In addition to regular and relentless protests, he’s facing pushback from Congress and calls for his impeachment. For example, earlier this month, the Senate rejected the two Supreme Court candidates he nominated by decree earlier this year, dealing a major blow to the president – he was hoping to fill the Supreme Court vacancies with appointees who would rule favorably on challenges to his economic reforms.
He’s also facing a cryptocurrency scandal known as “cryptogate” involving a highly speculative meme coin and his brief promotion of it before its value collapsed within hours of its launch. He’s now under investigation in corruption probes by the Office of Anti-Corruption, Congress, and a judge, as well as legal complaints of fraud.
He denies the charges, calling them politically motivated.
Meanwhile, his approval ratings are also falling – from 54 percent approval in November to 43 percent in February, according to Americas Society/Council of the Americas.
Still, in an interview with the Economist late last year, he pledged to stay the course, no matter how tough things get for his presidency or his people.
Faced with impending disaster, swift and decisive action was the only way forward, he said.
“Nobody can be surprised by what I am doing, because I promised it in my campaign,” he added. “And I am doing it.”
THE WORLD, BRIEFLY
Serbia Gets New Government, Leader Dangles New Elections
SERBIA
Serbia appointed a new government headed by political newcomer Đuro Macut as the country’s new prime minister, after the former administration was brought down by mass anti-government protests, with the country’s President Aleksandar Vučić floating new elections in June, Politico reported.
On Wednesday, lawmakers allied with Vučić’s populist Serbian Progressive Party (SNS) backed Macut, a renowned endocrinologist and academic, and the new cabinet, following the resignation of his predecessor, Miloš Vučević, in January, Radio Free Europe reported.
Handpicked by Vučić, the parliamentary vote was seen as a formality: The president’s SNS party and its allies dominate the legislature.
In his inaugural address, Macut said his administration would seek to end the protests, adding that Serbia was “tired of division and blockades,” while calling for dialogue with demonstrators.
He added that Belgrade would maintain its balancing act between pursuing its European Union membership, while also reserving strong ties with China, a key investor, long-time ally, Russia, as well as the United States.
Serbia has been grappling with mass student-led anti-government protests for months. Demonstrators were initially demanding accountability for the deaths of 16 people in the collapse of a railway station canopy in the northern city of Novi Sad in November.
However, the demonstrations quickly evolved into a broader movement against corruption and Vučić, who has governed Serbia since 2017.
The unrest prompted the former prime minister, Vučević, to resign.
While some analysts have suggested that Macut could serve as a “credible interlocutor” with the demonstrators, others say the new government is a reconstitution of Vučević’s administration and “unlikely to ease public tensions.”
Foreigners Banned From Ghana’s Internal Gold Market
GHANA
Ghana is moving to expel foreigners from its local gold trading market by the end of the month to simplify gold purchases from small-scale miners, boost revenue, curb smuggling, and boost the enforcement of environmental regulations, Reuters reported.
The move by Africa’s leading gold producer follows the passage of a new law earlier this month that gave exclusive authority over gold mining to the Ghana Gold Board (GoldBod), according to the BBC.
For years, the West African country has struggled to contain illegal gold mining, known locally as “galamsey.” With this new system, it hopes to eliminate a channel that has allowed licensed local and foreign companies to buy and export gold directly from artisanal and small-scale miners. Starting in May, GoldBod will be the only entity allowed to buy, sell, assay, and export artisanal gold.
Still, foreign entities will be allowed to buy gold directly from GoldBod.
Part of the impetus for the new rules is that the mineral-rich country has been grappling with high inflation and unemployment, and currency instability. Officials hope the new system will provide a remedy.
Meanwhile, Ghana has also been struggling with environmental pollution caused by illegal mining. The new system is considered the first concrete step by the new administration of President John Mahama to bring that under control.
“It sends a strong message to foreign actors – especially Chinese operatives – who have circumvented local laws for years,” Nana Asante Krobea, a mining governance consultant, told Agence France-Presse. “If properly applied, the new law could bolster government revenue and bring some order to the chaos in the gold sector.”
Gold prices last week were up to over $3,200 per ounce. The ongoing trade war between the US and China has generated uncertainty and shaken global markets, pushing investors toward gold, traditionally considered a financial refuge during times of economic and geopolitical turmoil.
A ‘Dream’ Fulfilled: Tuvalu Gets Its First ATMs
TUVALU
Tuvalu, a nation of nine small islands in the South Pacific, got its first-ever ATM machines this week, celebrating the new arrivals in a joyous ceremony attended by traditional leaders, government, business officials, and the public, the BBC reported.
“These were dreams for us,” Prime Minister Feleti Teo said, according to the Guardian, adding that the day was “momentous” and “historic.”
The first ATM was unveiled at the headquarters of the National Bank of Tuvalu in the village of Vaiaku on Funafuti, the main island, where the ceremony took place on Tuesday.
So far, five machines and 30 sales terminals have been installed on Funafuti, including at the airport. These and other banking improvements will give the country’s 11,000 residents access to electronic banking for the first time.
Until now, all banking in Tuvalu has been done in cash, with workers lining up at banks to collect their salaries in notes. Stores, meanwhile, only accepted cash – until now.
Now, locals hope the new system will ease congestion, reduce cash dependence, expand financial access in the outer islands, and lead to increased economic empowerment.
Teo said that the process of getting the ATMs was expensive but that “with sheer determination,” they were able to provide residents with this new convenience.
At the moment, the ATMs only accept prepaid cards, but the bank plans to introduce Tuvalu-issued debit cards next, and eventually Visa debit and credit cards that can be used for online shopping and travel.
According to Teo, the service is free for now. Fees may come later, he added.
DISCOVERIES
Stone Age Sailing
Scientists found the first clear genetic evidence of contact between early European and North African populations.
A new study of the DNA from the bones and teeth of nine people who lived between 6,000 and 10,000 years ago in the eastern Maghreb – modern-day Tunisia and Algeria – found the 8,500-year-old remains of one ancient human who shared about six percent of his DNA with European hunter-gatherers.
This suggests that European hunter-gatherers might have reached North Africa on long wooden canoes about 8,500 years ago, and the two populations likely interacted more than previously thought, explained Live Science.
While some biological anthropologists advanced this theory years ago based on the morphological analysis of skeletal traits, the theory was considered highly speculative, explained study co-author Ron Pinhasi.
“Thirty years later, our new genomic data has validated these early hypotheses,” he said in a statement. “This is really exciting.”
The Stone Age is associated with the use of stone tools that began approximately three million years ago – before modern humans existed – and ended around 5,000 years ago, when early humans started using metal tools. At the time, humans in Europe and North Africa mostly lived as hunter-gatherers and gradually transitioned to farming and complex societies in the Neolithic, approximately between 10,000 and 2,000 BC.
Until now, archaeologists didn’t have much information on how the transition to farming took place in modern-day North Africa and most of their data came from sites in the Western Maghreb – modern-day Morocco.
“There’s not been much of a North African story,” study co-author David Reich told Nature. “It was a huge hole.”
Previous research showed that early humans in Western Maghreb had high levels of European farmer ancestry – genetically different from hunter-gatherers – because of the movement of farmers via the Gibraltar Strait about 7,000 years ago.
According to the new study, early humans in Eastern Maghreb had minimal European farmer ancestry and mostly remained genetically isolated, apart from some earlier European hunter-gatherer influences.
This suggests that Eastern Maghreb was genetically and culturally more resilient compared with Western Maghreb, in line with previous studies showing that farming was only fully adopted in Eastern Maghreb after 1,000 BC.