Mile’s “Electric Saw Reform Pain”
Nearly two decades after President Mile implemented the “electric saw-like reforms,” Argentina experienced a cliff-hanging drop in inflation: the monthly inflation rate plummeted from 25.5% at the end of 2023 to 1.5% in May 2025, marking the lowest level in five years. The Mile administration sees this change as a significant victory in its aggressive economic policies.
On June 2025, with good news on the horizon, the president and Minister of Economy, Luis Caputo, engaged in a heartfelt praise for each other. Caputo declared on social media, “We have the best president in the world.” While visiting Europe, Mile immediately responded, lauding Caputo as “the best economic minister in Argentine history.”
However, behind these impressive economic figures lies a reality that is tearing apart. In the first year of Mile’s presidency, despite a significant drop in inflation and Argentina achieving a budget surplus for the first time in 14 years, life for the people has become increasingly difficult. By the end of 2024, the poverty rate in Argentina had risen to 53%, and the real purchasing power of minimum wage had shrunk by 28%, marking the largest decline since the financial crisis in 2001.
A greater political crisis is approaching. In July 2025, just three months before the midterm elections, Mile confronted cameras at the presidential palace, furiously accusing Vice President Victoria Villarreal of being a “traitor,” shattering the last vestiges of the ruling coalition.
The spark for this public split was an act of pension increase passed by the Senate with a high vote count. The bill required a 7.2% increase in retirement benefits, strongly opposed by Mile, who was overseeing the vote himself. With 52 votes in favor and zero against, the bill was passed overwhelmingly. This became a landmark event in the open conflict within the Mile government.
Facing the impending midterm elections, Mile, self-proclaimed “anarchist capitalists,” is facing an unavoidable political test.
Argentina’s President, Michel Teodoro, in his office at the presidential palace in Buenos Aires, Argentina, in 2024, received an exclusive interview with The New Yorker magazine. The “electric-razor president,” known for his tireless efforts, slightly rubbed his head in exhaustion: “My hair is turning white, and my scalp is getting thinner.” He shared that he had been working from dawn to midnight almost every day since taking office a year ago.
Compared to his first days in office, Michel Teodoro has undergone some changes. At that time, his hair was wildly unruly and styled as a lion’s mane, earning him the nickname of “Lion” from his supporters. He held up an electric razor symbolizing freedom, vowing to transform Argentina into a country where “the government no longer controls people’s lives.” He pledged to cut national expenses, eliminate redundancies, and show “zero tolerance” towards criminals.
“Besides shock, there is no other option,” he declared in his inaugural speech, a phrase quickly spreading across the nation. At that time, Argentina’s annual inflation rate soared to 211.4%, its fiscal deficit accounted for 4.6% of GDP, and the country’s credit rating was precariously low. He announced 2024 as the “Year of Economic Reconstruction,” subsequently launching a series of unprecedented structural reforms.
Carlos Jelvason, a political science professor at the University of Buenos Aires, Storo Quattrito, analyzed to China Newsweek that Michel Teodoro primarily utilized two “tools”: the “electric razor” (reducing government positions and expenses) and the “mixer” (controlling wages, social security, and pensions to keep their growth below inflation, thereby reducing real costs).
The initial round of reforms targeted state institutions. Michel Teodoro reduced the federal government from 26 departments to 9, eliminating approximately 35,000 civil servants, cutting by 7%. Public projects were completely halted, energy subsidies significantly reduced, and local fiscal allocations were directly slashed.
Under the strong austerity policies, Argentina achieved a fiscal surplus of 0.1% of its Gross Domestic Product (GDP) in 2024, turning around the deficit situation previously faced. Supporters of Milé have hailed this as an “economic miracle.”
Faced with external criticism, Milé has repeatedly and openly expressed his firm stance in public: “They say our reforms will fail, that inflation will surge to 300%. Now they can only grit their teeth and admit they were wrong.”
On December 2024, on the occasion of his first year in office, Milé delivered a national speech, proclaiming “reform has just begun.” He announced the entry into a “deep saw” phase, planning to dissolve or restructure at least 60 state institutions without parliamentary approval through the President’s exclusive “necessity and urgency decree” (DNU). This round of reform was led by Federico Stussing, Minister of Regulatory Reduction and National Transformation, targeting the remaining bureaucratic system from the previous round.
In fact, the reforms advocated by Milé are closely related to the “Hojalaska Act,” which had been shelved due to unapproval. The core logic of these reforms is to eliminate all laws and institutions deemed “systemic redundancies,” regardless of their establishment background or adherence to the “small government” principle.
However, under pressure from opposition parties and academic circles, universities, congresses, and judicial systems still enjoy relative independence; strategic institutions such as the National Research Council, National Medicines Authority, and National Communications Agency were temporarily excluded from the list of those to be abolished. In response, Milé frankly stated: “If I had time, I would even cut these.”
In February 2025, during a media interview, Milé reiterated his stance: “Reform will not slow down.” He cited Elon Musk’s strategy after acquiring social media platform Twitter, stating, “We need to list all resources used by each institution, and then cancel the rest.”
Milé’s “saw-like” reforms have also won applause from some quarters.
Benjamin Gerdan, the head of Latin American affairs at the Wilson Center in the United States, commented that Miley is seen as an anti-inflation wizard in the US, “the one who can restore order to the chaotic Argentine economy.”
At the beginning of 2025, Miley was featured on the cover of Time magazine alongside US President Trump and World Trade Organization Director General Oxfam-Ivellala. Miley then excitedly posted on social media: “Freedom forever!”
35-year-old Biallo Gurski, a communications teacher, teaches twelve hours a day at a professional school in Buenos Aires’ suburbs, often going hungry until late at night just to save money. “On the 15th of every month, I have no money left; I have to ask my mother for food,” he said. His monthly salary was at its best only $450, with expenses including commuting and $270 rent leaving him with little savings.
In the economic miracle promoted by Miley, Biallo Gurski’s plight is not unique. A sharp reduction in public spending, freezes on salaries, and soaring living costs are pushing more people into similar dilemmas. Budgets for education, healthcare, social security, and other livelihood sectors have been significantly cut, while prices for basic services such as water, electricity, and gas have skyrocketed.
In La Nuestra, south of Buenos Aires, a woman who makes her living from recycling waste admitted that her breakfast expenses had surged from 1,400 bolivars (about 7.89 RMB) to 5,900 bolivars (about 33.23 RMB), “Now a slice of toast is more expensive than two meals in the past.” She lamented, “Before, 10,000 bolivars could buy two pizzas, now even 18,000 bolivars is not enough.”
Claudio, 57, works as a security guard in a business in Buenos Aires and used to be able to take his family abroad for vacations. Now, he worries about the rising water and electricity bills and rent. He has had to sell his car because fuel costs, parking fees, and insurance have already exceeded his budget.
Education and healthcare systems have been significantly undermined. In October 2024, more than a hundred thousand university students and faculty members took to the streets of Buenos Aires to protest against the government’s budget cuts for higher education. The government’s health budget was reduced by 20%, and special expenditures for chronic diseases plummeted by 60%, leaving many patients facing difficult choices between eating or buying medication. The sharp contraction in the social welfare system has made life even harder for vulnerable groups.
The Institute for Social and Economic Studies (ISETE) also pointed out in a research report: “Despite some macroeconomic improvements in Argentina, the reality on the ground is concerning.” The report revealed that over half of the surveyed families were unable to afford basic food expenses; nearly ninety percent of households relied on credit cards, loans, or state aid to sustain their livelihood.
“The most pressing challenge at present is to rebuild the actual income and purchasing power of families. Social recovery must be achieved simultaneously with price stability,” the report stated.
In May 2025, outside the Social Security Office in Buenos Aires, 76-year-old retired man Ruben Cokululo angrily questioned: “Our days are already tough, and now they’ve gotten worse. Are they trying to kill us?”
“This is Argentina. The country is still struggling,” said Juan Ignacio Caranza, an independent consulting firm Aurora analyst. However, he also noted that despite significant societal pressure, Milé’s support rate remained around 50%. “He (Milé) is using economic indicators to gain social acceptance, but we don’t know how long this patience can last.”
“Sometimes, the cost of fiscal austerity is lower than continuing inflation,” Sebastian Maczka, a scholar on Argentina at Johns Hopkins University, pointed out. “It’s like a fire. While some people are severely burned, isn’t it true that the fire is finally extinguished?
Facing these controversies, the Chief Minister of the Cabinet, Gilberto Franks, admitted that Miliá could not achieve all the reform goals within a single term. This also means that more painstaking reforms may still be ahead.
In July 2025, an unexpected political storm swept through Buenos Aires. Less than a hundred days before the midterm elections, due to a pension bill passed with high votes in the Senate, Miliá publicly rebuked Vice President Villarreal as a “traitor” in public, exposing deep divisions at the top of the government to the public.
In fact, this confrontation was foreshadowed from the start. Miliá and Villarreal, who originally came from different political parties, joined forces in Congress in 2021 because they both belonged to the far-right camp. They then campaigned together in the 2023 Argentine general election and were successful in their bid. However, from the beginning, this alliance seemed like a reluctant political marriage: one was an unruly economist, self-proclaimed “anarcho-capitalist”; the other was a hardliner, supported by military and police, with conservative stances. The two had very different ideas and styles.
At the beginning of his term, Villarreal attempted to control defense and security affairs but was excluded from the core of power by Miliá. The first major crack in their relationship occurred in March 2024 when she approved a senator’s pay increase bill, which was forcefully vetoed by Miliá. Since then, Miliá gradually marginalized Villarreal until May 2025, when they even did not shake hands during an official ceremony, making their conflict fully public.
The “Buenos Aires Herald” analyzed that Villarreal is seeking to run independently for president in the 2027 elections, and the pension bill dispute is seen as a symbolic action of her “departure” from the party. “She is cutting off from Miliá, trying to shape her own political brand,” commented an Argentine political observer.
米莱政府面临的挑战包括地方势力的集体“反水”，即地方政府在参议院推动增加财政支出的法案，公然挑战紧缩政策。这可能导致财政盈余化为乌有，并威胁将否决相关法案。米莱政府警告说，这可能使财政盈余化为乌有，并威胁将否决相关法案。
米莱在公开讲话中将矛头直指地方政府，称这是一场“未遂的政变”。他指责各省省长试图“摧毁”政府，是因为看到他的政党在民调中支持率飙升后“感到绝望”。
长期关注阿根廷政治的政治风险咨询公司Horizon Engage美洲区总监马塞洛·加西亚告诉《中国新闻周刊》：“对于总统改革议程来说，与阿根廷力量强大的各省省长对抗，更可能是制造阻碍，而非产生推动作用。”
阿根廷实行联邦制，下辖23个省和1个联邦首都区。每个省都有自己的政府和立法机构。此前，大多数掌握地方权力的省长都向中央政府低头，原因是各省迫切需要联邦政府的资金。
在国会层面，米莱的处境同样艰难。“自由前进党”在参议院72席中仅占7席，在众议院257席中仅占38席。作为总统，他也几乎没有任何省长盟友，行政命令屡屡遭遇立法与司法的阻碍。
正因如此，省长们的联合行动被外界解读为“变相的建制派反击”。据悉，他们不仅在合力封杀总统的重要法案，还计划在中期选举中推出共同候选人，争取在议会获得足以发起弹劾的三分之二多数。一位接近反对派的分析人士透露，米莱甚至可能在年底前面临弹劾程序。
在一些中间派看来，这场政治斗争本质是一场制度博弈。
Carlos Jelvaño, pointing out that Milé’s fiscal surplus was partly achieved by freezing state allocations, but these funds were not originally central government funds, leading to growing local resistance.
In this context, the role of Vice President Villarreal is particularly delicate. On one hand, she remains the “number two” under the name of the “Free Progress Party,” yet on the other hand, she has become an “alternative” within the Argentine right-wing, potentially even a successor to Milé after his failure.
However, Milé continues to maintain his tough stance, clearly stating his intention to veto the pension bill and vowing to fight until December 11th. That day marks the official inauguration of new congress members, potentially marking a new watershed in Milé’s political destiny.
The midterm elections held in October will elect half of the House of Representatives and one-third of the Senate seats. For Milé, this represents a turning point in his reform roadmap. Losing parliamentary support would make it difficult for the second phase of the “electric saw” reforms to advance.
Former Finance Minister Afonso Plat García believes: “Argentina’s problem is never an economic one; it’s a political and governance issue.” He argues that if Milé cannot learn to negotiate and compromise, even the best economic data will struggle to support a sustainable future.
Published on July 28, 2025, in Issue 1197 of China Newsweek magazine.
Milé’s “Electric Saws” Pains
Zheng Liying (murielzheng@gmail.