Argentina’s Transformation: What Milei’s Reforms Changed — and What They Didn’t

Argentina · OPINION

Milei’s reforms have changed Argentina’s starting point. They have not answered the harder question: what kind of economy Argentina will be in 2040 — and that question is now the story.

Annual inflation fell from more than 200 percent at the end of 2023 to around 32.5 percent at the beginning of 2026. In 2025, the federal government achieved a primary surplus equal to 1.4 percent of GDP, and the budget also closed with a small surplus after interest payments were included. At the same time, the IMF continues to point to weak foreign exchange reserves, expensive access to capital, and the need for further reform of economic institutions. Stabilization is therefore an achievement, but also the beginning of the next problem.

Argentina already has resources from which much more than a stable economy can be built. It has a vast agricultural sector, Vaca Muerta, lithium deposits, and companies that grew out of Argentina and succeeded in entering global markets. It is not starting from a blank page. The decisions being made now will determine who owns the new assets, where the profits remain, and whether today’s investments will finance the next generation of Argentine companies. In a dozen or so years, these decisions will no longer be economic policy. They will be the structure of the economy.

Poland, Romania, and Bulgaria show why the mere presence of a strong external anchor is not enough. All three countries entered the European Union’s single market and gained access to European funds, foreign capital, and common rules. Integration helped the entire region increase incomes rapidly and enter European production chains. After two decades, however, it is clear that similar external conditions did not produce similar economies.

Poland used integration to carry out a deep transformation of its economy and move into the group of high-income countries, although it is still trying to move its own companies toward technology and higher value added. Romania rapidly narrowed the gap with the West, yet the World Bank continues to point to weaker capital markets, institutional problems, and limited business innovation. Bulgaria gained the same access to the market, foreign investment, and cohesion funds, yet it remains much further from the European Union’s average income level and continues to struggle with productivity and demographic problems.

Argentina has no equivalent of the European Union. It has Mercosur, the IMF, China, the United States, the European Union, and global capital markets, but each of these partners provides only part of what European integration provided to Central Europe. Argentina will therefore have to assemble its external anchor from several elements — and decide which functions it wants to obtain from outside and over which it must retain its own control.

The most important question about new investment is not only how much capital will flow into Argentina, but also what will remain after the first investment cycle. RIGI gives large projects thirty years of tax and customs stability. This is a strong signal to investors, especially in energy, mining, and infrastructure, where returns on investment are measured in decades.

The value of investment alone, however, does not tell us how the structure of the economy will change. In September 2026, a project involving two urea plants and an ammonia plant in Bahía Blanca, using gas from Vaca Muerta, was approved under RIGI. It is a good example of the difference between selling a raw material and building the next stage of production within the country.

Ownership should be viewed in the same way. A foreign owner can bring technology, capital, and access to customers; an Argentine owner can just as easily move profits abroad. What matters to the economy, therefore, is whether successive projects create local suppliers, financiers, managers, and owners capable of financing the next investment. If every successive phase of development once again requires capital, technology, and decisions from outside, growth in production does not necessarily lead to a comparable increase in domestic economic strength.

Argentina is capable of producing entrepreneurs. The more difficult test will be how many of them build companies employing hundreds or thousands of people, investing their own capital, and selling outside the country. Between a small business and a large enterprise lies a threshold that cannot be crossed through the owner’s work alone.

A growing company needs credit for several years, professional management, technology, people, and access to new customers. The owner must also give up part of the day-to-day control to managers and create an organization that can function without them. This is a different problem from simply making it easier to start a business.

Access to financing remains such an important constraint that in 2026 the World Bank and MIGA launched a package for Argentina intended to mobilize $2 billion in commercial financing, among other things by lowering the cost of capital and increasing smaller companies’ access to finance.

Ten years from now, therefore, more important than the number of new companies will be the number that have moved from local business to medium-sized enterprise, and then into foreign markets. It is precisely at this transition that a domestic layer of companies emerges, capable of independently accumulating capital, technology, and expertise.

Argentina does not have to build its business-support infrastructure from scratch. It already has, among other institutions, BICE, the state development bank that finances productive investment and foreign trade. In 2025, the bank provided companies with more than 480 billion pesos in loans, with 94 percent of that financing going to small and medium-sized enterprises. It also offers export financing and long-term instruments that allow Argentine producers to sell abroad together with credit for the buyer.

The problem begins when a company needs several things at once: capital for a new factory, technology, professional management, and entry into a foreign market. The existence of a bank, a research program, or an export agency does not yet mean that a company will find a path between them. Poland offers a useful warning in this respect: it is possible to build many development institutions and still leave the entrepreneur with the task of assembling their offerings into a coherent whole.

Argentina therefore needs not so much new public offices as an efficient path from a small company to an exporter, and then to a company operating in several markets. In a country the size of Argentina, such infrastructure must also function outside Buenos Aires. A company growing in Córdoba, Neuquén, or Salta should have access to capital and expertise without having to move the center of its operations to the capital.

Argentina’s most constrained resource may ultimately prove to be not capital or raw materials, but people capable of turning them into companies, technologies, and effective institutions. A new factory needs engineers and technicians. A growing company needs managers capable of building an organization larger than its founder. The state needs officials and specialists able to design regulations, assess investments, and remember why earlier solutions worked or failed.

This layer of expertise does not emerge quickly. It is created by schools, universities, companies, public administration, and many years of professional experience. It can also be weakened much more quickly by emigration, a prolonged income crisis, or the collapse of a stable middle class from which a large share of specialists and entrepreneurs is recruited.

That is why social and education policy are not separate issues in this model. They determine whether Argentina will have the people capable of making use of the investments it is now trying to attract.

Argentina does not have to choose between agriculture, energy, mining, and new technologies. Its advantage may lie precisely in the possibility of developing several major sources of exports at the same time. In 2025, the agro-industrial sector exported goods worth more than $52 billion. In the first seven months of 2026, the value of the sector’s foreign sales exceeded $32 billion, with products reaching 133 countries.

Alongside food, energy is growing. The Argentina LNG project is intended to connect gas extraction from Vaca Muerta with processing, transport, and exports of liquefied natural gas; in August 2026, its sponsors applied to have the $51 billion investment project included under the RIGI regime. Mining generated more than $6 billion in exports in 2025, with lithium accounting for around 15 percent of that value. At the same time, exports of knowledge-based services reached $9.6 billion and provided more than 285,000 formal jobs.

These figures show an economy far more diversified than a simple raw-material exporter. The question concerns the next level: how much food will be sold as processed products and brands, how much gas will become the basis of domestic industry, how much value from minerals will remain after extraction, and whether technology companies will build their own products and capital in Argentina. Argentina’s place in the economy of 2040 will be determined not by the sheer volume of exports, but by how much of the technology, margin, and decision-making remains in the country.

The most difficult test of the reforms will begin when their continued functioning no longer depends on Javier Milei. Part of that change has already taken place. Congress passed the 2026 budget, labor market reform, and further economic legislation, so the program has ceased to be merely a collection of decisions made by the executive branch. The IMF points out, however, that the next stage also requires stronger oversight institutions, transparent privatization and public procurement, and more stable tax and regulatory rules.

This matters in a country where the president is only one participant in the system. Congress can change the law, provincial governors have their own economic interests, trade unions defend their position, and businesses make investment decisions for many years ahead. A reform becomes durable only when some of these groups begin to gain more from preserving it than from returning to the previous rules.

Milei therefore does not have to create a system that his successors will be unable to change. No such system exists. He should, however, leave behind rules, institutions, and economic groups that will have a reason to preserve stability, investment, and openness even after the president changes. The most durable reform is not one that cannot be reversed, but one that enough participants do not want to reverse.

It will be possible to say much more about the success of the transformation well before 2040. By around 2035, it should already be clear whether new investments are creating a different structure of the economy or merely increasing production within the existing model.

The first signal will be the emergence of a larger number of Argentine companies that have moved from the domestic market into exports and are able to finance further investments with their own capital. The second will be the development of local suppliers around Vaca Muerta, mining, food processing, and new technologies. Other signals will include longer-term financing for domestic companies, a greater share of processed products and proprietary technology in exports, and less dependence on a small number of buyers.

People must also be watched: how many engineers, technicians, and managers find work in the new sectors, whether Argentine companies are able to retain them, and whether the experience gained in large projects later passes into other companies. The durability of development is demonstrated not only by the number of new jobs, but also by whether investment increases the country’s stock of expertise.

Warning signs will be equally important. Exports may grow rapidly while domestic companies remain stagnant. Foreign investment may reach record levels while most technology, financing, and decision-making remain outside Argentina. New technology companies may succeed, yet be sold to foreign owners before they have time to create the next generation of local capital.

Then the problem will become visible before it becomes permanent. The point of observing the transformation is not to predict Argentina in 2040, but to recognize as early as possible which path it is beginning to follow.

Argentina in 2040 will not be created in a single breakthrough moment. It will emerge from thousands of decisions made by the government, companies, banks, investors, and provinces, but also from the expertise of the people who, over the coming years, will build companies, design installations, manage organizations, and run institutions. These decisions and capabilities will determine who owns the new assets, which companies grow, where profits remain, and how much of the value created in energy, agriculture, mining, and technology stays in the country.

If the current stabilization creates the conditions for the growth of domestic capital, the scaling of companies, and the development of institutions capable of surviving a change of government, Argentina may enter a completely different category of economies from the one the world has become accustomed to over the past decades.

If, on the other hand, new investment mainly increases raw-material exports while technology, financing, ownership, and decision-making remain largely outside the country, the result will be much more modest: a more stable economy, but one still dependent on external capital and external economic conditions.

The most important question, then, is no longer whether Milei’s shock therapy is working. The question is what kind of economic system Argentina will build in the space that this therapy has opened.

Sources

• indec.gob.ar — Argentine consumer price index
• imf.org — 2026 Article IV Consultation Staff Report, Argentina
• worldbank.org — World Bank / MIGA financing package, June 2026
• argentina.gob.ar — Ministry of Economy; Agriculture Secretariat (SAGyP)
• bice.com.ar — Banco Argentino de Desarrollo, 2025 disbursements
• lanacion.com.ar — Argentina LNG RIGI application, August 2026
• agrositio.com.ar — RIGI approval, Bahía Blanca fertilizer complex
• dataportuaria.com — Agro-industrial exports, January–July 2026

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