President Javier Milei aims to reform Argentina’s economy in a similar way to how Ireland transformed its fortunes in the last three decades. The Irish, however, see their history with more nuances.
The libertarian who came to power last year has taken the European country as a reference in his passionate but often academic speeches. While gross domestic product (GDP) in the chronically crisis South American nation is set to contract 3% this year, It is expected to rebound strongly towards 2025 as Milei’s austerity plan begins to bear fruit.
“My model is similar to Ireland’s”Milei said in a keynote speech during a business conference in October in the Argentine city of Mar del Plata. “Ireland went from being the most miserable country in Europe 40 years ago to today having a GDP per capita 50% higher than that of the United States.”
Ireland has taken note of its new attention on Argentina. Its embassy in Buenos Aires received this week the economist Alan Barrett, director of the Institute for Economic and Social Research based in Dublin, to speak to the Argentine press, policymakers and the public about how Ireland achieved its economic advances.
Since Milei began mentioning Ireland, Irish officials have seen “sustained interest” from Argentines which “tends to focus on Ireland’s GDP, its business-friendly environment and its open economy”, according to a spokesperson for the Irish foreign department. “The purpose of the visit was to share perspectives on Ireland’s economic model, including both its challenges and successes,” the spokesperson added.
Although Milei focuses on GDP per capita, Barrett clarified that Irish economists do not consider it an accurate picture of their economy because the figures are highly inflated by corporate income, especially from foreign multinationals established there. It does not reflect the real or domestic income of the country.
Instead, Barrett said, Ireland tends to focus on gross national income, or GNI, a metric that attempts to capture Ireland’s economic performance excluding the effect of corporate income.
“GDP doesn’t really reflect the lived reality in Ireland,” Barrett said in an interview a day after speaking at the Argentine think tank Cippec in Buenos Aires. “Still, if you look at the GNI, Ireland is still doing quite well. It’s not as extraordinary as it is if you look at GDP per capita.”
While Ireland’s GDP has grown 87% since 2015, the GNI has risen 72% in that time, according to the country’s statistics agency.. The Irish finance ministry has also used modified domestic demand to calculate underlying activity which includes personal, government and investment spending in the country.
Barrett acknowledged that comparing some aspects of Argentina and Ireland is like comparing apples and oranges. Ireland benefits from large corporate investments and its membership in the European Union, while Argentina remains a protectionist country dependent on commodity exports.. However, they share cultural ties: Argentina is home to the largest community of Irish descendants in Latin America.
The Irish economist also highlighted that, in addition to reducing the corporate tax rate, the government’s public investments over decades in education and infrastructure — two areas where Milei has aggressively cut spending — became pillars of Ireland’s argument to attract large multinationals such as Apple Inc. and Meta Platforms Inc., which have their European headquarters there.
“In Ireland, much government spending improves the productive capacity of the economy,” Barrett said. “Spending on education is seen as one of the ingredients in Ireland’s success story.”
