In a detailed analysis of the first Draft Budget Law for the year 2025 by Javier Milei in his capacity as Commander in Chief of the Armed Forces, the digital version of the renowned specialized magazine Zona-Militar published yesterday a series of considerations regarding the projects that the National Executive Branch intends to execute in the field of Defense in the coming year.
Firstly, it indicates that although the project estimates an 18% increase for Defence, in line with the estimated inflation, it does not coincide with the inflationary expectations for 2025 of the IMF, the WORLD BANK and the REM of the Central Bank . And that, in the event that inflation were higher than 18% annually, the relevant adjustment would occur with regard to items for the operation of the military instrument, and salaries, as will occur (and has been occurring) in all jurisdictions of the Public Administration.
As regards the recovery of capabilities, says Zona-Militar , many “ theoretical” elements are observed, which imply systems to be incorporated with an impact on future exercises, some of which would be carried out with loans. However, the approval of said credit operations does not guarantee that they will be approved or that the financing will be obtained to make the aforementioned acquisitions.
Military projects in Milei's 2025 budget
As for the Argentine Navy , the Budget presented on Sunday by the President, contemplates the recovery of submarine capacity, the acquisition of 2 ships for the sea fleet, 2 logistics ships, 1 amphibious ship, the construction of the dock and continuation of works for the Integrated Naval Base in Ushuaia, light helicopters for the Naval Aviation Command , this force being the one that would benefit the most according to these assumptions.
And with respect to the Argentine Army and the Argentine Air Force, the addition of new trucks, machine guns, helmets, vests, 6 transport aircraft, vans, buses is planned, highlighting the conditioning of the Sixth Air Brigade to receive the F-16 aircraft acquired this year.
Although the extensive list of elements to be incorporated is a real opportunity to take a significant step after years in which defense budgets did not exceed 1% of GDP, it is worth remembering that this is not the first time that various acquisitions have been contemplated, which ultimately do not materialize , the media outlet recalls.
On the other hand, the media warns that in article 27 of the presented budget bill , one can observe the suspension of section 1 of article 4° of Law 27.565 FONDEF (a fund of specific allocation that aims to finance the process of re-equipment of the Armed Forces, through the recovery, modernization and/or incorporation of material widely valued by the political spectrum) , within the framework of the public emergency declared by article 1° of Law 27.742 of Bases and Starting Points for the Freedom of Argentines.
Therefore, with this measure, the commitment established by this Law to grant 0.8% of current income (estimated approximately between 800 and 900 billion pesos ) established as of 2023 and for successive budgetary years is eliminated.
The incorporation of a polar vessel to complement the ARA “Almirante Irizar” Icebreaker is a necessity to increase logistical capacity in Antarctica.
On the other hand, Zona-Militar reports that “ as of July 10, 2024, only 37.65% of the resources allocated to the Defense Function had been executed.” And that, “ as for FONDEF, only 35.61% of the total budgeted as of the same date had been accrued. In short, the amount executed by the Defense+FONDEF Function reached 37.78%.”
And although he interprets that the draft Budget Law for Jurisdiction 45 partially summarizes the will to move forward steadily in the recovery of capabilities and modernization of the Armed Forces; " the suspension of FONDEF and the dependence on loans to finance some acquisitions generate uncertainty about the effectiveness of these plans , considering the particular economic situation of Argentina in relation to external credit, and the successive debt maturities that will occur next year."
If Javier Milei's 2025 budget reflects his pragmatic vision of the role of the State in the next 3 years, summarized in "Managing is shrinking the State to enhance society" - a phrase pronounced last Sunday in the National Congress - Zona-Militar interprets that this covers the entire National Public Administration. Consequently, "without leaving the Ministry of Defense exempt."
