Argentina Wants to Rearm Its Military, but the Money Is Not There

Argentina · Defense

Key Facts

—The gap. Argentina spends a smaller share of its economy on defense than any other country in South America.

—The fix. President Milei has created a new fund that diverts a slice of privatization proceeds to the military.

—The man. The plan is driven by the first military officer to run the defense ministry since democracy returned in 1983.

—The catch. The cash depends on selling state assets, an uncertain and slow-moving source of money.

—The strain. Deep budget cuts are reported to be squeezing even basic costs at military bases.

—The stake. Argentina is falling further behind Brazil and Chile just as it tries to catch up.

Argentina defense spending is the lowest in South America, and the Milei government’s clever plan to rearm the armed forces without raiding the treasury now faces a blunt fiscal reality.

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Argentina has a problem that decades of governments have ducked. Its armed forces are badly under-funded, flying and sailing equipment that in many cases dates back to the Cold War.

The scale of the neglect is now hard to dispute. According to the Stockholm peace-research institute SIPRI, Argentina spent just over half of one percent of its economic output on defense last year, the lowest figure of any South American nation.

That trails neighbours by a wide margin. Chile spends close to one and a half percent of its economy on defense, and even Brazil and Bolivia commit more than Argentina does.

A new idea to fund Argentina defense spending

President Javier Milei’s answer is creative. In May he signed a decree creating a scheme known as Plan ARMA, designed to give the military a fresh and lasting source of money.

The mechanism is tied to the government’s sweeping privatization drive. Whenever the state sells, leases or privatizes assets that do not belong to the military, a tenth of the proceeds will now flow to the defense ministry.

For assets the armed forces own themselves, the share is far larger, at up to seventy percent. The money is earmarked for new equipment, modernization and strategic infrastructure, on top of an existing multi-year defense fund.

A soldier in the minister’s chair

The plan is the work of Carlos Presti, a lieutenant general whom Milei named defense minister in December. His appointment was itself a milestone.

Presti is the first active or former military officer to hold the post since Argentina returned to democracy in 1983, after the dark years of military dictatorship. In a country with that history, putting a general in charge of defense carries real symbolic weight.

The hole in the plan

The weakness is obvious once you look closely. The new money does not come from a stable budget line but from asset sales, which are uncertain, politically fraught and slow to complete.

Meanwhile the day-to-day picture is grim. Local media report that the latest round of spending cuts is so severe it threatens basic costs at military bases, with some accounts describing strained food and utility budgets and soldiers earning less than a thousand dollars a month.

The government rejects the gloom. It argues that it is the first administration to take defense seriously, though officers quoted in the Argentine press paint a far bleaker scene.

The American thread

The flagship purchase shows both the ambition and the dependence. Argentina is buying two dozen second-hand F-16 fighter jets, an American-made aircraft sold via Denmark, and the first six have already arrived with pilots in training.

Yet that deal leans heavily on Washington. Commentators in the Argentine press note that its smooth progress owes much to President Trump’s political support for Milei, a reminder of how much of the rearmament rests on factors Buenos Aires does not fully control.

Why it matters beyond the barracks

For an outsider, this is more than a military story. A country’s ability to fund and equip its forces is a useful gauge of its fiscal health and its standing among its neighbours.

On that measure Argentina is still playing catch-up while Brazil and Chile invest steadily. Plan ARMA is an ingenious attempt to break the cycle, but until the asset sales deliver real cash, it remains a promise rather than a turnaround.

Connected Coverage

For more on the regional defense build-out, see our reporting on Argentina’s first new tactical trucks under Plan ARMA and on Brazil’s home-built radar tested against its Gripen fighter.

Frequently Asked Questions

How much does Argentina spend on defense?

According to the research institute SIPRI, Argentina spent just over half of one percent of its economic output on defense in 2025. That is the lowest share of any country in South America, well below Chile and Brazil.

What is Plan ARMA?

It is a scheme created by President Milei’s decree that funds the military from the sale of state assets. A tenth of the proceeds from selling non-military assets, and a much larger share from military-owned ones, is directed to the defense budget.

What is Argentina buying for its military?

Its highest-profile purchase is two dozen second-hand American F-16 fighter jets, sold through Denmark, with the first six already delivered. The wider plan also covers new vehicles, modernization and base infrastructure.

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