Argentine: A portion of privatization proceeds will go towards modernizing the army

The Argentine Government of Javier Milei will allocate part of the revenues from privatizations and the sale of state real estate to modernize the armed forces.

“10% of the funds generated by the sale, lease, or transfer of state assets will be allocated to the equipment and modernization of the Armed Forces,” said Cabinet Chief Manuel Adorni at a press conference. The same percentage will apply to revenues from privatizations of public companies.

The government justifies this measure due to the degradation of military equipment and the evolution of threats. The decree published on Monday in the Official Journal mentions an “international context marked by latent geopolitical conflicts” and the emergence of new risks.

Since coming to power at the end of 2023, Javier Milei has sought to strengthen ties with the military, breaking with often distant relations between the executive and the military institution since the end of the dictatorship (1976-1983). A military officer, General Carlos Alberto Presti, was appointed Minister of Defense in late 2025, a first since the return of democracy.

This measure is also in line with recent acquisitions. In December 2025, Argentina received the first six F-16 fighter jets out of a total of 24 aircraft purchased in 2024 from Denmark for around $300 million. The government qualified this as the “largest military acquisition in the last 50 years.”

In the longer term, the authorities aim to modernize strategic infrastructures and improve response to emergency situations, with the armed forces often mobilized in support during disasters.

The new financing mechanism is intended to complement the resources already allocated by the National Defense Fund, without jeopardizing the stated objective of budget balance.

The Milei government came to power with an ambitious plan of over 40 privatizations, which Parliament has scaled back. About ten processes are ongoing or imminent – only one completed to date – in the areas of energy, water, and transportation, among others.

Economy Minister Luis Caputo recently stated that the government aims to “generate around $2 billion by the end of the year” through privatizations and concessions to the private sector.