Argentina Politics Update - 10 May 2023
Regional elections results, Supreme Court suspends upcoming regional elections, Chile's new lithium strategy a boon for Argentina
Politics
What are the results of Argentina’s latest regional elections? (CNN en Español, La Nación)
In all three provinces, the current ruling party was able to maintain its hold on power and will continue its mandate
La Rioja: Frente de Todos (FdT) governor Ricardo Quintela was reelected, with 50.6% of the votes
The Juntos por el Cambio (JxC) candidate attributed part of his loss to Javier Milei, blaming Milei’s Libertad Avanza party for taking votes from the JxC coalition
Jujuy: Carlos Sadir won the governorship, maintaining the JxC coalition’s control of the province
Sadir belongs to the radical party of the JxC coalition, offering the radicals an important leg up within the coalition
Misiones: The Frente Renovador de la Concordia party, part of the FdT coalition, won the election, maintaining another province in control of the current ruling coalition
Milei’s Libertad Avanza party did not make the headway it had hoped to achieve
“As what has already occurred in Neuquén and Rio Negrio, the elections in La Rioja confirmed that the economist [Milei] is a personalistic phenomenon that, though he has non-negotiably been gaining territory, his ideals have not yet consolidated as a collective construction, based on an ideological definition.”
Supreme Court of Justice of Argentina suspends two provincial elections 5 days before voting (CNN en Español, Infobae)
Elections have been suspended in the provinces of Tucumán and San Juan
Lawsuits have been brought against candidate Sergio Uñac of San Juan and Juan Manzur of Tucumán by rival parties
In San Juan, where Uñac seeks a third term as governor, the opposition Evolución Liberal argues that the Constitution states a governor or vice governor may not serve more than two consecutive 4-year terms
In Tucumán, the JxC opposition coalition argues that Manzur, who served as governor for two terms and is now seeking the vice-governorship, is also in violation of the Constitution’s established term limits
No date has been set for new elections, nor for when a final decision is to be expected
President Alberto Fernández has already spoken out against the Supreme Court’s decision, claiming that it “aligned itself” with the opposition
Maria Eugenia Vidal drops out of Argentina’s presidential race (Buenos Aires Times)
The PRO candidate decided to drop out ahead of the country’s PASO, confirming the decision during a meeting with former president Mauricio Macri earlier this weekend
The main JxC coalition candidates continue to be Horacio Rodriguez Larreta and Patricia Bullrich; Vidal has not yet announced who she would support
Peronism’s identity crisis (Buenos Aires Times)
The author argues that the Peronist party is a “partido de la ola,” or “trending party” because it “alters its principles to adapt to international political trends with the ultimate goal of staying in government.”
“The movement’s identity crisis was symbolized by the creation of an electoral coalition whose main leaders (Cristina Fernández de Kirchner, Alberto Fernández and Massa) were all Peronists but whose actions and ideas seemed to belong to different parties.”
Cristina Kirchner is the last remaining Peronist heir, up until now; this makes it difficult for other politicians to grow while in her shadow, but also makes it difficult for her to be the coalition’s main leader, given her polarizing figure
Argentina’s drops 11 places in Reporters Without Borders press freedom ranking (Buenos Aires Times)
The country dropped from 29 to 40 in the past year, with Reporters Without Borders writing that “Heavily concentrated and opaque media ownership, polarization, the lack of governmental policies guaranteeing media pluralism, and low pay for journalists are the main threats to freedom of expression in Argentina.”
The report also notes the potential for outside influence, particularly from the government and the private sector, in the journalism industry
Economics
The economic crisis in Argentina revives the ghost of dollarization (El País)
Despite most of the political spectrum, and 60% of citizens, being opposed to dollarizing the economy, libertarian Javier Milei continues to promote the economic policy
Economists and analysts explain the immense difficulty it would take for the government to dollarize the economy, and the profound short-term impacts the policy would have on citizens’ lives
IMF confirms progress in Argentina programme talks (Buenos Aires Times)
Technical teams from the IMF are working with the Argentine government to find a solution to the country’s historic drought, which “is set to cost Argentina around US$20 billion in revenue” and all but ensure that Argentina will not meet its targets for reserve accumulation and fiscal deficit
Counterpoint between United States and Argentina for trade barriers and China (El Cronista)
Ambassadors Jorge Argüello (Argentina to US) and Marc Stanley (US to Argentina) spoke publicly in an event hosted by the American Chamber of Commerce in Argentina (AMCHAM)
Ambassador Stanley argued that Argentina could collaborate with the US to help provide food and fuel to the rest of the world
Ambassador Argüello also argued that if the US wants to stop China from further investing in Argentina, then the US would have to implement concrete initiatives and halt trade restrictions Washington currently has in place
Lithium
Chile and Argentina Are Playing Against Type on Lithium Mining (World Politics Review)
Though Chile is generally viewed as a market-friendly country and Argentina as “a basket case of state intervention where businesses will suffer,” in the lithium sector, those narratives have been flipped
The Argentine government has barely intervened in the lithium industry, and has removed various roadblocks for foreign investment, making business expansion and production progress likely
On the other hand, Chilean president Gabriel Boric presented a plan in the past month to nationalize part of the lithium sector, under a public-private partnership that is unlikely to succeed in the long run
“Perhaps the biggest issue is that Chile and Argentina are seen in competition with each other when it comes to managing their lithium reserves.”
An OPEC-style organization with Argentina, Bolivia, and Chile is unlikely to occur
Lithium: Will Chile’s national strategy attract more investment to Argentina? (Bloomberg Línea)
Argentine analysts and investors agree that the strategy of the northern provinces - maintaining an export model for the lithium industry - is the best path forward; nationalization of the industry would likely result in losses for the country
Though Argentina in 2022 exported $696 million in lithium carbonate, well below Chile’s $8.093 billion exports, analytical reports suggest that Argentina will end up surpassing Chile’s lithium exports by 2030
Chile’s plan to “semi-nationalize” the sector may make Argentina a more attractive investment option in the short-term, but it may also provide some risk relief for resource investments across Latin America
In Argentina, lithium management and production is largely run by the provinces; a unified strategy may help long-term efficacy
Eduardo Porter: Latin America’s new lithium bounty unearths an old problem (Buenos Aires Times)
Current lithium management policies in Bolivia, Mexico, and Chile, all with varying levels of state control of the industry, are not likely to help boost investment
Argentina has been the only country making money from its lithium industry, mainly by offering concessions with government guarantees in exchange for a low three-percent royalty
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Hxagon provides risk analysis and bespoke investigations in emerging and frontier markets, primarily in Latin America. Hxagon was founded in 2017 by James Bosworth, a writer and consultant with two decades of experience analyzing politics, economics, security and technology issues in Latin America and the Caribbean.
Contact: info@hxagon.com