Argentina Politics Update - 12 July 2023
Inauguration of key Nestor Kirchner gas pipeline, uncertainty over Massa's longevity as Economy Minister, rising poverty rates
Politics
Argentina’s Economy Minister Isn’t Sure If He’ll Remain in Role as He Runs for President (Bloomberg)
Economy Minister and presidential candidate Sergio Massa will discussion with President Alberto Fernández and vice president Cristina Fernández de Kirchner (CFK) to decide whether or not he will step down from his role as Economy Minister and campaign full-time
The timeline of this discussion is unclear
Facing a war that nobody wants to see (La Nación)
Massa has chosen Patricia Bullrich as his “electoral enemy,” understanding that picking a fight with Larreta would be counterproductive, as both candidates adhere to a similar rhetoric of centrism and moderation
Massa has historically found himself across the ideological spectrum, having strongly criticized CFK and the La Cámpora block of Peronism, disapproved of Larreta’s policies as Mayor of the City of Buenos Aires, and more
Consolation prize: De Pedro announced as Massa’s campaign manager (Buenos Aires Herald)
Former Unión por la Patria (UP) presidential candidate Eduardo “Wado” de Pedro, who was forced to end his campaign in order for Massa to be the coalition’s “unity” candidate, was announced as Massa’s campaign manager last week in another show of political unity
Argentina opposition infighting is hurting its election chances (Buenos Aires Times)
“About 30 percent of those supporting either Rodríguez Larreta or Bullrich say they won’t vote for the other candidate after the primary,” show polls from Poliarquía, a Buenos Aires-based polling firm
Former security minister Patricia Bullrich and Buenos Aires City mayor Horacio Rodríguez Larreta are both running for president under the Juntos por el Cambio (JxC) opposition coalition; it is still not clear who Bullrich or Larreta voters will turn to after the primaries
Radical running-mates add value to PRO presidential tickets (Buenos Aires Times)
The Unión Cívica Radical (UCR) party plays a key role within the JxC opposition coalition, and could provide important support to both Larreta and Bullrich, who have both chosen Radicals as running-mates
In most of the country, Larreta and Bullrich will complete under entirely different lists
“The construction of candidacies revolves around raising the highest possible floor. And that floor can only come from Radicalism with a greater territorial presence, which explains the presence of two Radical running-mates in the same primary,” writes Rodis Recalt
Peronism bets on Larreta and Bullrich arriving worn out to the PASO given the internal fighting and Massa retaining the “K” vote (Infobae)
An ideal scenario for the Peronists would be an extremely tight internal race between Larreta and Bullrich, where every last vote matters
The Unión por la Patria (UP) ruling coalition is hoping Massa post-PASO will be able to rally the more militant “K” or “Kirchnerista” votes, many of whom are currently intending to vote for leftist leader Juan Grabois who broke away from the coalition’s unity plan and is running for president on his own terms
In defence of Milei (Buenos Aires Times, Buenos Aires Herald)
Amidst increasing allegations of having auctioned off spots on the Libertad Avanza party list, Milei has changed his response three times; first dismissing the claims, then claiming a “tax collection” method of campaign financing and criticizing the financing of other parties, and finally claiming he was the victim of “the biggest defamation campaign in Argentine history”
A federal prosecutor has opened preliminary investigations into the corruption allegations
Only the quickest, the meanest and baddest will prevail (Buenos Aires Times)
“The libertarian still retains a healthy portion of the voting intention figures, which suggest he will have a say in the election and, in some respect, in the coming administration’s capacity to govern,” writes Augustino Fontevecchia about libertarian candidate Javier Milei
Though the JxC opposition still leads in polls, the race to the August 13 primaries is getting even tighter and it is increasingly difficult to predict electoral results
Economics
Argentina delegation travels to meet with IMF in US, source says (Reuters)
An Argentine delegation from the Economy Ministry traveled to the US yesterday (Tuesday) to engage in new discussions with the IMF
Argentina is set to pay $2.6 billion in loans back to the IMF by the end of July
Argentina's monthly inflation rate seen slowing to 7% in June (Reuters)
Monthly inflation had hit 7.8% in May
The country has also one of the highest Consumer Price Index (CPI) rates in the world
Private estimates say Argentina’s poverty rate has risen to 43% (Buenos Aires Times)
The latest statistic implies that an additional 1 million people have fallen below the poverty line since the government last published official poverty statistics
This is the highest rate since the first three months of 2006
4 in 10 households in Argentina receive some kind of government assistance through social programs, helping explain why poverty has not yet exploded
Argentina also has a relatively low unemployment rate and a high demand for employment, preventing a significant increase in the poverty rate
Lithium + Energy
Argentina inaugurates key gas pipeline to reverse energy deficit (Reuters)
The Nestor Kirchner pipeline, inaugurated on July 9, is a critical aspect of the country’s goal to achieve a net zero energy balance in 2024 and a surplus in 2025
The pipeline will also play a major role in reducing the Argentina’s energy deficit, which reached $5 billion in 2022 given the country’s need to import energy during certain times of the year
Will Argentina’s Oil Boom Deliver It From Economic Crisis? (Bloomberg)
If Argentina is able to harness production and exportation of its shale and oil deposits in Vaca Muerta, it could credibly aim to become energy self-sufficient and gain much-needed foreign reserves
If oil production retains its upward trend, Vaca Muerta could produce 1 million barrels of oil per day by the end of the decade
Regardless of who the next president will be, they are likely to be close to the oil industry and are unlikely to implement measures that will stifle the oil boom
Argentina’s Pan American Energy joins oil industry’s push into lithium (Buenos Aires Times)
Before the end of the year, PAE will begin to dig exploratory wells in the country’s Andean salt flats
“Argentina has three lithium salt flats in production, with another five projects under construction and 31 more in advanced exploration or feasibility analysis.”
Eramet in talks with European carmakers over Argentina lithium plan, CEO says (Reuters)
French mining group Eramet is is exploring opportunities for additional funding from European carmakers for its lithium production in Argentina in an effort to stave off US and Chinese influence in the lithium space
Eramet, in a partnership with Chinese steel group Tsingshan, will start lithium production in the country next year
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