Argentina Politics Update - 24 May 2023
Record-high government disapproval ratings, circulation of a new 2,000 peso note, critical minerals MOU with the EU under way
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Politics
Poll: May 2023 (Zubán Córdoba y Asociados)
The government reached a record-high 68% disapproval rating, with 72% of respondents believing the country is heading in the wrong direction
The Juntos por el Cambio (JxC) coalition is the coalition that has lost most voter intent since March of this year, from 37% to 28.2%
The Frente de Todos (FdT) coalition also lost voter intent since March, decreasing from 28.7% to 23.9%
Almost 67% of respondents voted against dollarization, choosing instead to strengthen the peso
JxC still led voting intentions with 28.2%, followed by FdT and 23.9% and liberals/libertarians at 20.6%
Candidate without a ballot: CFK will campaign to ensure transfer of votes (Buenos Aires Times)
Cristina Fernández de Kirchner (CFK) is against an extended primary for her FdT coalition, believing that the best strategy would be to unite behind a single candidate as soon as possible
Her top two candidates are Interior Minister Eduardo “Wado” de Pedro and Buenos Aires Governor Axel Kicillof
Kicillof is currently running for reelection as governor
FdT does not expect an outright victory in the election’s first round; its main goal - and challenge - is to get to a second round
Politics in a labyrinth (Buenos Aires Times)
CFK finds herself in her weakest political position in over 20 years
“Cristina’s political renunciation was nothing more than the acknowledgement that winning a presidential election was statistically impossible and would cause more harm than good for her political cause.”
Author Agustino Fontevecchia believes that CFK is considering a run for a Senate seat in the Province of Buenos Aires, a seat she is likely to win
This would also help strengthen support for Buenos Aires governor Axel Kicillof as he runs for reelection
Patricia Bullrich vows crackdown to halt sell-off (Buenos Aires Times)
Bullrich maintains a tough-on-crime rhetoric that may help her in the polls, reflecting the urgency and sense of crisis felt by Argentine citizens
One of her main campaign promises is to undo currency controls to increase exports and reserves
Her potential plans to undo these controls include a floating peso and a “bi-monetary” system
In an informal poll of top Argentine business leaders, Bullrich came out ahead of Horacio Rodriguez Larreta, Javier Milei, and Alberto Fernández (no longer in the race)
Under the volcano (Buenos Aires Times)
Author Michael Soltys argues that the gubernatorial elections in Salta, La Pampa, and Tierra del Fuego demonstrated a weak showing from libertarians, which could translate into a weaker-than-expected showing for libertarian Javier Milei in the presidential race
Beatriz Sarlo: “Javier Milei repeats what I hear on the streets, but he then doesn’t organize those people” (Infobae, Latin America Daily Briefing)
“Antipolitical prejudice exists in many parts of the world, but in Argentina it has increased dramatically. And it's a feeling that didn't exist before."
Sarlo also believes that Milei is not interested in building a political system, rather, he is interested in creating and continuing a mobilizing discourse
Oil union calls off strike (Buenos Aires Herald, Reuters)
The Private Oil and Gas Union of Río Negro, Neuquén, and La Pampa provinces, Argentina’s largest oil union, reached an agreement with oil companies to improve worker safety and called off its strike
Elections 2023: When will we know the definitive list of presidential candidates? (La Nación)
June 24 is the final day, established by law, to register as a presidential candidate
This is also the day that electoral campaigning officially begins
Coalitions must also announce their party alliances by June 14
Surprisingly, Chile Is Still a Role Model for Argentina (Americas Quarterly)
Politicians across the ideological spectrum in Argentina still view Chile as a role model to follow and to find examples of how to govern, despite Chile’s increasing levels of instability
For Milei:
Milei proposed a school voucher system in Argentina, inspired by the Chilean model
He also would like to recreate Chile’s infrastructure efforts in which state funding is limited and the private sector leads development initiatives
Chilean libertarian author Axel Kaiser has also improved and grown Milei’s libertarian network across the region
For Juntos por el Cambio (JxC):
Chile has fiscal discipline, regardless of who is in office
Chile counts upon an independent central Bank
Chilean meritocracy, and the openness of its economy
For Frente de Todos (FdT):
Chile’s progressive transformation, including the constitutional reform process
Nationalization of lithium production
Economics
Highest-denomination bill in Argentina is now the 2,000-peso note, worth $4 (The Guardian)
The government introduced 2,000 peso bills into circulation on Monday, as the country wrestles with 109% inflation and quick depreciation of its currency
About half of all commercial transactions are still carried out in cash
According to the Central Bank, “This higher denomination bill will improve the operation of ATMs and at the same time optimize the movement of cash.”
IMF ‘evaluating’ new measures from Argentina's government as talks continue (Buenos Aires Times)
“...the amount of sums to be advanced by the IMF is no longer under discussion. However, what percentage of those funds can be used to calm exchange markets, within a context of upcoming elections and drought leading to portfolios being dollarised, is still up for debate.”
Former Economy Minister Martín Guzmán said that the IMF had pressured him to raise interest rates significantly, despite his arguments that the measure would not help curb rising inflation
Argentina's government creates US$50-million workaround for U-20 World Cup (Buenos Aires Times)
The government implemented a new exchange rate just days ahead of the beginning of the U-20 World Cup for participating teams, to import necessary equipment
Lithium
Lithium: the country’s largest project begins production and its CEO explains how the world views Argentina’s successful model (Cronista)
Cauchari-Olaroz will be Argentina’s third lithium project, and is expected to produce more than both currently active mines combined
Production is expected to produce 40,000 tonnes of lithium carbonate per year, more than the 35,000 tonnes produced by Allkem and Livent
Lithium Americas Corp (Canada), in a joint venture with Gangfeng (China) and Jamse (Jujuy’s Energy and Mining Society of the State), will operate and manage the project
Ignacio Celorrio, CEO of Lithium Americas, warns against the potential nationalization of the lithium sector, stating it would stifle future projects and growth
Celorrio also believes that if Argentina continues its current lithium growth curve, the country is set to overtake Chile’s production rate in as short as five years
EU Nears Critical-Materials Agreements with Argentina, Chile (Bloomberg)
The European Commission expects preliminary MOUs to be signed within the next four months, increasing the EU’s access to Argentina’s and Chile’s critical minerals, especially lithium
“The preliminary agreement will likely come ahead of Argentina’s presidential election in October, where the ruling Peronist coalition faces long odds and it isn’t clear what lithium policy a new government will implement.”
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