Argentina Politics Update - 25 October 2023
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On Sunday, Argentines voted for Sergio Massa and Javier Milei to face off in a presidential runoff election on November 19. I wrote about the impacts of the first round results here:
https://argentinapolitics.substack.com/p/general-election-first-round-analysis
Politics
REACTION: Massa Takes First Place in Argentina, Heads to Runoff With Milei (Americas Quarterly)
It was surprising to many that Economy Minister Sergio Massa was able to significantly increase his vote share compared to the August PASO primaries, while libertarian outsider Javier Milei’s votes remained relatively unchanged
“In a way, yesterday’s election was a godsend for Massa: It turned into a plebiscite around democratic values, and not the economic performance of the government,” says María Esperanza Casullo
5 Takeaways From Argentina’s Election (New York Times)
Milei is in a weaker position than expected
Massa counted upon the “powerful Peronist political machine” to come in first place
Massa’s economic policies implemented to help him win votes, combined with Milei’s inflammatory comments about the peso that have caused runs on the currency, have sent the economy further into a tailspin
Both Milei and Massa will now be fighting for the votes of the 6.2 million people who voted for former defense minister Patricia Bullrich
Neither Massa nor Milei has a clear shot at winning the runoff election
Results from the first poll post- first round election (Clarín)
The first poll following Sunday’s results, conducted by CB Consultora Opinión Pública - in collaboration with Atlas Intel, Trespuntozero, and Proyección - showed a tie
Milei’s voter intention reached 41.6% and Massa’s reached 40.4%, with 10.4% of respondents saying they would either not vote or vote blank and 7.5% of respondents still undecided
As Boz notes on Twitter, the poll also shows both candidates with 50% disapproval ratings, meaning the race becomes increasingly more about voter turnout - “Who shows up and who stays home?”
Argentina's Massa, Milei battle to woo 9 million swing votes (Reuters)
Massa and Milei will fight to earn the 8.8 million votes that went to the three losing candidates in the first round of the elections, votes that had gone to Patricia Bullrich, Juan Schiaretti, and Myriam Bregman
Votes earned by left-leaning candidates Schiaretti and Bregman may go to Massa, while Bullrich’s more conservative tone may lead her voters towards Milei, though much is still up in the air
Though Bullrich voters tended to be anti-Peronist and more conservative, they may not agree with Milei’s anti-establishment “chainsaw” plan and turn towards Massa in the runoff
This election saw the lowest turnout for a presidential vote since the country’s return to democracy in 1983
Who Has the Edge in Argentina’s Race for President? (Latin America Advisor)
“After coming third in August, the economy minister successfully mobilized governors, mayors and trade unions to exploit the Peronist movement’s historical territorial capillarity and regain control of the provinces lost in the primaries,” explains Juan Cruz Díaz
Argentina opposition faces fragmentation ahead of runoff (Latin America Daily Briefing)
“Bullrich is ideologically closer to Milei, and many of her voters could be expected to support the libertarian in November’s second-round. But an alliance with party leaders, led by former President Mauricio Macri, could alienate the more moderate parties in JxC — the Unión Cívica Radical and Coalición Cívica — who are inclined to avoid taking sides or to support Massa in defense of democratic values,” explains Jordana Timerman
Argentina’s election result is the worst of all possible outcomes (Economist)
The author notes two key messages that resulted from Sunday’s election: a rejection of a rational, center-right platform for change, and the difficulty for political outsiders to break into long-standing Peronist rule (Peronists have been in power for 28 of the last 40 years, since the country’s return to democracy)
How Argentina's Massa pulled off election upset with tax cuts and bus fares (Reuters)
Massa’s strategy of implementing tax exemptions and capitalizing on voter concerns over the loss of state subsidies promised by Milei help explain how he received 37% of the vote on Sunday, despite overseeing one of the worst economic crises the country has faced
National electoral map: Where Massa recovered the presidential race (Buenos Aires Times)
“Massa managed to retain the five provinces he had won in the PASO blue (Buenos Aires, Santiago del Estero, Catamarca, Chaco and Formosa), while adding victories in eight others: the provinces of Tucumán, La Rioja, Corrientes, Entre Ríos, La Pampa, Río Negro, Santa Cruz and Tierra del Fuego.”
Milei maintained his victorious PASO results in Córdoba, Santa Fe, Mendoza, Misiones, Jujuy, Salta, San Juan, San Luis, Neuquén and Chubu, though he lost any new districts and in six regions, dropped from his pole position to second place
Opposition coalition Juntos por el Cambio (JxC) won only Buenos Aires City, down from its three provincial victories (Buenos Aires City, Entre Ríos, and Corrientes) in the PASO primaries
Argentina's money machine and fear were all it took to stop Milei’s surge (Buenos Aires Times)
“The election exposed Argentina’s never-ending dilemma: people simultaneously want change but fear it. They’re sick of inflation that eats away at their salaries but hesitant to support the kind of measures — like spending cuts that would hit the poor hard — needed to tame it.”
Milei changes tactics after defeat, seeks new alliances ahead of the run-off (Buenos Aires Herald)
Milei indicated he was open to including Bullrich in his potential government as security minister, despite recent accusations of Bullrich having bombed kindergartens during her time as a member of the Montoneros - an armed guerilla group - in the 1970s
Bullrich has filed a criminal complaint against Milei for defamation and libel, following his comments
Argentina: leftists celebrate after far-right Milei fails to win election victory (Guardian)
Latin American left-wing leaders, including Colombia’s Gustavo Petro and Brazil’s Luiz Inácio Lula da Silva, congratulated Massa for his first-round victory
Peronism: Argentina's eternal political mystery (Buenos Aires Times)
Peronism, a political movement that has shifted ideologies four times over the last century, is a lasting feature of Argentina’s politics
The reconfiguration of the political map (Buenos Aires Times)
The future of the opposition Juntos por el Cambio (JxC) coalition is at risk following their dismal showing in the elections
JxC is comprised primarily of the Propuesta Republicana (PRO), Unión Cívica Radical (UCR), and Coalición Civica political parties, all of whom have differing positions with regards to Massa and Milei and may end up splitting their support in the runoff election
JxC leader Mauricio Macri has flirted with Milei over the past months, amidst critiques of his own coalition candidates and members; his professed support for the libertarian could be the final nail in the coffin for JxC
Leandro Santoro pulls out of Buenos Aires City mayoral run-off, handing Jorge Macri victory (Buenos Aires Herald)
Leandro Santoro, ruling party Unión por la Patria (UxP) candidate, decided to drop out of the runoff election for Buenos Aires City mayor, where he would have faced off against JxC’s Jorge Macri (cousin of former president Mauricio Macri)
Macri missed out on winning the mayoral race by less than 0.4% (mayoral candidates must reach 50% of the vote in order to win outright)
Santoro, who won 32.2% of the votes, realized that Macri’s first-round numbers, to which the votes of Milei’s preferred candidate (Ramiro Marra) would then be added, made it impossible for a second-round victory to be obtained
“Santoro’s decision – widely seen as cynical and designed to dampen opposition voter turnout in the November 19 presidential election run-off – should prevent any sectors of Juntos por el Cambio from using the mayoral race in horse-trading talks with Milei over who the opposition should support in the second-round presidential showdown.”
Economics
Argentina investors burned by politics dread what comes next (Bloomberg)
Argentina’s dollar bonds opened on Monday as the worst performers in emerging markets following Sunday’s elections
Investors are fearful that Massa, as Economy Minister, will continue to implement welfare policies in order to retain and gain votes ahead of the November 19 elections, furthering the country’s economic crisis
Investors are also considering who Bullrich’s voters will turn to, as the former candidate was seen as the top choice for most businesses
With no devaluation on cards, Massa seeks to tame tense FX market (Buenos Aires Times)
Though a sharp devaluation of the peso did not occur following the election - as many had expected it to - market sources apart from the country’s Economy Ministry “have forecast that risk assets, bonds and shares will have a downward trend, due to the consistent foreign exchange intervention.”
Argentina's economy grew again in August despite inflation spike (Buenos Aires Times)
The economy grew 1.3% in August, compared to July
GDP rose 0.3% when compared to the same month the previous year
However, GDP fell by 2.8% in the second quarter, largely due to a historic drought that cost the country almost $20 billion in agriculture exports
Economy Ministry promises to keep AR$350 exchange rate until November 15 (Buenos Aires Herald)
Economic Policy Secretary Gabriel Rubinstein announced that the official exchange rate would be subject to a crawling peg (the gradual and controlled devaluation of a currency) at 3% until November 15 (four days ahead of the runoff election)
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