Argentina Politics Update - 27 September 2023
Recent poll places Bullrich in 3rd, new government cash handouts, renewed energy cooperation agreement with France
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Politics
Javier Milei takes 20% of Larreta’s votes, Bullrich recedes to third place, and Massa grows in the North (Perfíl)
A new poll by Proyección Consultores, conducted between 16-21 September, revealed the following data:
La Libertad Avanza: Javier Milei - Victoria Villarruel: 33.7%
Unión por la Patria (UxP): Sergio Massa - Agustín Rossi: 29.1%
Juntos por el Cambio (JxC): Patricia Bullrich - Luis Petri: 24.2%
Hacemos Nuestro País: Juan Schiaretti - Florencio Randazzo: 2.6%
Frente de Izquierda: Myriam Bregman - Nicolás del Caño: 2.3%
8.1% of respondents were still undecided, and 4.1% indicated they would issue a blank vote
Bullrich has only been able to maintain 60% of former JxC internal rival Horacio Rodríguez Larreta’s votes, with 20% of those votes going instead to libertarian Milei
As of now, the votes of those who did not participate in the PASO primaries but intend to participate in the October 22 elections are spread relatively evenly among the top three candidates
Survey in Buenos Aires Province relegates Javier Milei to second place, raises Massa up, and shows a migration of Bullrich votes (Perfíl)
In the Buenos Aires Province, Economy Minister Sergio Massa polled almost 5 points above Milei
The poll by Proyección Consultores showed Massa earning 31.9% of voter intent, followed by Milei with 26.7%, and with Bullrich earning 23.6%
Axel Kicillof, current UxP governor of Buenos Aires Province, would win reelection with 38% of the votes
Why is a Far-Right Libertarian Surging in Argentina’s Polls? (Latin America Advisor)
“The popularity of the libertarian Javier Milei primarily reflects the unpopularity of the ruling Peronist coalition and frustration with Argentina’s traditional political parties,” writes Benjamin Gedan
Javier Milei targets Argentina’s big cities in bid for first-round win (Buenos Aires Times)
Milei believes he can win Argentina’s election in the first round, by earning more than 45% of the vote
Milei is focusing on the highly populated areas of Buenos Aires City, Buenos Aires province, and Córdoba, over the next few weeks
He will also travel to other provinces he has paid little attention to previously, such as Corrientes and Salta
Sergio Massa targets three million voters with bonus for informal workers (Buenos Aires Times, Buenos Aires Times)
In the latest move under “plan platita” - where the government has announced a series of additional cash bonuses and tax alleviations to appeal to more voters ahead of the elections - Economy Minister and presidential candidate Sergio Massa introduced an almost 100,000 peso (~$250) cash bonus to informal workers
Massa explained the bonus will be financed by an advance extraordinary tax “imposed on firms in the banking and finance sector that have benefitted from the recent devaluation of the peso in the wake of the August 13 primary election”
The cash handout is likely to fuel inflation, which is already at 124%
The measure will also probably further annoy the IMF, which called for Argentina to significantly reduce spending as the country struggles to meet its payments
Mendoza heads to the polls in key election for Juntos por el Cambio (Buenos Aires Herald)
Alfredo Cornejo is running for governor of Mendoza, representing the JxC coalition
JxC has ruled in Mendoza since 2015
“However, although JxC has been the leading coalition in Mendoza for the past eight years, it came second in the August 13 national primary elections with 28% of the vote, while far-right candidate Javier Milei from La Libertad Avanza (LLA) won with almost 45%.”
What’s happening with Argentina’s left, and what options does it have for the presidential elections? (CNN en Español)
Myriam Bregman and Nicolás del Caño, the presidential ticket for the left-wing Frente de Izquierda coalition, won more than the requisite 1.5% of the votes in the PASO primaries and will compete in the presidential elections on October 22
Despite always reaching the requisite voter threshold to reach the presidential elections, the left has never been able to present a significant challenger to compete for the presidency and has little weight with the Argentine electorate
Political analyst Lucas Romero explains that the rise of Peronism - the political movement that represented the working class - impeded the emergence of other competitive and representative left-wing parties
Poverty on electoral agenda as INDEC prepares to release data (Buenos Aires Times)
INDEC, Argentina’s national statistics bureau, is expected to release update poverty data today (Wednesday), the final time this data will be released before the October 22 elections
In the second half of 2022, poverty affected over 39.2% of the population; analysts expect the rate for the first half of 2023 to reach over 40%
Argentina’s Rafael Grossi re-elected as chief of UN nuclear watchdog (Buenos Aires Times)
Rafael Mariano Grossi was reelected as director-general of the International Atomic Energy Agency (IAEA), and will lead the UN agency for another four years
Burford Capital seeks to begin collecting US$16-billion Argentina judgment (Buenos Aires Times)
A recent US court decision ruled that Argentina owes compensation to two YPF shareholders following the country’s appropriation of the energy company in 2012; Argentina will have to pay Buford Capital (which funded the shareholder’s litigation) approximately $6.2 billion
Burford Capital announced it would be requesting permission to attach Argentine assets, given its understanding that Argentina had “no intention” of paying
Argentina has already begun the appeal process for the court’s decision
Economics
Record trade debt: Argentina’s small and medium-sized businesses at risk of default (Buenos Aires Times)
Import debt reached $38 billion
77% of PyMEs (small and medium-sized enterprises, or SMEs) are having difficulties paying their suppliers due to foreign exchange market restrictions
Companies also worry about increases in their debt ahead of probable devaluations, given that companies usually pay their suppliers with dollars that are authorized by the Central Bank
Bullrich adviser says dollar, peso will co-exist in Argentina (Buenos Aires Times)
Bullrich’s top pick for Economy Minister Carlos Melconian assured that Bullrich would seek to implement both the peso and the dollar as legal tenders if she were to win the presidency
How Javier Milei would cut Argentina spending by 14% of GDP (Buenos Aires Times)
Milei’s economic strategy would include cutting subsidies for utility bills and government transfers to poorer provinces
“Previous austerity campaigns, such as one in 2019, only drove the economy further into recession as subsidy cuts fuelled inflation, reducing consumers’ purchasing power as unemployment climbed”
Milei’s specific economic plan to cut spending includes:
Five% of GDP to be cut from federal government transfers to provinces
Two% of GDP to be eliminated by privatizing public works
Five% of GDP to be adjusted in an overhaul of the subsidies program, directing support to the neediest households, rather than companies
One% of GDP to be cut by eliminating privileged retirement packages granted high-ranking government officials
One% of GDP to be reduced by selling or closing unprofitable state-owned companies
Argentina allows oil sector to tap better exchange rate as election looms (Reuters)
Oil firms will be allowed to partially exchange the value of their exports using the alternative CCL rate (~763 pesos per dollar), as opposed to the official exchange rate (350 per dollar)
Cargill, Dreyfus and Cofco Tell Argentina to Loosen Its Grip on Soy (Bloomberg)
Argentina’s various foreign exchange restrictions, compounded by a record drought earlier this year, are causing it to lose ground to rival soy suppliers like Brazil and the US
Lithium + Energy
Atomic energy commissions of Argentina and France sign agreement to renew cooperation (Comisión Nacional de Energía Atómica)
The Comisión Nacional de Energía Atómica (CNEA) of Argentina and the Commissariat à l’Énergie Atomique et aux Énergies Alternatives (CEA) of France renewed their commitment to the “pacifist use of nuclear technology and new energy technologies”
An original cooperation agreement between the two countries was signed in 2010
Lithium Boom in Argentina Hinges on Politics, Zijin Unit Says (Bloomberg)
China’s Zijin Mining Group Co. called upon the incoming administration to “ensure business conditions are ripe for developers” and “shun the unpredictable state interventionism that has dampened growth in several industries”