Argentina Politics Update - 30 August 2023
Milei clashes with Pope Francis, BRICS ascension in doubt, Massa's new policies
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Politics
The ‘false prophet’ v the pope: Argentina faces clash of ideologies in election (Guardian)
Libertarian presidential candidate Javier “Milei has trolled [Pope] Francis with repetitive toxic tweets calling him a ‘communist turd’, a ‘piece of sh*t’ and accusing the pontiff of ‘preaching communism to the world’,” in addition to calling him “a f**cking communist” and “the representative of evil on earth”
Milei, touted a “false prophet” by left-wing social leader Juan Grabois, has become an outlet for those who have been hit particularly hard by the country’s current economic crisis and want change
The Pope has warned against the rise of the extreme right in his native Argentina, calling it “the triumph of selfishness over communitarianism.”
Trump-admiring libertarian’s surprise primary win upends Argentina (Washington Post)
Immediately following the PASO primaries, Argentines ran to supermarkets to buy nonperishable items and to fill up their gas tanks, expecting a swift currency devaluation in the coming days
In Argentina, scattered looting portends ugly election race as inflation bites (Reuters)
Increased looting of supermarkets and other stores, in light of increasing inflation and consumer prices, is reminiscent of the 2001 economic crisis, which saw a significant part of the population unable to buy basic necessities
All presidential candidates have denounced the violence, though some have blamed Milei of promoting the attacks to “destabilize” the country
Rumours and confirmations: Javier Milei assesses potential cabinet options (Buenos Aires Times)
If elected, one of Milei’s first measures will be to eliminate various ministries, keeping only eight out of the current 16 ministries
Milei has allegedly already chosen his Economy Minister but has given no indication as to whom it might be, stating only that it is “somebody as orthodox as me”
Sandra Petrovello is the candidate Milei has chosen to potentially lead his proposed Human Capital Ministry, despite her lack of managerial experience and her aversion to public interviews
Economist Diana Mondino would lead the Foreign Ministry, already familiar with toning down some of Milei’s more extreme international relations rhetoric during the campaign
The Interior Ministry would be led by economist Guillermo Francos, formerly Argentina’s representative at the Inter-American Development Bank (IDB)
Milei’s running-mate Victoria Villarruel is in charge of determining the candidates for the Security and Defense Ministries
Four theses about Javier Milei (Buenos Aires Times)
Author Agustino Fontevecchia notes four misconceptions about Milei:
“Argentina’s socio-political mainstream lacks the sociological and cognitive frameworks to understand Milei, leading them to chastise him – to his electoral benefit” - he is vastly different from the mainstream Buenos Aires elites
Milei’s domination of social media over the other candidates has led to many acting as if he has already won the election
Despite Milei’s “crazy” features, he will still need to operate within the bounds of Argentina’s institutions, therefore establishing clearer guidelines than expected
Opposition coalition Juntos por el Cambio (JxC) has been “paralyzed” by Milei’s PASO results, and are unable to decide whether to move further right to capture more of Milei’s voters or more to the center to capture Economy Minister and Unión por la Patria (UxP) presidential candidate Sergio Massa’s votes
“In the age of near total smartphone and Internet penetration, Milei has proven that a viral phenomenon is more powerful than the traditional party structures that supposedly guarantee the vote throughout the nation.”
Milei – melee or millennial? (Buenos Aires Times)
“Would a Milei presidency stagger into the melee of a collision course between drastic reform and vested interests or would it finally take Argentina into this millennium on the back of a new commodity boom put to wiser use?” asks Michael Soltys
The other presidential candidates were relatively mum over the past week, with Sergio Massa mostly in the United States in his role as Economy Minister and Patricia Bullrich of the JxC opposition carrying out focus groups to best define her strategy in the coming weeks
Sergio Massa embarks on post-PASO search for votes (Buenos Aires Times)
Massa has added three US consultants to his campaign strategy team that have previously advised the Democratic party and former president Barack Obama
Massa’s campaign is allegedly following a strategy in which he reaches the second-round runoff elections and will face off against Javier Milei
Council of the Americas: Massa lambasts Milei’s proposals (Buenos Aires Herald)
Massa strongly criticized Milei’s plan for dollarization, questioning “Where are the dollars for dollarization going to come from? Does anyone really believe that there are hedge funds that signed non-disclosure agreements with a candidate to guarantee dollarization?”
He also criticized Milei’s plans to cut ties with the Mercosur trade bloc and with China, two of Argentina’s biggest trading partners
Argentina’s BRICS membership in doubt as opposition rejects move (Buenos Aires Times)
Both Javier Milei and Patricia Bullrich immediately declared that if elected, they would not join the BRICS economic bloc
Milei touted he would not trade with “communist” nations, while Bullrich declared she would not enter any bloc alongside Iran
Though Argentina’s acceptance to BRICS has already been approved by the bloc, ascension would not take place until January 1 of next year; by that time, Argentina would have already elected and sworn in its next president
How BRICS Expansion Will Impact South America (Americas Quarterly)
“Argentine business elites, keen to preserve amicable ties to Beijing, are likely to pressure them [Bullrich and Milei] to avoid antagonizing the Chinese government at a moment when the Argentine economy is extremely vulnerable,” opines Oliver Stuenkel
If Argentina were to join BRICS, it would impact the country’s foreign policy strategies and decisions as it finds itself between the traditional Western bloc and a Sino-Russian bloc
Economics
Argentina Lifts Wages, Welfare in Defiance of IMF Austerity Push (Bloomberg)
Economy Minister and presidential candidate Sergio Massa announced various government measures including tax breaks, higher pensions payments, and financing for export products, among others, in defiance of an IMF request that the government spend less
It is likely these new measures are in response to Massa’s lukewarm results in the PASO primary elections earlier this month, as he seeks to gain voters who have flocked to Milei
Exclusive: Argentina to use IMF money to pay back part of a currency swap with China, sources say (Reuters)
$1.7 billion of the IMF’s recent disbursement of $7.5 billion will be used to pay back China
The IMF disbursement will also allow Argentina to pay back $1 billion to the Latin American Development Bank (CAF) and $775 million to Qatar
Argentina's Milei will need time to scrap peso if he wins, advisers say (Reuters)
Dollarization would be expected to take anywhere between nine months to two years
The Milei campaign has also promised to cut taxes on grain exports, though no timeline has been proposed
Milei’s campaign, as well as his advisors, have already indicated that they would bypass Congress - given the likelihood of them not reaching a Congressional majority - through executive decrees, plebiscites, and “all of the alternatives that are laid out in the law and the national constitution”
As inflation soars, Argentines say they've seen this film before (Reuters)
Skyrocketing inflation has left “four-in-10 people in poverty as prices have risen faster than wages, leading to a cost-of-living crisis and stoking anger on the streets,” writes Lucila Sigal
Older generations feel the current economic and political crisis is reminiscent of those in the 1980s, 2001, and even 2015
Argentina's Central Bank sees monthly inflation spiking above 10% (Buenos Aires Times)
Consumer prices in August are expected to increase at least 10.6% from the previous month; private economists project an even higher rate, between 10.8% - 13%
In July, inflation had reached 6.3%
The jump in inflation was caused by the government’s 18% devaluation of the peso, which occurred earlier this month
Lithium + Energy
The indigenous groups fighting against the quest for 'white gold' (BBC)
Residents of Argentina’s northern province of Jujuy - where much of the country’s lithium reserves are found - feel that their way of life is threatened by the lithium industry, fearing that lithium extraction is drying the soil and polluting the water necessary for their lifestyle of living off the land
Indigenous groups are marching towards Buenos Aires and establishing roadblocks to lithium mines to protest the industry’s expansion without regard to their territory or their lifestyle
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