Argentina Politics Update - 4 October 2023
Reactions following first presidential debate, economic boom for local brokerage firms, gas exports to Chile resume after 17 years
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Politics
Argentina’s presidential candidates go head-to-head in debate (Buenos Aires Times)
The debate centered on the economy, education, and human rights
Milei adopted and maintained a measured tone during the debate, in contrast with his usual outbursts, though his quasi-denial of the military dictatorship in the 70s and 80s drew sharp criticism
Massa withstood opposition attacks better than expected, even going so far as to apologize for the government’s economic policy mistakes
Presidential debate in Argentina: Who won? Who lost? (CNN en Español)
Four political analysts offer their opinions on the presidential debate, all with the general consensus that neither Myriam Bregman nor Juan Schiaretti played enough of a role to alter the electoral playing field
Milei’s denialist claims during the presidential debate met with ample rejection (Buenos Aires Herald)
During the debate, Milei claimed that “there weren’t 30,000 [disappeared], there were 8,753” during the country’s military dictatorship between 1976-1983
Milei also equated the actions of the military dictatorship to those of the armed guerilla groups of the time
Human rights groups, government officials, and members across all opposition coalitions including UxP and Juntos por el Cambio (JxC) rejected Milei’s statements, with JxC opposition candidate Patricia Bullrich saying Milei “went too far”
Javier Milei’s team wobbles on candidate's toughest proposals (Buenos Aires Times)
The closer libertarian candidate Javier Milei gets to the Casa Rosada, the more he and his advisors seem to be moving away from some of his main hard-line proposals, including federal revenue-sharing, eliminating trade unions, implementing educational vouchers, and even dollarization, among others
In Argentina, election fight brews over women's rights and abortion (Reuters)
Milei and Bullrich have both claimed that, if elected, they would close the country’s Ministry of Women, Gender, and Diversity
Milei also personally opposes abortion and has said he would host a referendum to potentially repeal the 2020 law that legalized the procedure
Leftist candidate Myriam Bregman, who has little chance of winning the election, said, “The Milei phenomenon is not just an ultra-right movement. It is a patriarchal reaction against all the advances women in Argentina have had."
Milei’s support is over 60% male, despite having some high-profile women on his team
2030 Centennial World Cup to be held in Argentina, Paraguay, and Uruguay (Twitter, Olé)
Alejandro Dominguez, head of the South American soccer bloc CONMEBOL, announced today that Argentina, along with Paraguay and Uruguay, were confirmed as the hosts for the inaugural games of the 2023 Centennial World Cup tournament
The rest of the tournament would be held in Morocco, Spain, and Portugal
Top Buenos Aires Province official Martín Insaurralde resigns after luxury trip ends in scandal (Buenos Aires Times)
Buenos Aires Cabinet Chief Martín Insaurralde, who was also running for a councilor seat in the city of Lomas de Zamora, resigned from his post and dropped his candidacy
Insaurralde is a veteran Kirchnerite and represents the Unión por la Patria (UxP) ruling coalition
Insaurralde is now facing charges for “illicit enrichment” following the publication of social media posts by his model girlfriend showing high-end designer “gifts” she received while vacationing on a luxury yacht off the coast of Marbella
It is likely the scandal will reverberate throughout the rest of the electoral process and impact Economy Minister and UxP presidential candidate Sergio Massa’s campaign
Economics
Does Argentina need a Digital Peso? (Perfíl)
During Sunday’s presidential debate, Massa declared that, if elected, he would implement the creation of a central bank digital currency (CBDC)
Argentina has a strong informal economy, making widespread adoption of a CBDC difficult
A digital peso would represent the same value as the physical peso, making it unlikely to serve as a tool to combat inflation or to alter currency currently in circulation
Private study says food prices in Argentina surged almost 13% in September (Buenos Aires Times)
A new report by Focus Market consultancy firm found that the prices of some staple items such as sugar increased over 280% over the past year
The products with the highest price increases since August were: mashed potatoes, wines, eggs, tinned fish, snacks, bleach, sweeteners, tea, beauty soap, and salt
Rice and sugar were among the top products with the highest year-to-year increase
Argentines’ love of dollars creates a windfall for local brokers (Buenos Aires Times)
Local brokerages are experiencing a significant boom at odds with the rest of the financial industry
“Because the country limits dollar purchases in an effort to keep hard currency in, savers turn to brokerages that carry out complicated transactions known as the blue-chip swap to get their dollars. And that’s a lucrative business.”
“Transaction volumes tied to the blue-chip swap have doubled this year to about US$100 million a day in stocks and bonds”
Argentina to End Income Tax as Election Spending Spurs Inflation (Bloomberg)
Income taxes on almost all formal workers are on track to be permanently eliminated, following congressional approval of the bill pushed forward by Massa
It is possible for the measure to be revoked, as a new administration is set to take office on December 10
IMF delivers rare public rebuke to Massa over cash handouts (Buenos Aires Times)
The IMF criticized the Argentine government’s increased spending in recent weeks, saying that “The recently adopted policy measures and announcements add to Argentina’s challenges.”
Massa has been implementing various measures that include subsidies, tax exemptions, and cash handouts in a move that critics say is meant to shore up votes ahead of the elections
All of Argentina’s dollar exchange rates, explained (Buenos Aires Herald)
The Herald provides an overview of Argentina’s various exchange rates, from the Qatar dollar to the Coldplay dollar
Lithium + Energy
Argentina Seeks to Tax Lithium Boom to Avoid Region’s Resource Curse (Bloomberg)
Provincial and federal officials are considering implementing a quote of up to 20% of lithium output to be kept for domestic battery projects, as well as imposing an annual tax on lithium production profits that would then be put towards infrastructure projects
The specific quota would be negotiated individually with producers, rather than being a blanket policy, according to the Mining Ministry
Argentina once again to export gas to Chile via Norandino Pipeline (Más Energía)
Argentine gas exports to Chile until April 2024 were confirmed by Energy Minister Flavia Royon
It will be the first time in 17 years that Argentina exports gas to Chile
In 2022, natural gas was Argentina’s principal export product to Chile, for $688 million
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