Argentina Politics Update - 5 July 2023
Larreta vs Bullrich fight heats up, IMF payment made in Chinese yuan, plans for lithium battery production
Politics
Horacio Rodríguez Larreta’s three key proposals to seek Argentina’s presidency (CNN en Español)
The Buenos Aires City mayor is seen as the “moderate” choice within the Juntos por el Cambio (JxC) opposition coalition, and is aiming to differentiate himself from the coalition’s more hawkish candidate, former security minister Patricia Bullrich
Larreta’s plan is based on three pillars:
Education
Subsidies will have educational and laboral prerequisites
Guarantee internet connection in all schools
Labor
Larreta aims to “modernize the labor system” and ease labor relations
Decreasing penalties for informal labor and extending an employees’ “test period” from three to six months
Possibility of involvement by security forces to intervene in labor strikes, which he sees as “extorsion mechanisms”
Security
The use of the gendarmerie in the fight against narcotrafficking
Strengthening of the police forces
Sparks fly as Rodríguez Larreta, Bullrich kick off opposition primary campaigns (Buenos Aires Times, Buenos Aires Herald, Infobae)
Buenos Aires City Mayor Horacio Rodríguez Larreta and former security minister Patricia Bullrich exchanged heavy-handed blows over the past week, with Larreta accusing Bullrich of following former president Mauricio Macri’s “failed” model and Bullrich calling Larreta an “opportunist”
Larreta has proclaimed that if he were to win the election, Bullrich and former president Mauricio Macri would be invited have a place in his government
Influential political members of the JxC coalition publicly took sides, supporting one of the two candidates
Bullrich proclaimed that “[political agreements] are a form of submission,” a direct attack on Larreta who continues to seek cross-party alliances
Backstabbing and cursing your way onto the ticket (Buenos Aires Times)
Agustino Fontevecchia provides a comprehensive overview of Massa’s rise to the Peronist presidential ticket, taking into account the “backstabbing” of candidates Eduardo “Wado” de Pedro and Daniel Scioli, who were forced to revoke their candidacies following Massa’s announcement
It is possible that Massa’s candidacy - which represents a marked ideological difference from traditional Kirchnerite candidates - could benefit Cristina Fernández de Kirchner (CFK) in the long run, “pinning the responsibility of defeat on a non-Kirchnerite leader of the pan-Peronist front while allowing her and son Máximo to say their candidate is Juan Grabois, the young leader of the social movements who espouses a leftist ideology that is much closer to their heart.”
The “PASO primaries could end up being more influential than the actual vote”
Elecciones 2023 Argentina: ¿cuántos diputados y senadores se eligen y en qué provincias? (Bloomberg Línea)
130 of the Chamber of Deputy’s 257 seats will be up for election in October, as well as 24 of the 72 Senate seats
The ruling Unión por la Patria (UxP) coalition will have 68 deputy seats up for grabs; the Juntos por el Cambio (JxC) coalition parties will have a total of 49 seats up for grabs, with PRO aiming for 24, Unión Cívica Radical with 18, and Coalición Cívica with 7
The article also outlines how many seats are allotted per each of the country’s provinces
Alberto Fernández shows off support for Sergio Massa at Mercosur summit (Buenos Aires Times)
Economy Minister and presidential candidate Sergio Massa was intentionally seated to Fernández’s left during the summit, a show of high support from the current president
Massa was well-received by various regional presidents (and incoming presidents), including Brazil’s Lula, Paraguay’s Santiago Peña, and Uruguay’s Lacalle-Pou
Sergio Massa and Agustín Rossi receive support from ruling governors and give space to Wado de Pedro in the campaign (La Nación)
Massa and Rossi will meet today with the ruling party’s governors, and invited Interior Minister Eduardo “Wado” de Pedro to join in a show of reaching all branches of the pan-Peronist coalition
Opposition triumphs in San Juan governor race, ending 20 years of Peronist rule (Buenos Aires Times)
Marcelo Orrego of the Unidos por San Juan party (belonging to the JxC opposition coalition), won the San Juan governorship comfortably after the Supreme Court disallowed Peronist Sergio Uñac’s reelection bid
This opposition win “breaks the recent trend of incumbent wins in provincial voting”
Milei’s candidate once again came in third with only 3.78% of the vote, continuing a clear downward trend for libertarian support
Massa-Rossi: Unión por la Patria’s unexpected unity formula (Buenos Aires Times)
Current president Alberto Fernández put forward his own chief of staff Agustín Rossi as vice president on the ticket alongside Massa, and also negotiated the inclusion of Foreign Minister Santiago Cafiero and Social Development Minister Victoria Tolosa Paz in Congress during the next administration
Neither former candidates Daniel Scioli nor Eduardo “Wado” de Pedro have announced public support for the Massa-Rossi ticket
De Pedro will be running for a Senate seat in the Buenos Aires province, alongside Toloza Paz
Some Kirchnerite leaders have expressed opposition to the ruling party’s proposed ticket, and it is likely this discontent will only grow in the weeks leading up to the PASO primaries
“In this space, the one who stays is the one who pays”: Milei’s explanation in response to the allegations of selling candidacies (Infobae)
Libertarian candidate Javier Milei has been accused of selling spots on his party list in return for political support ahead of the election
Milei insists that everyone involved in his campaign does so with their own money and conviction, in contrast to traditional politicians who finance their campaigns with the taxes paid by citizens
Various politicians, including some members of Milei’s own party, have questioned the origins of some of his campaign’s finances
Economics
Are we close to a EU-Mercosur trade agreement? (Buenos Aires Times, Buenos Aires Times, El Diario Ar, Buenos Aires Herald)
In 2019, after two decades of negotiations, Mercosur countries Argentina, Brazil, Paraguay, and Uruguay reached an agreement with the EU; now, the EU has requested additional environmental standards be included in the deal, which Mercosur countries find “unacceptable”
Alberto Fernández stated “No one can condemn us to be just raw material providers,” citing objection to the EU’s added “side letter”
Brazil, Argentina, and Paraguay signed a statement following the summit with the notable exclusion of Uruguay, given Uruguayan president Lacalle-Pou’s differing stance that Mercosur members should be allowed to negotiate trade agreements individually, without the bloc
Two supporters of the deal, Brazil and Spain, will take over the presidencies of their respective regional institutions; the European Parliament and a new EU Commission will be elected next year, meaning if a deal is not reached beforehand, negotiations will need to begin anew
The deal consists of three pillars: trade, political dialogue, and cooperation
Negotiations have been stalled over issues including climate change, labor rights, and sustainable development
“The failure of the agreement would be a failure of diplomacy, with the efforts of more than 20 years of negotiations lost,” writes Alejandro Perotti
Argentina's opposition warns against lifting FX controls suddenly (Buenos Aires Times)
Larreta’s economy advisor warned against lifting currency controls without a plan in place, believing the move would cause “chaos”
Libertarian presidential candidate Javier Milei also warned against the effects of lifting currency controls overnight, explaining that that could create hyperinflation almost instantaneously
Argentina to make US$2.7-billion as IMF negotiations continue (Buenos Aires Times)
No dollars were used to make the payment; $1.9 billion of the total sum were in special drawing rights, and the rest of the funds were paid in Chinese yuan
“Paying the IMF in Chinese currency is highly unusual and reflects the lack of liquidity in Central Bank reserves”
Central Bank reserves are estimated to be below $31 billion following the latest payment
Argentina also owes an additional $1.3 billion in July
Argentina’s business leaders expect devaluation in December, no matter who wins (Buenos Aires Times, Buenos Aires Times)
It is widely understood that Argentina’s new government will need to implement a stabilization plan and create a method to establish the real price of the dollar (as opposed to having multiple parallel exchange rates), and that this plan will result in the peso’s devaluation regardless of who takes office
Many of the country’s top business leaders support Massa’s bid for the presidency
Head of Synopsis Consultores polling firm Lucas Romero believes that CFK’s “support for Massa and her allies on his ticket will only hinder a pro-market reform agenda,” and that Massa is likely to encounter “similar infighting over economic strategy that President Alberto Fernández struggled with for much of his presidency.”
Drought slashes Argentina’s soybean production by 51.5% (Buenos Aires Times)
The historic drought afflicting the country resulted in Argentina’s lowest soybean production since 2000
It is estimated that the drought will have caused the country to lose about $20 billion, or about 3% of GDP
Two industry groups found that “the grain and oilseed sector lost 42 percent of exports in the first half of 2023, compared to the same period the preceding year”
Prior to the drought, Argentina was the world’s third-largest producer of soybeans, behind the US and Brazil
Lithium + Energy
Argentina to buy lithium from Livent for battery production (Buenos Aires Times)
Argentina is seeking control over more parts of the lithium value chain, aiming to begin producing cells and batteries in the region’s first development plant, says the Mining Secretariat
Argentina to Begin Lithium Battery Production in Sept (Batteries News)
A new plant will begin operations in September, and will use lithium from mining company Livent to produce the batteries
Glencore In Talks to Back Argentina Lithium Plant for Future Supply (BNN Bloomberg)
Glencore would invest in the plant in exchange for future supplies of lithium
Specifics of the deal have not yet been announced
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