Argentina Politics Update - 9 August 2023
Upcoming PASO primary elections, impending currency devaluation, rare JxC moment of unity
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This Sunday, August 13, will be the country’s PASO primary elections. The results will determine the final candidates for the presidential elections, to be held on October 22. If no candidate wins a majority during the October race, a runoff election will be held on November 19.
Politics
Argentina’s Ruling Peronists Await Defeat in Sunday Primary (Wall Street Journal)
Polls are showing that Argentines are likely to vote for a more pro-business candidate than someone from the ruling Peronist movement
“If the center-right candidate wins this time around, the government will be forced to move much faster in implementing reforms to lift currency controls and cut the deficit,” says Pablo Guidotti, economist at the Torcuato di Tella University
A good election to lose? (Buenos Aires Times)
The winners of the election will be met with a mountain of external debt, a very divided Congress, and a disgruntled electorate
Opinion polls, already historically unreliable, differ widely and fail to offer clarity on how the PASO primaries will turn out
This will be the third actually competitive primary since Argentina’s return to democracy in 1983
Punctuated equilibrium and the PASO conundrum (Buenos Aires Times)
The percentage of votes that Milei will win is important, because the majority of those votes will likely be drawn from the Juntos por el Cambio (JxC) opposition coalition, therefore impacting the race between opposition candidates Buenos Aires city mayor Horacrio Rodríguez Larreta and former security minister Patricia Bullrich
Social leader Juan Grabois, who will be running against Massa for the ruling Unión por la Patria (UP) coalition, “has no real chances of winning but manages to attract an important portion of the Peronist vote which would have a much harder time voting Massa than the left, or even Milei.”
The outcome of the PASO, including the expected levels of high voter absenteeism, will have effects on Argentine politics much beyond immediate election results
Argentina begins to elect its next president (El País)
The PASO primaries are the first part of a two- or three-part election cycle in Argentina, given the country’s mandatory voting laws
General elections will be held on October 22, with a potential runoff election to be held on November 19
White flag in JxC: Larreta and Bullrich to wait for primary results together (Buenos Aires Times)
In a show of unity, JxC opposition candidates, who have strongly lashed out against each other in past weeks, will await for final PASO results together in a location not yet confirmed
Ruling coalition ramps up rhetoric as primaries draw closer (Buenos Aires Times)
Current president Alberto Fernández, who is not running for reelection, drew attention to the opposition’s lack of proposals for moving the country forward and claimed that the opposition was using his administration’s successes to propel their own campaigns
Libertarian presidential hopeful Javier Milei closes campaign in 'rockstar' style (Buenos Aires Times)
Just days ahead of the PASO primary elections, Milei espoused his “anti-establishment” rhetoric at his final campaign rally with hard rock music
Juan Grabois: ‘Challenges enthuse me – we represent something which is not represented’ (Buenos Aires Times)
An interview with social leader Juan Grabois, who is challenging Sergio Massa for the UP candidacy, outlined the internal discussions among the Peronist base ahead of defining candidacies, his reasons for running an improbable campaign against Massa, and the role of vice president Cristina Fernández de Kirchner
Economics
Argentina’s entrance into the BRICS is complicated, and Alberto does not confirm if he will travel to South Africa (Cronista)
It is increasingly likely that the topics of discussion for the next BRICS (Brazil, Russia, India, China, and South Africa) meeting will not cover the topic of Argentina’s inclusion into the trade bloc, also lowering the possibility of its Development Bank offering the country any loans in the near future
China, Brazil, and India have all previously pronounced support for Argentina’s inclusion in the BRICS
Argentine markets brace for 20% currency devaluation after primary vote (Buenos Aires Times)
“Futures currency contracts in the local market were pricing the peso at 329 per dollar by the end of August earlier this week, compared with an official rate of 277 per dollar,” with the current blue-dollar exchange rate currently at 596
The economy is also expected to fall into a sharp recession in the coming months
The outcome of the PASO elections, primarily Sergio Massa’s results, will impact the credibility of ongoing negotiations with the IMF ahead of the country’s general elections in October
Argentina’s next president is on a collision course with hyperinflation (Bloomberg)
“Three of the four top contenders in the August 13 primaries, which play a key role in deciding who runs the country, hail from parties that have tried and failed to stabilize Argentina’s crisis-prone economy over the past decade.”
A sharp currency devaluation is expected by the next administration, if not earlier, which could cause Argentina to fall into a situation of hyperinflation
The great squeeze is already underway (Buenos Aires Times)
The next administration will have to significantly decrease public spending, as Argentina desperately continues to try and maintain the little currency it still has left, causing presidential candidates to carefully measure their promises to citizens
Argentina Gets $775 Million Loan From Qatar to Repay IMF (Bloomberg)
Argentina will repay the loan once the IMF approves a $7.5 billion disbursement
The loan from Qatar is the latest in “a series of unconventional measures” the country has taken in order to repay its debts
Inflation in Buenos Aires City hit 7.3% in July, up 118% over past year (Buenos Aires Times)
Prices in Buenos Aires City increased 62.3% from January to June of this year
Lithium + Energy
First lithium battery plant in Argentina to open in September (Buenos Aires Herald)
State company Y-TEC’s goal is for 50% of each battery to be locally produced
A second plant - five times bigger than the factory set to open in September in La Plata - will be located in Santiago del Estero and will open in 2024
Argentina aims to become “the country that provides batteries to the region” and hopes to capitalize on strategic advantages in comparison to its neighbors, such as already having a car manufacturing industry
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