On the 22nd of October 2023, General Elections will be held in Argentina. This includes apart from elections for the President, elections for 22 Governors of Provinces, 130 Deputies, and 24 Senators. If no Presidential Candidate achieves 45 percent of the total votes polled, or at least 40 percent, while maintaining a 10-percentage point lead over the second-placed candidate, a run-off will be held on the 19th of November 2023. On the 13th of August 2023, primaries were held, narrowing the number of final candidates for the scheduled elections. The Primaries are also known as PASO (Primarias, Abiertas, Simultaneas y Obligatorias) in Argentina and were established in 2009. Candidates must obtain at least 1.5 percent of the total votes polled to qualify for the main elections while voting is compulsory for citizens between the age of 18 to 70.
Argentina has a multi-party system with two dominant coalitions. The Unión por la Patria[i] (UP) coalition which is composed of Peronist and Kirchnerist parties, currently with President Alberto Fernández at the helm. The main opposition is led by the Juntos por Cambio[ii] (JxC) coalition which has a Right-wing outlook. A third coalition known as the La Libertad Avanza[iii] (LLA) has emerged and is mostly made up of libertarian parties that seek to minimise the role of the government.
For the Primaries, five prominent candidates from different coalitions contested and laid out proposals to address various challenges. From within the UP coalition, the contest was between current Economy Minister Sergio Massa and Juan Grabois.
While from the JxC coalition Horacio Larreta, the Mayor of Buenos Aires and Patricia Bullrich, Former Security Minister contested in the Primaries. Javier Milei, Federal Deputy of Buenos Aires contested from the LLA. It is also important to note that, President Alberto Fernández has ruled himself out from contesting for a second term[iv], as have Vice-President Cristina Fernández de Kirchner from the UP coalition and former President Mauricio Macri from the JxC coalition.
The three main contenders for the elections who emerged after the Primaries were conducted are Economy Minister Sergio Massa of the UP coalition, Patricia Bullrich of the JxC coalition, and Javier Milei from the LLA coalition. The results from the Primaries exhibit a trend towards conservatism with Javier Milei from the LLA coalition getting 30.4 percent[v] of the total votes polled and emerging as the frontrunner. Patricia Bullrich from the JxC coalition followed closely receiving 28.7 percent[vi] of the vote share. The ruling UP coalition led by Economy Minister Sergio Massa received 27.7 percent[vii] of votes. The Primaries also resulted in the elimination of Juan Grabois from the UP coalition and Horacio Larreta from the JxC coalition.
The elections are taking place at a time when the country’s economy is struggling. Showing a negative sentiment, the Primaries triggered a devaluation of the Peso by 18 percent[viii] and a hike in benchmark interest rates from 97 percent to 118 percent leading to further increase in commodity prices. Apart from financial issues, anti-incumbency and a gradual shift towards conservative voices are discernible.
This paper will discuss the upcoming elections keeping in view the current situation and will look into the various candidates post-Primaries and their proposals.
Background of the upcoming elections
Argentina is facing unprecedented levels of inflation which is around 114 percent leading to reduced purchasing power and shortage of commodities. The crisis started in 2018 during the Macri Presidency when due to the Peso losing its value the administration sought a US $ 57 billion loan[ix] from the International Monetary Fund (IMF). Despite obtaining the loan, the economy failed to stabilise. The Fernández Presidency which came to power in 2019 had to deal with the effects of the pandemic and the Russia-Ukraine issue which added to the already present financial problems.
Argentina witnessed protests and social unrest in 2022[x] over rising prices of fuel and other essential commodities leading to slow economic growth. To tide over the situation, a new US $ 44 billion[xi] loan arrangement with the IMF was arrived at in March 2022 which enables the disbursement of funds over a 30-month period subject to stringent conditionalities. The arrangement seeks to improve public finance, reduce inflation, boost currency reserve, improve the value of the Peso for which multi-pronged strategies to instill fiscal discipline is required. Government has to meet key yardsticks such as lowering fiscal deficit and reducing public spending which may become politically unappealing prior to elections in a country where the rate of poverty is hovering at 40 percent[xii]. In case of inability to meet targets set by the IMF, it could risk defaulting on its loan commitments which can cause further financial woes.
To complicate the delicate situation, the country suffered from a severe drought[xiii] in 2023 which plummeted its crop production by almost half and exports by a quarter causing less inflow of revenue. With cash reserves being as low as US $33 billion in May 2023[xiv] the financial health is worrisome. The primary concern of voters is lowering inflation, creating opportunities for employment, and better access to public services.
Candidates in the Primaries and their Views
Unión por la Patria Coalition (UP)
Economy Minister Sergio Massa is the official candidate from the ruling coalition who holds a Ministerial portfolio. With the support of President Alberto Fernández, he has been instrumental in working out the US $ 44 billion loan arrangement with the IMF[xv] for its debt restructuring programme which has so far prevented the country from defaulting. The arrangement however, led to development of political fissures[xvi] within the ruling coalition between President Alberto Fernández and Vice-President Cristina Fernández de Kirchner[xvii]. Economy Minister Sergio Massa, despite such differences, has adopted approaches to address economic challenges. He facilitated the disbursement of loans from the Inter-American Development Bank (IADB) to boost crop production. He introduced price-freezing in respect to essential commodities[xviii]. However, there are challenges such as reining in inflation within manageable limits, restoring the purchasing power of the Argentine Peso, and incentivising investments in industries. In August 2023, the IMF and the Argentine government reached an agreement for the disbursal of US $ 7.5 billion[xix] as a part of the US $ 44 billion loan plan[xx]. The Minister also announced that the World Bank and the IADB have approved loans[xxi] worth US $ 1.3 billion[xxii] for economic development.
Juntos por Cambio Coalition (JxC)
Former Security Minister Patricia Bullrich promises tougher security measures to combat crime and drug trafficking. Regarding the economy, she promised simultaneous use of the Argentinean Peso and the US Dollar in addition to seeking cooperation within the Mercosur and a reduction in taxes.[xxiii] Her economic views call for rapid and sharp structural reforms. She has called for a “Tax Revolution”[xxiv] separating taxes from products and services and further simplification of the tax structure. Additionally, she seeks to downsize state structures to reduce government spending. She proposes to transform Social Support Programmes into unemployment insurance with a fixed term and mandatory training. The objective would be to create a pool of workers who would slowly be absorbed in the economy, thus ending dependency on monetary support from the government.
La Libertad Avanza Coalition (LLA)
Javier Milei from the LLA coalition proposed dollarization of the economy which would lead to gradual replacement of the Peso with the US Dollar given the Peso’s depreciating value. He also called for privatising state companies which are incurring losses, cuts in social spending, and reducing restrictions on trade. His proposals aim for a “comprehensive reform” to reduce public spending and deficit while encouraging the entry of private capital and a reduced role of the government in certain sectors such as education and health.[xxv] Although the LLA coalition yet does not have a strong national presence, Milei’s proposals have gained support from certain sections of the population, which disagree with the two main coalitions and seek quick reforms. Post-Primaries, Javier Milei stated his intentions to slash spending by 13 percent of the GDP before mid-2025, in addition to reducing public works, number of ministries and removing capital subsidies[xxvi]. He would continue with his plan of dollarizing the economy and allow businesses to be conducted in US dollars. He also stated his intent to pull out Argentina from the Mercosur and freeze relations with China if elected as President[xxvii].
Understanding the Result of the Primaries
The results of the Primaries have now led to a three-way contest with Javier Milei of the LLA coalition emerging with the highest vote share, followed by Patricia Bullrich of the JxC coalition signalling a trend towards conservatism and anti-incumbency. Despite Javier Milei’s victory in the Primaries which highlights voter dissatisfaction with traditional coalitions, his party’s limited national presence[xxviii] may become a challenge for his prospects in the elections, as Congressional support would be critical for policy implementation if elected. Voter preference for Patricia Bullrich exhibits preference for structural and security reforms and given her administrative experience coupled with adequate presence in the Argentine Congress, it may aid her addressing challenges from the UP and LLA coalitions.
With incumbent Economy Minister Sergio Massa of the UP coalition placed third in the Primaries it highlights voter dissatisfaction with the current administration. Although Economy Minister Massa has been able to achieve an arrangement with the IMF in order to tide over the economic crisis, adherence to stringent conditionalities of the IMF and remaining steadfast on the administration’s socio-economic obligations is challenging.
A struggling economy and anti-incumbency are critical aspects of the upcoming elections. The absence of formidable and erstwhile office holders including President Alberto Fernández has opened up opportunities for new faces in the electoral fray. For the ruling coalition led by Economy Minister Sergio Massa, prospects appear to have dimmed coupled with the huge task of addressing persistent economic challenges. Considering the shift towards conservatism as shown by the results of the primaries the prospects of Patricia Bullrich and Javier Milei seem to be stronger.
For the JxC coalition, presenting lucrative alternatives to edge out the ruling UP coalition, and emerge as a better alternative to the LLA coalition are clinical to attract voters. Being the main opposition coalition, the JxC has the necessary electoral strength. On the other hand, Javier Milei leading the LLA coalition has emerged as a frontrunner in the Primaries and has capitalised on anti-establishment sentiments. Even then, he has to contest against two traditional coalitions and lacks adequate electoral representation in Congress which could turn out to be challenging in swaying voters. Nevertheless, Javier Milei’s performance in the Primaries highlights the dissatisfaction of the electorate with the traditional coalitions.
*Dr. Arnab Chakrabarty is a Research Fellow at the Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal.
[i] Unión por la Patria or Homeland Union is made up of populist parties which is ideologically inclined towards the Left. It was known as Frente de Todos or Everybody’s Front and changed its name on 15th June 2023. It is mainly constituted by the Justicialist Party, Renewal Front and others. It broadly follows ideological positions laid out by former Argentine President Juan Domingo Perón, Néstor Kirchner and Cristina Fernández de Kirchner.
[ii] Juntos por Cambio or Together for Change is a coalition made up of liberal and conservative parties made up of Republican Proposal, Radical Civic Union, Civic Coalition ARI and others. The coalition was founded in 2015 as Cambiemos (Let’s Change) and thereafter renamed in 2019.
[iii] La Libertad Avanza or Liberty Advances is a coalition that was founded in 2021 in Buenos Aires and is made up of the Conservative Peoples’ Party, Democratic Party and others.
[iv] Lucia Sigal. (21st April 2023). Argentine President Fernandez pulls out of 2023 election. Reuters. Accessed 3rd June 2023. https://www.reuters.com/world/americas/argentinas-president-fernandez-says-will-not-stand-2023-elections-2023-04-21/.
[v] Javier Milei of the LLA coalition received 7116352 votes.
[vi] Patricia Bullrich of the JxC coalition received 4022466 votes.
[vii] Economy Minister Sergio Massa from the UP coalition received 5070104 votes.
[viii] Mary McDougall & Ciara Nugent. (15th August 2023). Argentina’s markets recoil after shock primary election results. Financial Times. Accessed 17th August 2023. https://www.ft.com/content/df45cf2a-5b51-4d13-bc93-500c07c7d73f.
[ix] Patrick Gillespie. (6th April 2023). Why Argentina’s Inflation is up over 100% again. The Washington Post. Accessed 5th June 2023. https://www.washingtonpost.com/business/2023/04/06/why-70-inflation-is-just-one-of-argentina-s-problems-quicktake/0d56242a-d499-11ed-ac8b-cd7da05168e9_story.html
[x] Eliana Raszewski. (30th June 2022). In Argentina, farm groups call for trade halt to protest government. Reuters. Accessed 4th June 2023. https://www.reuters.com/world/americas/argentina-farm-groups-call-trade-halt-protest-government-2022-06-29/.
[xi] IMF. (25th March 2022). IMF Executive Board approves 30-month US $44 billion Extended Arrangement for Argentina and concludes 2022 Article IV Consultation. International Monetary Fund. Accessed 5th June 2023. https://www.imf.org/en/News/Articles/2022/03/25/pr2289-argentina-imf-exec-board-approves-extended-arrangement-concludes-2022-article-iv-consultation.
[xii] BA Times. (30th March 2023). INDEC: Poverty rose in second half of 2022, affecting 39.2 % of Argentina’s population. Buenos Aires Times. Accessed 6th June 2023). https://www.batimes.com.ar/news/argentina/indec-poverty-affected-392-of-argentinas-population-in-second-half-of-2022.phtml.
[xiii] Lucia Sigal & Eliana Raszewski. (10th March 2023). Argentina’s ‘unprecedented’ drought pummels farmers and economy. Reuters. Accessed 4th June 2023. https://www.reuters.com/business/environment/argentinas-unprecedented-drought-pummels-farmers-economy-2023-03-09/.
[xiv] Banco Central de la República Argentina. (31st May 2023). Argentina: International Reserves/ Foreign Currency Liquidity. BCRA. Accessed 23rd June 2023. https://www.bcra.gob.ar/Pdfs/PublicacionesEstadisticas/itemp0523.pdf.
[xv] IMF. (12th September 2022). IMF Argentina Massa. International Monetary Fund Media Centre. Accessed 4th June 2023. https://mediacenter.imf.org/news/imf-argentina-massa/s/9673d6a5-c098-4f1b-8a35-a7e9c75dd816.
[xvi] The US$ 44 billion arrangement was opposed by Vice-President Cristina Fernández de Kirchner who held the IMF culpable for perpetuating Argentina’s economic crisis leading to denial of financial autonomy. In contrast the Argentinean President defended it, terming it necessary to prevent a default. Opposing views led to widening of differences between the two political personalities.
[xvii] Lucinda Elliott & Eliana Raszewski. (26th May 2023). Argentina VP says IMF hinders growth in Revolution Day speech. Reuters. Accessed 13th June 2023. https://www.reuters.com/world/americas/argentina-vp-says-imf-hinders-growth-revolution-day-speech-2023-05-25/.
[xviii] María Esperanza Casullo. (17TH November 2022). 100 Days of Sergio Massa’s Balancing Act. Americas Quarterly. Accessed 4th June 2023. https://www.americasquarterly.org/article/100-days-of-sergio-massas-balancing-act/.
[xix] The amount of US $ 7.5 billion has been released by the IMF after conducting the fifth and sixth review and the total amount disbursed so far is US $ 36 billion.
[xx] Jason Lange. (23rd August 2023). Argentina’s Massa expects IMF board OK for $ 7.5 bln payout. Reuters. Accessed 23RD August 2023. https://www.reuters.com/world/americas/argentinas-massa-expects-imf-board-ok-75-bln-payout-2023-08-22/.
[xxi] Buenos Aires Times. (22nd August 2023). Sergio Massa announces US$ 1.3 billion in funding from Inter-American Development Bank, World Bank. Accessed 23rd August 2023. https://www.batimes.com.ar/news/economy/massa-announces-us13-billion-in-funding-from-inter-american-development-bank-world-bank.phtml.
[xxii] The loans from the World Bank are divided into US$ 450 million for food security and US$ 200 million for supporting small and medium size businesses, while the loan from the IADB amounts to US$ 650 million to finance infrastructure.
[xxiii] El Cronista. (29th October 2022). Patricia Bullrich anunció que hará en las elecciones 2023. Accessed 5th June 2023. https://www.cronista.com/economia-politica/patricia-bullrich-confirmo-que-hara-en-las-elecciones-2023/.
[xxiv] Lucas Mammana. (1st September 2022). Patricia Bullrich presentó su plan económico y se postuló como candidata para 2023. Politica Hoy. Accessed 5th June 2023. https://politicahoy.com/elecciones/patricia-bullrich-presento-su-plan-economico-y-se-postulo-como-candidata-para-2023-20229117400.
[xxv] El Economista. (17th May 2023). Milei presenta su plan para Argentina. Accessed 5th June 2023. https://eleconomista.com.ar/politica/milei-presenta-su-plan-argentina-n62500.
[xxvi] Buenos Airea Times. (17th August 2023). Javier Milei promises Argentina can be saved with liberatarian economics. Accessed 20th August 2023. https://batimes.com.ar/news/economy/milei-promises-argentina-can-be-saved-with-libertarian-economics.phtml.
[xxvii] Buenos Aires Times. (16TH August 2023). Milei says he’d reject ‘assasin’China, take Argentina out of Mercosur. Accessed 20th August 2023. https://batimes.com.ar/news/economy/argentinas-milei-says-hed-reject-assassin-china-leave-mercosur.phtml.
[xxviii] As of 2019 Javier Milei’s party has two seats in the Chamber of Deputies out of 257 seats and none in the Senate.