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Latin American risk Report: Argentina – State of the race six months out from the election (April 25, 2023)

A deep political divide, combined with extreme political infighting, has left Argentina’s major coalitions without clear candidates just six months ahead of the October 22 presidential elections

A shop displays on a sheet of paper unofficial currency exchange rates in Buenos Aires, Argentina, Wednesday, April 26, 2023.
A shop displays on a sheet of paper unofficial currency exchange rates in Buenos Aires, Argentina, Wednesday, April 26, 2023. (AP/Natacha Pisarenko)

In Argentina’s presidential election, just six months away, we know who is likely to lose but not who is likely to win. The economic and political situation strongly leans against a victory for the ruling Peronist coalition. Ever-rising inflation, a crashing peso, a prolonged drought, and growing poverty have caused extreme disillusion with the government. Political infighting will only increase following President Alberto Fernández’s announcement that he will not run for reelection. However, the state of the race is otherwise quite undefined, with no obvious candidate in a favorable position to win and the potential candidacy of Javier Milei fragmenting the opposition.

As a reminder, Argentina essentially has a three round presidential election. The country’s PASO primary elections scheduled to be held on August 13 are designed to demonstrate which way voters are leaning. They also serve as the primary elections for the parties, though this may be the first time in Argentina’s brief history with this system that the PASO actually decides the candidates. In all previous elections, the parties knew their candidates ahead of the PASO and the primary served as a glorified and mandatory election poll.

The results of the PASO can impact the election climate. In 2019, a strong performance by Fernández caused markets to crash, increasing the anti-incumbent environment, placing further pressure on the Macri government, and likely harming his chances to come back later in the general election. In 2023, markets will react to however the PASO turns out, which raises the odds for a political or economic crisis in the months between the primary and the election.

The general election will be held on October 22. If no candidate receives more than 50% of the vote in the first round, the top two candidates will face off in a run-off election on November 19. 

The Analogías political consultancy firm published a recent survey in which the ruling Frente de Todos coalition, the opposition Juntos por el Cambio coalition, and Milei’s Libertad Avanza party all tied in the election’s first round. The narrow margin of error, combined with high counts of undecided voters, point to the very real potential for electoral surprises.  

Frente de Todos state of play

Six months ago, the conventional wisdom was that if inflation declined and the economy stabilized, Economy Minister Sergio Massa would be a strong presidential candidate for the ruling party. This week, there are rumors that Massa is leaving his government post and has little hope of running. FdT is unlikely to be able to count on a bounceback from the economy. With inflation over 100% and the unofficial ‘blue dollar’ rate hitting 438 pesos to 1 dollar last week and 484 as of this morning, the population is clearly unhappy with the current situation. 

One challenge right now is that the ruling party is losing both the center and its base. The ruling party is bound to lose some of the centrist vote given the mismanagement of the Covid-19 pandemic, high profile corruption scandals, and soaring inflation. A $44 billion deal with the IMF in March 2022 also angered parts of the coalition’s base, who were adamant that Argentina not negotiate with the multilateral organization. The electoral impact of the administration’s continued conversations with the IMF is still unclear, as Argentina wants to renegotiate its targets due to the effects of a record drought and dwindling reserves. 

Current president Alberto Fernández announced last Friday that he would not be running for reelection, though his consistently low approval ratings suggested he was never going to be a viable candidate in the first place. 

Former president and current vice president Cristina Fernández de Kirchner (no relation to Alberto) has also taken herself out of the running given her ongoing role in the Vialidad corruption case. If the corruption charges hold, they will earn her a lifetime ban on holding public office. Despite being the head of the coalition, Cristina recognizes she is a polarizing figure and is unlikely to deliver another Peronist win in this year’s elections. 

With no clear candidate, significant political infighting has contributed to uncertainty about who the coalition candidate would be, though the general consensus remains that the coalition would arrive to the PASO as a unified front behind a single candidate. 

Among the candidates who might run are Interior Minister Eduardo “Wado” de Pedro, Maximo Kirchner (the son of Cristina), Daniel Scioli, and Axel Kicillof. Of the group, all of whom have some fairly extreme economic policy decisions in their background, Kicillof, the current governor of Buenos Aires, is probably viewed as the most moderate and acceptable to the median voter, having worked hard to separate his image from the more extreme elements of the coalition. However, in an election where the governing party is already losing, their best chance may be a counter-intuitive push to have a more polarizing candidate in Maximo Kirchner aim to drive the base to the polls. Kirchner, for his part, is hinting he will not run because the environment is so tough for any ruling party candidate that he doesn’t want to risk what may be one and only chance at the highest office.

Juntos por el Cambio state of play

Former president Mauricio Macri announced he would not be seeking another term in office, and has pledged his support to PRO party leader and former security minister Patricia Bullrich. Buenos Aires City mayor Horacio Rodriguez Larreta is the other key candidate vying for the JxC primary vote. 

Both candidates have strengthened their right-leaning talking points in recent weeks to contend with Javier Milei’s increasing popularity, Bullrich’s hard-line stances are giving her a significant edge in the polls as compared to the more moderate Larreta’s coalition-building rhetoric. However, analysts doubt her ability to rally enough support in the general election while Larreta is seen as a favorite in almost any second round matchup. 

One wildcard Bullrich retains in her favor is a Bukele-like hardline stance on security. While the economy is clearly the top issue for Argentine voters, security concerns have risen and voters are likely to turn towards a candidate who promises mano dura. That would probably be enough to put her over the top in a second round against almost any candidate.

There has been important internal debate over whether or not the coalition would seek to incorporate Milei into their campaign and government, in an attempt to ensure their votes are not split with the Libertad Avanza candidate. The two remain separate for the moment, and Milei has rejected any proposal to join the coalition.

Javier Milei

Extreme right-wing candidate Javier Milei has grown increasingly popular, siphoning voter intentions from both FdT and JxC, as the electorate, particularly young people (16 – 29 year olds), flock to the libertarian political outsider and his non-traditional views. As the economy worsens, Milei’s “dollarization” proposal and his rhetoric of eliminating the “caste” of career politicians are contributing to his growing popularity. Many voters are shrugging off his more extreme libertarian proposals (markets for human organs?!) as just absurdities rather than serious policy discussions.

Milei will definitely draw votes away from the JxC coalition, to which he is most ideologically similar. He benefits from an overall level of anger at the political system, not just the government. He has already forced the JxC candidates to move to the right in their statements in an effort to retain votes. 

However, his popularity also seems to extend across party lines. For example, though Peronism maintains a stronghold in the Conurbano – the middle and lower class neighborhoods found outside the city of Buenos Aires – “despite the fact that Milei doesn’t have a candidate in the province just yet, his hypothetical choice took 16.6 percent” in the polls

In spite of significant international media coverage and positive polling, Milei is not the favorite to win the election. He can win a sizable minority of the vote, enough to have influence in Congress and potentially be a part of a governing coalition. But it’s not clear he would be acceptable to a majority of the population in a second round vote. It would take a shift in the electorate for him to win a majority. It’s not impossible, but it’s also not where the electorate is right now.

The big question is what happens if the first round vote splits in a way that Milei somehow ends up in a runoff against a Peronist candidate. That would become a far more polarizing and decisive election than 2015 or 2019 which would leave markets hanging on the edge.


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