Javier Milei’s successful battle against inflation in Argentina has become his key political asset ahead of this year’s consequential midterm elections, scheduled for October 26. It has also opened the door for other preoccupations to enter into voters’ minds – from unemployment to insecurity, along with concerns about a weakening of democratic institutions. In this context, and with a worrying stalling of the economy, a recent poll by AtlasIntel showed that corruption had become the main problem for Argentines, with 38.9 percent of respondents expressing their concern.
The survey, held as the corruption scandal involving leaked audio recordings of ANDIS national disability agency ex-director Diego Spagnuolo unfolded, had previously put corruption as the major problem for most respondents back in March, just after the ‘$LIBRA’ cryptocurrency scandal broke. The Spagnuolo affair directly links to Karina Milei, the President’s sister and chief-of-staff, as well as Lower House Speaker Martín Menem and his cousin, Eduardo ‘Lule’ Menem, with alleged corrupt practices in the purchases of medicine destined for the disabled just as the Milei administration is slashing emergency funds for the marginalised group. Given that Karina and her brother are essentially joined at the hip – as the President has stressed through the years – the political impact of the Spagnuolo affair directly hits at him as well. Indeed, the AtlasIntel poll shows that Milei’s disapproval figures have increased for three consecutive months to 51.1 percent – the worst reading of his presidency. Under half, 46.4 percent of those polled, believe the government is doing a bad job, compared to 35.8 percent who said it was doing a good job and another 16.9 percent who considered it “regular.”
All of these figures become extremely relevant as the local elections in Buenos Aires Province, scheduled for September 7, near. Milei and his libertarians broke onto Argentina’s political scene by denouncing the vices of the “caste” that used and abused the state apparatus to their own benefit, while leaving the population increasingly worse-off. Even before Milei inhabited the presidential residence in the swanky Olivos neighbourhood, accusations of corruption bulked large. There was consistent talk of candidacies for sale, particularly in districts far from Buenos Aires City, where Milei was headquartered. One former member of La Libertad Avanza coalition from the ‘Conurbano’ ring of municipalities that surround the capital noted that paying for candidacies is a standard practice in domestic politics, sometimes as a last-minute extortion where the fee size was determined by a contributor’s personal wealth. Women were often asked for sexual favours too, the former libertarian added.
From day one, Javier has constantly explained that sister Karina was in charge of his personal finances, which explains why after every corruption scandal, she is put in the spotlight instead of her brother. Milei benefits from a sort of ascetic personality in the mind of the population, not preoccupied with earthly vicissitudes such as money and politics, more focused in the ethereal world of economic ideas. This electoral season, with the President directly involved in the campaign in both Buenos Aires City and Buenos Aires Province, shows that that perception is at least partially flawed. Can the same thing be said about his relationship with money? According to investigative reporter Rodis Recalt of Noticias magazine, while Karina seems fixed on personal wealth, Javier has a preference for evasion.
The series of corruption scandals engulfing the government are attractive from a journalistic point of view. They are seemingly pornographic, with Spagnuolo’s leaked audios coming in waves, almost like the release of new episodes in a Netflix series. They come off the back of the fentanyl case that led to the deaths of an estimated 122 people from contaminated drugs distributed by HLB Pharma Group, owned by Ariel García Furfaro, who has been arrested. Not long before that, businessman Leonardo Scatturice was in the eye of the storm after an employee of his, Laura Belen Arrieta, was found to have smuggled 10 pieces of luggage from the United States on a private jet thought to contain spurious objects, be it dirty money or tools for espionage. Before that, the focus was on the Menem family again for their companies and multiple contracts with official government dependencies. ‘$LIBRA’ occurred earlier this year as well. It seems as if the Milei administration, which snatched a surprise electoral victory in 2023 by defeating the two major political coalitions that had controlled the country for two decades, has been participating in the “caste-like” behaviour it was mandated by its voters to eradicate. All of this also occurs in the midst of a civil war between controversial political advisor, Santiago Caputo, and Karina, who relies on the Menems to be her personal operators. All of them are under suspicion – and are suspicious of each other.
But that wasn’t the only mandate society gave Javier Milei. He was also entrusted with reviving Argentina’s moribund economy. The first step in that direction was to defeat inflation, something the libertarian government has greatly achieved, at least according to society’s perception: concerns about it went from 50 percent in January to 28.5 percent in August, according to the aforementioned poll. With a population so scarred by chronic inflation, lowering consumer price hikes from annual triple digits to lower double digits may seem like an end in itself, but it is actually a path toward a process of economic growth. That’s why – despite the substantial improvement in inflation – 43 percent believe their economic situation is bad and will worsen over the next six months. Concerns about unemployment have seen a surge since April, while worries about the economic situation have increased over the past three months.
The economic plan crafted by Milei and Economy Minister Luis ‘Toto’ Caputo has run into some serious headwinds as investor confidence has weakened, together with the real economy. The administration, which enjoys the support of the International Monetary Fund, has been unable to accumulate Central Bank reserves while trying to keep the peso-dollar exchange rate at bay. There was widespread agreement that the peso was artificially overvalued, leading to market tensions that saw a substantial devaluation in July. More is expected after the national elections on October 26. At the same time, unforced errors such as the disarming of the Lefi liquidity notes — a decision Caputo pins individually on Milei — has wrecked havoc on the market, pushing the government to rely on extremely high interest rates and increasing statutory bank reserve requirements that have accelerated the economic slowdown. The EMAE economic output index put out by the INDEC national statistics bureau (considered a sort of monthly GPD tracker) has gone down in four out of the last five months after correcting for seasonal factors, with further downward pressure expected. Real wages have struggled to keep up with inflation as purchasing power has dropped below levels from December 2023, according to the government’s Labour Secretariat, while the economy continues to shed jobs and small and medium-sized firms are shutting down.
The President’s anarcho-libertarian dream is on the line in this year’s elections. He remains the country’s most popular politician, with a 46 percent approval rate, but remains in negative territory (52 percent negative opinions). AtlasIntel has his La Libertad Avanza coalition leading the polls for the national midterms – 39.8 percent said they’d vote for Milei’s candidates, compared to 33.5 percent for the Peronist Fuerza Patria, which includes both Cristina Fernández de Kirchner and Axel Kicillof’s candidates. But things could quickly change. The aforementioned and unnamed member of LLA indicates that in upcoming provincial elections, local political organisers will mobilise their voters and the pan-Peronist coalition could beat LLA by as much as 30 percentage points. While that sounds a bit extreme, he notes that within the Casa Rosada, they don’t seem to be interested in engaging in local politics, relying only on propping up the figure of the President. The Peronists run a tight ship with a clear goal: defending their turf.
The ultimate maxim, though, is that people vote “with their pockets.” If the economy continues to deteriorate, Milei will have a tough time going into the national elections – and corruption will remain top of mind for the electorate.
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