Javier Milei is the only national leader standing in Argentina, but he is not dominant. The first results trickling in from provincial elections point towards a fragmentation of unprecedented and structural proportions across more than four decades of democracy.
Possibly involuntarily, the President is serving the embattled national political system with a major purpose: order. This is paradoxical, given that the global alt-right – where he belongs – likes to “engineer chaos” into societies. Like it or not, Milei is helping everybody else redefine who they are and what they have to offer to a public that is not willing to listen, given the low turnouts we are witnessing (60 percent on average so far).
Last weekend’s provincial elections in Jujuy, Salta, San Luis, and Chaco show that governors have the upper hand, while at the same time, they are disconnected from national affairs. In recent years, most have been more interested in consolidating their power locally than projecting it out to the rest of the country.
If Milei’s programme of economic regime change succeeds, this could become the norm from now on. A country with less national government intervention would become more federal and would encourage political leaders to grow and develop their own territories rather than seek command of the Casa Rosada in Buenos Aires. At some levels, this is already happening: being the governor of Vaca Muerta (Neuquén) or Jujuy, once the lithium boom becomes a reality, might be a more coveted position than dealing with fiscal deficits and Central Bank balances in the capital of the country.
That, of course, is a long-term vision. Argentina continues to be a centralised country despite its constitutional ambition of being a federal one. The national administration has plenty of influence over provincial finances, given a revenue-sharing distribution system that gives the central governemnt ample discretionary power.
The news in this year’s elections, however, is that provincial governors report to nobody at the national level. None of the two main opposition leaders – former presidents Cristina Fernández de Kirchner on the confrontational left and Mauricio Macri on the more moderate right – are finding ways to influence what happens politically in the north, west, and south of the country. Their influence is now visibly limited to the Buenos Aires metropolitan area: Cristina on the outer side of the General Paz highway (the Conurbano suburbs), and Macri in the capital, where he only hopes not to be crushed by Milei’s rising La Libertad Avanza party in tomorrow’s local elections tomorrow.
This reality means that the re-election in the 2027 election is Milei’s to lose. And the key to losing it would be, as it usually is, the government’s economic performance.
Politically, the inevitable outcome of the October 26 midterms will be that the President will more than double the number of seats he has in Congress – even if La Libertad Avanza only gets, on average, around 30 percent of the votes in the national count. This will give Milei a better chance of assembling the majorities he will need to pass the policies included in the IMF agreement, among them always thorny tax, labour, and pension reforms.
But Milei should be careful. Losing Buenos Aires City tomorrow or Buenos Aires Province in September – and eventually both in the October nationals – only because his government is obsessed with killing Macri instead of talking to the ex-president, would create a scenario in which the Peronist opposition feels empowered after walking away with the country’s two most symbolically charged districts.
The economy will not be a bed of roses for the Milei administration either. The undeniable achievement of having attained a stronger fiscal surplus faster than expected is offset by the fact that the country is (again) piling up debt in hard currency and spending it in the process, on consumer goods and trips abroad due to the peso appreciation that is slowing down inflation (2.8 percent in April was great news for the government after lifting the capital controls and letting the peso partially float).
At a business forum attended by both Milei and Economy Minister Luis Caputo this week, one well-known CEO addressed the elephant in the room and said that “it is now expensive, because of the exchange rate level, to produce in Argentina.” In the medium term, unless corrected, this trend will have more structural consequences – especially for employment, an issue that would feed into the Peronist opposition agenda.
Still, Milei has at hand all the variables that will determine his future. Winning or losing will depend on how he handles them. The more pragmatic and less ideological, the better for him. The signs he is sending go in the opposite direction.
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