The campaign ended sloppily, with candidates responding to both major coalitions appealing to basic concepts tied to things like sexual intercourse and marijuana in order to “appeal to the youth vote” – that these PASO primaries laid bare the intellectual vacuity of Argentina’s political class is obvious, yet there are a few underlying fundamental forces at play that should be put in context.
First and foremost, the market has clearly put its eggs in one basket, rallying aggressively on expectations of a bad election for the ruling Frente de Todos coalition led by President Alberto Fernández and his VP, Cristina Fernández de Kirchner. The Merval stock market index is up more than 25 percent since August, well above the rate of inflation, making it one of the best performing equity markets in the world. On the flip side, a bad election by the opposition coalition, Juntos, could generate tension in the markets. All of this, of course, in the context of a perilous economic situation that has led to increased pressure on the black-market exchange rate and the Central Bank’s reserves, which have haemorrhaged aggressively as of late. This has once again pitted Economy Minister Martín Guzmán against Central Bank President Miguel Ángel Pesce, both of whom suggest the Casa Rosada’s blunders are the main driving force, but still throw darts at each other.
All of that being said, the outlook for Argentina’s economy until the end of the year are relatively positive. GDP could expand more than 7.5 percent (from a 9.9 percent decline in 2020) while forward indicators suggest a rebound with some momentum in areas like the industrial sector and construction. Guzmán, though, remains cautious, reportedly factoring in 3.5 percent growth for 2022 and inflation in the 34 percent range. His projections, though, rely on an end to the pandemic and extraordinary expenditure, closing a good deal with the International Monetary Fund and the setting in motion of a rational plan to balance the macroeconomic variables. Good luck!
All of those things rely on governability, which either means controlling both chambers of Congress or being able to negotiate deals with the opposition. Whatever the outcome of the actual election in November, the conditions for a political agreement between government and opposition seem to have been laid to waste. During the campaign, both coalitions relied on ad hominem attacks against the leading figures from the other side, with Mauricio Macri and Horacio Rodríguez Larreta the main targets on one and Alberto and Cristina serving the same role on the other. Furthermore, this deep-seated rift between the two major political factions has given rise to a growing sentiment of disengagement, distrust and all-out anger against the political class. Pollsters have reported increased difficulty in getting people to answer their calls and surveys, angered by being even involved in political processes. Projecting their decision at the ballot box is almost impossible, as are the number of blank votes and no-shows — don’t forget the pandemic.
Yet this has also given rise to a certain extremism that has been brewing for quite some time, but that sector could find its actual popular support this time around. The far-right liberals seem to have been the big winners of the anti-system game, which appears to be a global phenomenon. But it is also happening within the two, large, opposing coalitions too. Within the ruling Frente de Todos it is represented by the Kirchnerism loyal to Mrs. Fernández de Kirchner; in the opposition, via hawks responding to Macri and Patricia Bullrich. Internal tensions among the leading political coalitions and the rise of anti-party candidates could make Congress truly ungovernable.
There is no fixed pattern as to the effect of the PASO primaries on the real election (i.e. in November), but there are no doubts that it has an impact. The government will do everything in its power to revert a bad election, from cabinet shake-ups to further economic stimulus despite piling up further dangerous imbalances. At the centre of this circumstance is the relationship between Alberto and his second-in--command, which is no doubt tense but also the child of necessity. Both of them, and Peronism more broadly, need to remain united if they are to have a chance of re-election in 2023.
Juntos has it a bit easier, though, as leaving the PASO primaries behind will allow the coalition to rally behind its finalised candidates. The struggle to avoid battling each other has been real, even averting a public debate in the Buenos Aires Province, where the “mother of all battles” is being fought. From a tactical perspective they will join forces and try and beat the Peronists on their home turf once again. Strategically, though, the emergence of Rodríguez Larreta as leader and aspirer to the 2023 candidacy has generated internal tension both with the Civic Radical Union (UCR) and with Macri, who is thought to be looking for another go at the Casa Rosada.
There will be two months between the PASO and the actual midterm elections. It will feel both real short and an eternity at the same time. The underlying structural trends will continue to play out, with an empty-minded game between Frente de Todos and Juntos giving rise to further disenfranchisement, both in the direction of fringe parties and against the system in general. All of that within the backdrop of a moderate improvement in the economic situation of a weary population but a deterioration of the macroeconomic variables that will intensify its strain on the overall economic structure of the country. November will be time for sloppy seconds, and further exhaustion from the population.