“IN PERONISM, YOU always get laid. When Victoria Tolosa Paz, the Peronist who is the government’s leading candidate for the lower house of Congress in the province of Buenos Aires, said in an interview, she found herself with a viral campaign line. But while Ms. Tolosa Paz, an accountant, was happy to talk about sex, she seemed to ignore more serious issues. In a country where annual inflation is over 50% and unemployment in double digits, voters have other concerns. In a nationwide vote on September 12, they marked their disapproval of the ruling coalition, which won fewer votes than the opposition in 17 of the 24 constituencies. Three days later, five ministers offered to resign.
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The vote was technically a primary for congressional elections scheduled for November, midway through the president’s term, when a third of the senators and half of the chamber of deputies will be chosen. In Argentina’s unusual electoral system, however, the primaries function more like the first round of a two-round election. Voting is compulsory and voters are presented with lists of candidates from all registered parties. They select a list for each office to go ahead in the general election. Lists which receive less than 1.5% of the vote in their constituency are excluded. So in addition to touting the pitch, the primary gives an indication of what the outcome of the general election itself is likely to be.
In this week’s vote, even some Peronist strongholds toppled, creating “a sense of a national wave,” said Julio Burdman, director of the Electoral Observatory, a consultancy firm. If the results are repeated in November, the ruling coalition could lose its majority in the Senate as well as a significant number of seats in the Chamber of Deputies. A teary-eyed president Alberto Fernández admitted defeat: “Obviously we haven’t done something right. “
A psephological crystal ball
The results also suggest that the opposition has a good chance of seizing the presidency in 2023. Even though Horacio Rodríguez Larreta, the mayor of Buenos Aires, was not on the ballot, the candidates who played their part link with him have done well. This alludes to his strength within his party, Republican Proposal (PRO), and thus gives him the advantage over his rivals for his leadership such as Mauricio Macri, a former president, and Patricia Bullrich, a former minister. “Larreta has put all his cards on the table,” says Juan Cruz Díaz, the boss of the Cefeidas group, a consultancy firm in Buenos Aires. “And he took the night.”
Other challengers could emerge. Within the opposition coalition, another party, the Radical Civic Union, recorded an increase in votes for its candidates. And Javier Milei, a libertarian economist, garnered 14% of the vote in the city of Buenos Aires. This could force the PRO, a center-right party, to become more to the right.
Investors are hoping that an opposition victory in 2023 could put an end to the current government’s relentless attempts to boost growth through regulation, including currency controls, price freezes and export bans. He also printed money to stimulate the economy, but only succeeded in stimulating inflation, which is the main concern of voters (see chart).
At the start of the pandemic, Fernández said: “I would rather have 10% more poor than 100,000 dead. In the end, Argentina got both. Despite imposing one of the longest and strictest lockdowns in the world, the government has been unable to prevent the spread of covid-19. Last year GDP contracted by almost 10%, more than any major economy in South America except Peru and Venezuela. With more than 110,000 deaths from the virus, Argentina has one of the highest death rates in the world.
Mr. Fernández has also been hit by several scandals. In February, the health minister resigned after it emerged government cronies had been given priority access to vaccines (he said “confusion” in his office was to blame). In August, footage was leaked which showed Mr Fernández hosting an illegal birthday party for his girlfriend Fabiola Yañez during the lockdown. A third of voters said the birthday party scandal would “change or influence” their midterm vote. The president’s approval ratings hover around 30%.
After such dismal results, Fernández will probably find it more difficult to govern. This could strengthen the influence of the radical wing of the coalition led by Cristina Fernández de Kirchner, vice-president and former president (not linked to Mr. Fernández). In March, after a series of diatribes against the judiciary, which is investigating Ms Fernández for various corruption charges (which she denies), the moderate justice minister was replaced by a kirchnerist. Ms. Fernández spoke of “officials who do not serve” and told the president to “put [things in] order ”after the party scandal. The ministers who proposed to resign on September 15 are all loyal to him; their departure could make life more difficult for the president. Some fear other changes in the cabinet, including the departure of Martin Guzmán, the Minister of the Economy.
Such frolics could complicate talks with the IMF, to whom Argentina owes around $ 45 billion. This year, several factors have caused the government to delay reaching an agreement with the fund. He relied, among other things, on a single wealth tax and on the rise in the prices of raw materials, to increase the state coffers and repay part of what he owes. The results of the primaries could also prompt Mr Fernández to use populist tricks to win votes in November. This year, the government expanded gas subsidies and extended beef export limits to keep prices low.
“The main risk is that additional interventionist policies could reach an agreement with the IMF more difficult, ”says Martin Castellano of the Institute of International Finance, a professional association in Washington, CC. It would not be in the interest of the government, which needs an agreement. The high prices of raw materials have not improved the lives of ordinary people much. Meanwhile, even on optimistic government projections, the economy is unlikely to return to its pre-covid size until next year. And Ms. Tolosa Paz appears to have inadvertently but conclusively proven that voters want government content, not gimmicks and slogans.■
This article appeared in the Americas section of the print edition under the title “Front to back”