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Argentina Decides

Argentina Decides

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With campaigning having been ramped up in recent days towards this Sunday's (October 25th) presidential elections, we ask how the leading candidates are positioned as Argentina prepares to go to the polls.

The polls, although as reliable as the economic statistics that emanate from the country, have recently indicated that Daniel Scioli (from the ruling Frente para la Victoria party) is close to winning 40 percent of the votes and leads the opposition Mauricio Macri by more than 10 points. These figures would allow Scioli to achieve a first round victory and avoid a dangerous runoff with his closest rival (Mauricio Macri) in November. Candidates need at least 45% of the vote, or 40% plus a 10-point winning margin to win in the first round. Scioli enjoyed a healthy victory in Argentina's presidential primaries in August, a key indicator of voter's intentions in October, with 38% of the vote but the unpredictability of a runoff gives opposition candidates enough reason to believe that they have a good chance of taking office on December 10th.

Support for Scioli

Support for Scioli has surged over the last 6 months after being endorsed by President Kirchner as the official candidate for the ruling party, which guarantees a loyal base of voters. The departing president enjoys solid approval ratings, especially when compared to the populist Presidencies of Argentina's neighbouring countries. This is largely the result of expansionist policies set out by her government in the months leading up to the election. The battle for a potential runoff spot is also helping Scioli edge towards a first round victory as both Macri and Sergio Massa are having to fight their campaigns on two fronts. Support has grown for Sergio Massa at the expense of opposition frontrunner Mauricio Macri as the dissident peronist appeals to middle ground voters who distrust Macri and have painful memories of the 2001 economic crash that followed the neoliberal policies in the 1990s.

Policy announcements

Ahead of the election, candidates have remained tight-lipped with regard to providing details of fiscal, monetary and public policy changes but have given indicators of their stance on certain issues.

Daniel Scioli, FvP (Frente para la Victoria)

It is very difficult to judge what line of action Scioli will take if he wins the presidency. Since appointing Carlos Zanini as his running mate (Zanini is a close aide to President Cristina Fernandez de Kirchner and was seen by critics as a condition to gain the presidents backing), Scioli has adopted a continuing populist stance and has revealed very little of the 'gradual changes' that he has intimated are being planned. Whether this is simply to strengthen his chance of winning in the first round of voting by appealing to both Fernandez and her loyal voter base remains to be seen; however attention should be given to some of the more nuanced comments of his closest advisors who have acted as mouthpieces for Scioli:

  • Defended central bank currency controls as being key to avoid devaluation but will likely relax these restrictions gradually
  • Committed to attract US$30bn of investment to develop energy system, agricultural sector, sustainable mining, and science and technology.
  • Construction of 1 million new homes in four years
  • Increase investment in science and technology to 1 percent of GDP from 0.6 percent
  • Mauricio Macri, (Cambiemos)

    In light of the growing support towards Massa, the main opposition candidate- Macri has toned down his radicalism in favour of more gradual changes:

  • Inflation to be lowered single digits
  • Currency controls removed on his first day in office
  • Reforming the national statistics agency
  • Devolving powers and funds to Provincial states
  • Gradually eliminating transport and utility subsidies
  • Sergio Massa, (Frente Renovador)

    Sergio Massa, the third presidential candidate and former cabinet chief for President Kirchner, has looked to position himself between the policies of his two opposing rivals:

  • Promises economic growth of 5 percent for 4 years with a zero-deficit in the last year
  • End currency controls within 100 days
  • Credit for first time home buyers
  • Scrap export quotas on grains
  • Abolish income tax for workers
  • Lower the average citizen's tax burden to 30 percent of Gross Domestic Product (GDP)
  • Sovereign Debt Repayment

    Negotiating with the 'vulture' funds is not a priority for Scioli but he has recently stated that "Argentina has the will and ability to pay". All candidates recognize the need of meeting these obligations to allow Argentina to access external money markets desperately needed by the economy but have had to manage their statements around the politically dangerous issue carefully.

    Predictions

    The elections certainly gives Argentina a choice in ideals, but whether candidates stick to their initial premises will largely depend on investor confidence in their reforms. It will require a fine political balancing act to appeal to both international and local interests.

    We predict that the election with will go to a runoff between Scioli and Macri, with the ruling party continuing another 4 years as Macri fails to attract enough of Massa's voters. Scioli's decision in playing safe and refusing to attend the first ever presidential debate on October 4th was attacked by other candidates, but will likely have little effect on voter's intentions. What this means for Argentina will depend on Scioli's ability and desire to break away from 'Kirchnerismo' populist policies. Scioli will have little room to manoeuvre politically to implement a new wave of reforms as high ranking ministerial and legislative positions have been tactically filled with Kirchner allies. This will likely keep any moderate economic reforms in check for what could be, a return to office in 2019 for Cristina Kirchner.

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