Argentina heads for presidential runoff

After Oct 22 poll fails to yield a winner, voters face tough choice amid mounting economic woes

As they head to a runoff vote for president next month, Argentinians worried about their economic prospects will have to choose between two very different visions of the future.

Voters will decide between Sergio Massa, a lawyer and current minister of economy, and Javier Milei, a congressman and maverick economist, on Nov 19. During a first round of elections on Oct 22, Massa beat expectations by taking the most votes in a race Milei had been favored to win thanks to a populist message of radical economic reforms that include dismantling the country’s central bank and dollarizing the economy.

“Why has the economy been the theme of this campaign? Mainly because it is what affects the entire Argentinean population, and above all it is the most sensitive point,” Salvador Vitelli, an analyst and chief researcher at Romano Group, an economic and financial consultancy firm in Argentina, told China Daily.

“High inflation is nationwide, the devaluation of the domestic currency is nationwide, and so on. So, this undoubtedly generates the most attention and that is also where the focus has been placed,” Vitelli said, noting that Milei was able to tap into all this anxiety in speeches and messaging to quickly rise in the polls and popularity to the point of having a real shot at becoming the next president.

Milei has also leveraged an image as being a change from the existing political cast and status quo discourse, “which ultimately ended up seducing voters who are outraged and even disappointed with traditional politics,” Vitelli said.

“It will undoubtedly be a challenge for whichever candidate wins to fix or try to solve this problem we are immersed in, without too much social cost, without plunging more people into poverty,” the analyst said.

Argentina’s central bank has negative net reserves of around $8 billion, and payments to the International Monetary Fund (IMF) are due. Inflation is at levels not seen since the hyperinflation of the 1980s and 1990s while the peso is trading at about a third of where it was a year ago to the US dollar.

That the election is going to a runoff was not in itself surprising, since Massa and Milei were running a tight race, but Massa’s strong showing surprised observers.

Massa, 51, is a moderate and an establishment figure who has served on President Alberto Fernandez’s cabinet since 2022. He took a little more than 36 percent of the vote with promises of fostering growth and paying off the country’s $44 billion in external debt to the IMF.

“I will call for a government of national unity with the best, and regardless of their political strength,” Massa said on Oct 22, after acknowledging the election results.

Milei, 52, is a libertarian economist and an outsider who promised radical change to the political class. He earned 30 percent of the vote. His proposals include slashing government spending, dollarizing the economy, and abolishing the central bank.

“I will leave every drop of blood behind. I die with my boots on. I do not surrender,” Milei told local media on Oct 23.

Pollsters had expected Milei to win the Oct 22 vote and some even suggested he could have won the election outright, which would have required attaining 45 percent of the vote.

In distant third place was Patricia Bullrich, a conservative who may throw her support behind Milei.

“Milei has had a campaign that has spread essentially through social networks. Since he was a national deputy, he had the brilliant idea of raffling his salary every month, which gave him enormous visibility, and also for many, many years he has been a participant in radio and television programs where he simply raises the ratings,” said Miguel Boggiano, CEO and chief investment officer at Carta Financiera, a web portal that tracks Argentina’s economy.

“The economic discussion was very important, and this was also noticeable in the presidential debate, because the central issue of the campaign is inflation. We have accumulated inflation of 140 percent in the last 12 months, so the economic issue is exclusive,” Boggiano told China Daily.