The final round in the fight for seats in the Argentinian legislature was fought last Sunday. The solid victory achieved by CAMBIEMOS (translated as Let’s Change), the governing coalition, was a big surprise. At the start of the campaigning process, CAMBIEMOS was already expected to win at a national level, but the support was not expected to be so overwhelming.
The coalition lead by Mauricio Macri, President of Argentina, not only expanded its support in the whole country, but also won over several provinces that had traditionally been held by Peronist parties (populist parties with a strong rhetoric of social justice, based on the policies and ideas of Juan Domingo Peron). At a national level, 41% of votes went to CAMBIEMOS, a percentage not seen since 1982. Most importantly, it won in the key Province of Buenos Aires with 41.4% of votes. Here the senatorial candidate for CAMBIEMOS, Esteban Bullrich, was running a close race against the controversial former President, Cristina Fernandez de Kirchner (the candidate for Unidad Ciudadana).
To understand the importance of the election, it is essential to present a brief overview of the current political and economic context of Argentina. CAMBIEMOS is now well into its second year in office. In 2015, Mauricio Macri defeated Daniel Scioli (Peronist candidate) and became the first non-Peronist President since 2001. He comes from a significantly different background when compared to his predecessors. Since 1983 all former Presidents have been lawyers, while he’s a civil engineer who has strong ties to the business sector, and was elected Mayor of the City of Buenos Aires, position he held for eight years, until his presidential campaign.
Macri took office in 2015, after twelve years of a Peronist government led by the couple Nestor Kirchner and Cristina Fernandez de Kirchner. Their government was characterised by social and populist policies, and high levels of state intervention in the economy. After more than a decade marked by high public spending and corruption, Macri was left in a context of economic stagnation, double digit annual inflation rates, a high primary fiscal deficit, low reserves, exchange rate appreciation, and large amount of subsidies. To tackle this challenge he built up a technocratic administration.
The governing party slowly started implementing steps to put Argentina back on the path towards economic growth by unifying the exchange rate, returning to international markets, fighting inflation by pushing up interest rates and hiking utility prices. These measures were needed in order to tidy up the economy, but led to a very tough 2016. The exchange rate unification, hike in utility tariffs, and primary fiscal deficit led to a rise in inflation (38.4% YoY in December 2016), while this, combined with high interest rates, dragged down economic growth (-2.3% in 2016). Politically, the government had some successes: they approved almost all laws in Congress, they returned to capital markets, the Central Bank was able to build up reserves, and the National Statistics and Census Institute (INDEC) was reorganized and started providing credible statistics.
All in all, 2017 began with hopes of economic recovery, and they were fulfilled. Inflation decreased to 24.2% YoY in September, and the economy grew 2.3% YoY in the second quarter. In this context, the campaign for the mid-term legislative elections started, and the primary and definitive elections took place.
Before the primaries, locally called PASOs (Open, Simultaneous and Mandatory Primary elections), CAMBIEMOS was already expected to win at a national level and consolidate its power. The big fight was centred on the Province of Buenos Aires, especially for the seats in the Senate. For that key district, the main figure running for the opposition was Cristina Fernandez de Kirchner, former President, representing Peronism and populism. Mrs Kirchner was not only controversial due to the social divisions caused by her administration’s policies, but also due to the fact that she was facing on-going judicial investigations. The result of the election would determine whether Argentina was actually changing its course with CAMBIEMOS or if it would return to the policies adopted in the previous 12 years.
The results of the primaries confirmed these pro-change expectations. CAMBIEMOS won at a country level, but the race for the Province of Buenos Aires was tight: Cristina Fernandez de Kirchner won with 34.27% of the votes, against 34.06% for Esteban Bullrich (candidate for CAMBIEMOS).
After the PASO elections, two events (one expected and one unexpected) would stand out and dominate the electoral debate. On the one hand, there was positive news for CAMBIEMOS as various economic indicators started showing much better results. This was becoming evident in the inner Province of Buenos Aires, the main electoral bastion in Argentina.
On the other hand, a quite unexpected event had a negative impact on the ruling party. Right before the primary elections, a riot took place in the Patagonia region. Indigenous communities were claiming lands and the border police was ordered to break this mobilisation. In the context of these events, a local artisan who was supporting the native’s claims, Santiago Maldonado, went missing. Witnesses claimed the police had arrested Mr Maldonado, while the police denied these allegations. It is important to clarify that the figure of a missing person (“Desaparecidos”) has very deep political and discursive connotations in Argentina, as the police and military participated in the arrest and disappearance of 30,000 people during the military dictatorship of 1976-1983. After almost two months of searches, investigation and massive public protests, a body was found in a river near where the riot took place. Two days before the election it was confirmed to belong to Mr Maldonado, with drowning claimed to be the cause of death. The involvement of the police is still uncertain.
Aside from this controversy, a deeper effect has been taking place. The Argentinian society has been undergoing some deep cultural-level changes, and the governing coalition was fast to detect them. CAMBIEMOS understood that speeches about ideology would not help in winning the election. The need was now for a government that was able to listen to people’s everyday concerns and effectively deliver solutions, rhetoric vs. practice. Cristina Fernandez de Kirchner relied on rhetoric. In the end, with this combination of factors, people decided to give a vote of confidence to the government, and give them a more solid base for political decisions and implementation. In the Province of Buenos Aires, Esteban Bullrich won with 41.38%, while Cristina Fernandez obtained 37.25%.
Overall, at the national level CAMBIEMOS obtained 42% of votes. No government had achieved this kind of support in the first parliamentary election since 1982. Still, the governing coalition does not have an absolute majority in either chamber: they will have no keep negotiating with the opposition. In that sense, it is also worth noticing that this election showed the deepness of the divide within the opposition and its lack of clear leadership. On the executive side, with these results in hand, green light has been granted for the administration to continue the reforms. President Macri stated at a press conference on Monday that the government aimed to keep reducing the primary fiscal deficit and reducing inflation. However, the key question is how fast these reforms will take place. Will the government effectively ramp-up the pace for change now it was gained more support, or will it continue to tread carefully and slowly, as it has done for the past two years?
 According to MacroView S.A., official statistics are not available for that period. All other statistics correspond to INDEC and Camara Nacional Electoral
 Proyecto Desaparecidos. http://www.desaparecidos.org/arg/
 Los cambios que entendió Cambiemos, Fernando Laborda. LA NACION. http://www.lanacion.com.ar/2075643-los-cambios-que-entendio-cambiemos
Lucia Perez Alfaro is a first year MPA student, originally from Argentina. She received an Economics degree from Universidad Torcuato Di Tella. Before starting her graduate studies, Lucia worked as a macroeconomic consultant at MacroView S.A. in Argentina.