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Inicio arrow Análisis arrow Argentine Political Outlook (Jul-23-19)

Argentine Political Outlook (Jul-23-19) PDF Imprimir E-Mail
Jul-23-19, por Rosendo Fraga

1. Twenty days to go before the open primaries, the outcome is uncertain, with polls that indicate head to head voting preferences and some edge for the Fernández-Fernández ticket. Greater Buenos Aires is decisive, as has been happening in national elections for decades. It accounts for two thirds of the voters in the province of Buenos Aires, which means 25% of the national electorate. Historically, it has been an area of justicialist predominance, which has sometimes been able to neutralize in the provincial sphere with the vote against Peronism, which predominates in the third of Buenos Aires province votes which are in the third of the provinces. The edge of the FF ticket in the suburbs is important, not only because it influences the national outcome but also defines whether Governor María Eugenia Vidal wins or loses the province. Although the governorship is not at stake, winning or losing has political effects. The average poverty and unemployment in Greater Buenos Aires exceeds the national rates and the recession has affected this area more than in the interior of the province or the rest of the country. So far, Vidal's strategy is for Macri not to participate in the campaign, because the image of the President has its lowest level in the suburbs. 

2. The government and the markets seem willing to present a non-decisive lead of less than 5 points in the outcome of the open primaries in the presidential sphere. In this case, the argument of the ruling party is repeating that in 2015 Cambiemos lost the primaries by 8 points, in the first round it cut this difference to only 2 and that it finally ended up winning by 1.5. But politics is not automatic or mechanical and a difference of several points in favor of the main opposition force can have a different impact on public opinion and individual economic decisions, although most of the media follow the official interpretation. The point is that the ticket headed by Alberto Fernández continues issuing signals that spark concerns and fears, and something similar happens with the candidate for governor of the province of Buenos Aires (Kicillof). In the campaign, the moderate forces of Peronism (governors, anti-K legislators and the CGT) lose prominence and do not affect the discourse of Peronism, homogenized by Kirchnerism. The strategy of the ruling party to mitigate the impact of an FF victory coexists with the strategy to show that her eventual arrival to power is chaotic for Argentina. The problem is that electoral fear is combined with economic fear. 

3. The polarization begins to raise the possibility that some of the tickets approach the 45% necessary to win in the first round. In 2015, the sum of the two main parties (Cambiemos and FPV) reached 68%. Over this percentage, it becomes harder to reverse the difference. But if in 2019, the two most relevant parties, Juntos por el Cambio (Cambiemos) and the Frente para Todos (FPV and allies) added up to 80%, it is possible that the winner gets 42 or 43%, as some surveys show. That is to be 2 or 3 points to win in the first round. This also generates political and economic consequences. It is not the same 5 points of lead over two thirds of the votes, that the same difference over four fifths. In addition, in the open primaries, the percentage is determined including that of the blank vote and on the contrary in the first and second, it is taken only based on the valid votes, that is to say, without counting it. This intensifies the voting lead of the first. Although the law forbids the opening of public works from Friday of last week until August 11 (date of the open primaries), Macri will continue to be present there, along with Larreta or Vidal according to the circumstances. Peña, on the other hand, will deepen their targeting strategy through social media, seeking to capture votes from dissimilar sectors, such as the military and the gay community. Keeping the dollar stable is required for the campaign to succeed. Meanwhile Cristina returned from Cuba and resumed her leading role in the campaign, but still did not solve her central problem: to unify the strategy and speeches between four campaign teams (her own team, plus those of Albero Fernández', Axel Kicillof and Sergio Massa's). 

4. Foreign policy was back on the centerpiece last week with the visit of the US Secretary of State. It is debatable whether Trump's electoral support is positive or not, given his bad image in Argentina (as in the rest of the world). But it is essential to keep the exchange rate calm, without which the ruling party cannot win. The explicit support that Mike Pompeo gave to the Macri Administration has been more than eloquent. He was present the day that commemorated 25 years after the fundamentalist bombing against the AMIA; he held a meeting in Buenos Aires to coordinate the anti-terrorist actions (including Iran as a threat) with the presence of 20 foreign ministers of the region and the Argentine government for its part included Hezbollah - which claimed the attack and the one against the Israeli Embassy two years earlier - in the registry of terrorist organizations and people created for this purpose. Again, the presidents of Brazil, Colombia, Chile and others agreed with the United States. and Argentina in this position. Looking at 2020, the relationship with the Trump Administration - which remains in power all that year, whether or not reelected in November - will be key, as it depends on the US political decision in the IMF. If Macri wins, it is foreseeable that the problems are solved by one way or another, but in case Fernández-Fernández wins, it will not be easy. 

5. To conclude: 

a)  Twenty days to go before the open primaries, polls show some parity or lead by a few points in favor of the Fernandez-Fernandez ticket. 

b)  The government and the market seem willing to understand that a lead below some points of such ticket in the primaries may be reversed, whether in first or second round. 

c)  How far or close both tickets end up from the 45% required to win in first round, will be key. If the first is 2 to 3 points away from such percentage, it will be seen as the winner. 

d)  The support to Macri shown by the US Secretary State last week may not have an electoral impact but contributes to the necessary exchange rate stability for the government to win.

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