Radical populist attacks Argentina’s ‘criminal’ government before presidential run-off
Harriet Barber
Mon, 23 October 2023
Mr Milei has appealed to voters with an anti-establishment platform highly critical of the country's current political class - MATIAS BAGLIETTO/REUTERS
Javier Milei, the radical populist running for Argentine president, labelled the current government “criminals” after he was beaten in the first round of voting by the country’s finance minister in shock results.
Mr Milei, who won 30 per cent of the vote, was unexpectedly defeated by Left-wing Sergio Massa, who took 36 per cent. As neither candidate reached the 45 per cent threshold needed to win outright, they now face a run-off on Nov 19.
“If we do not want to lose the country in the hands of this government of criminals, it is essential that all of us who want change work together,” Mr Milei said.
The anti-establishment libertarian has promised to radically cut public spending if elected and has focused his campaign on attacking the entire political system, which he labels a “political caste”.
Sergio Massa speaks outside his campaign headquarters after the general election in Buenos Aires - AP
Mr Massa’s victory was considered a shock against the backdrop of Argentina’s dire economic crisis. As the economy minister, Mr Massa has faced blame for inflation rates of 138 per cent that have pushed four in 10 people into poverty.
“Two thirds of Argentinians voted for a change, for an alternative to this government of criminals that have mortgaged our future to remain in power,” Mr Milei said to his disappointed supporters outside his election night headquarters.
His supporters are now crying election fraud, echoing comments made by Mr Milei after the primary vote in August.
“It feels wrong. All the polls were indicating Milei would win. They’ve stolen our votes. They own the system, so maybe we just can’t win, maybe it’s impossible,” said Guilherme, aged 28, standing despondently on the sidelines.
“There is so much corruption here. They have stolen our votes and ballots,” said Juan, aged 54.
Supporters of Mr Milei wave flags outside his party headquarters - AFP
There has been no evidence that fraud has been committed in this election, although accusations of corruption have become a key feature of Argentine politics in recent years.
On Monday, Mr Massa played a different hand, declaring the nation’s steep political rift – “la grieta” – was over and calling for national unity.
“I am going to embrace every Argentine man and woman, no matter how they think, no matter their religion, no matter their social condition,” he said.
Supporters of Sergio Massa reach out for a jersey at his campaign headquarters - AP
Tapping into public frustration about the country’s finances, Mr Milei pledged to halve the country’s ministries, “burn down” the central bank, and replace the country’s local currency with the US dollar if he wins. At rallies, he wielded a chainsaw to indicate the cuts he was going to make, an image which has come to symbolise his campaign.
But his more extreme social plans – such as revoking abortion access and loosening gun restrictions – appeared to have scared huge swathes of the population.
“I’m voting Massa because the others are worse. I won’t be happy if Massa wins either, but at least he isn’t psychotic,” said Lisa, aged 59, as she cast her vote. “Milei is talking about having arms at home and saying you should be able to sell your organs. He’s bad news.”
Both candidates will now attempt to win over the 23 per cent of voters who supported centre-Right candidate Patricia Bullrich, the 26 per cent of citizens who spoiled their ballots or did not vote and the 10 per cent who voted for other Left-wing candidates.
A major upset and uncertainty: Argentina heads to run-off
Fran BLANDY and Nina NEGRON
Mon, 23 October 2023
Argentine Economy Minister Sergio Massa came first with almost 37 percent ahead of Milei with around 30 percent of the vote (Emiliano Lasalvia)
Despite overseeing record inflation and poverty levels, Argentina's Economy Minister Sergio Massa confounded expectations by scoring the most votes in Sunday's first-round election.
He goes to a run-off against his polar opposite: the wild-haired, libertarian Javier Milei, who has vowed to take a chainsaw to Argentina's notorious public spending and dollarize the economy.
AFP takes a look at what happened and what we can expect next.
- Why the surprise? -
Massa and the ruling Peronist movement were seen as the underdogs amid the economic shambles that has seen Argentina hit by inflation of almost 140 percent, with 40 percent of the population living in poverty.
In line with an anti-establishment trend in the region, many analysts saw fertile ground for Milei, whose slick TikTok campaign and rock-star style rallies captivated the youth.
However, Massa came first with almost 37 percent ahead of Milei with about 30 percent of the vote.
"Against all predictions," "Surprise," headlined major media, scrambling to understand how Massa pulled it off.
- How did Massa pull it off? -
According to analysts, Massa's performance is due to a mixture of fear of Milei, an enduring affection for Argentina's Peronist social movement, and his spending spree to lure voters.
Massa handed out bonuses to workers and the unemployed and slashed income tax for much of the population, all while highlighting what Milei's plans to cut subsidies would mean for people's pockets.
Many economists, and the International Monetary Fund which has bailed Argentina out 22 times, agree the country needs to stop spending more than it earns.
Milei appeared at rallies with a powered-up chainsaw, vowing to cut spending by 15 percent, ditch about 10 ministries, privatize state entities and "dynamite" the central bank.
And while voters are keen for change, Milei's proposals likely spooked many.
"A lot of Argentines have a lot to lose from the dismantling of the social welfare state," which millions depend upon, said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.
Milei's "chainsaw is coming straight at family budgets," he added.
Massa, meanwhile, took "a series of economic measures that, even if they have a very serious fiscal cost in the future, benefited many in the immediate," noted political scientist Sergio Morresi of the University of Buenos Aires.
- Where else did Milei falter? -
Milei, an admirer of former US president Donald Trump -- and who had a son of former Brazilian leader Jair Bolsonaro supporting him in his bunker on election night -- has introduced ideas that do not sit well with many Argentines, analysts say.
He is against abortion, has proposed making it easier to own guns and sell organs, believes mankind's burning of fossil fuels is not the cause of climate change, and said Argentine Pope Francis represents "evil on Earth."
A female lawmaker candidate from his party -- who won her seat -- has proposed allowing men to renounce paternity if they did not want their child.
"A lot of these views are out of sync with Argentine society," said Gedan.
"If you think Milei's success is a sign that Argentine society has become very conservative, then you're misreading Argentine politics and society. What has made him popular is his anti-establishment rhetoric," said Gedan.
- What can we expect from the run-off? -
Milei and Massa will contest the presidency on November 19, bringing weeks of more uncertainty, especially for the economy.
Analysts highlighted that Milei still managed a historic feat by coming from nowhere to claim second place in the first round.
"Milei, once seen as the frontrunner, now has an uphill battle to regain the momentum and stave off a defeat," said Nicolas Saldias, senior analyst with the Economist Intelligence Unit.
He will have to shift to the center to shore up votes, and reach out to the Juntos por El Cambio (Together for Change) coalition which came third with almost 24 percent, after insulting its leaders throughout his campaign.
Massa, who has vowed to form a "unity government" if he wins, is presenting himself as the democratic, stable hand to lead the country, but will have to win over millions of disenchanted voters.
"The campaign promises to be extremely polarizing as both candidates will appeal to fear to get voters to back their candidacies," said Saldias.
Morresi said that if the runoff is seen as a battle between authoritarianism and democracy, "the chances of the ruling party winning are very high."
"If the economic situation deteriorates... the opposition, even with a radicalized stance, have the possibility of triumphing."
bur-fb/mlr/ft
Fran BLANDY and Nina NEGRON
Mon, 23 October 2023
Argentine Economy Minister Sergio Massa came first with almost 37 percent ahead of Milei with around 30 percent of the vote (Emiliano Lasalvia)
Despite overseeing record inflation and poverty levels, Argentina's Economy Minister Sergio Massa confounded expectations by scoring the most votes in Sunday's first-round election.
He goes to a run-off against his polar opposite: the wild-haired, libertarian Javier Milei, who has vowed to take a chainsaw to Argentina's notorious public spending and dollarize the economy.
AFP takes a look at what happened and what we can expect next.
- Why the surprise? -
Massa and the ruling Peronist movement were seen as the underdogs amid the economic shambles that has seen Argentina hit by inflation of almost 140 percent, with 40 percent of the population living in poverty.
In line with an anti-establishment trend in the region, many analysts saw fertile ground for Milei, whose slick TikTok campaign and rock-star style rallies captivated the youth.
However, Massa came first with almost 37 percent ahead of Milei with about 30 percent of the vote.
"Against all predictions," "Surprise," headlined major media, scrambling to understand how Massa pulled it off.
- How did Massa pull it off? -
According to analysts, Massa's performance is due to a mixture of fear of Milei, an enduring affection for Argentina's Peronist social movement, and his spending spree to lure voters.
Massa handed out bonuses to workers and the unemployed and slashed income tax for much of the population, all while highlighting what Milei's plans to cut subsidies would mean for people's pockets.
Many economists, and the International Monetary Fund which has bailed Argentina out 22 times, agree the country needs to stop spending more than it earns.
Milei appeared at rallies with a powered-up chainsaw, vowing to cut spending by 15 percent, ditch about 10 ministries, privatize state entities and "dynamite" the central bank.
And while voters are keen for change, Milei's proposals likely spooked many.
"A lot of Argentines have a lot to lose from the dismantling of the social welfare state," which millions depend upon, said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.
Milei's "chainsaw is coming straight at family budgets," he added.
Massa, meanwhile, took "a series of economic measures that, even if they have a very serious fiscal cost in the future, benefited many in the immediate," noted political scientist Sergio Morresi of the University of Buenos Aires.
- Where else did Milei falter? -
Milei, an admirer of former US president Donald Trump -- and who had a son of former Brazilian leader Jair Bolsonaro supporting him in his bunker on election night -- has introduced ideas that do not sit well with many Argentines, analysts say.
He is against abortion, has proposed making it easier to own guns and sell organs, believes mankind's burning of fossil fuels is not the cause of climate change, and said Argentine Pope Francis represents "evil on Earth."
A female lawmaker candidate from his party -- who won her seat -- has proposed allowing men to renounce paternity if they did not want their child.
"A lot of these views are out of sync with Argentine society," said Gedan.
"If you think Milei's success is a sign that Argentine society has become very conservative, then you're misreading Argentine politics and society. What has made him popular is his anti-establishment rhetoric," said Gedan.
- What can we expect from the run-off? -
Milei and Massa will contest the presidency on November 19, bringing weeks of more uncertainty, especially for the economy.
Analysts highlighted that Milei still managed a historic feat by coming from nowhere to claim second place in the first round.
"Milei, once seen as the frontrunner, now has an uphill battle to regain the momentum and stave off a defeat," said Nicolas Saldias, senior analyst with the Economist Intelligence Unit.
He will have to shift to the center to shore up votes, and reach out to the Juntos por El Cambio (Together for Change) coalition which came third with almost 24 percent, after insulting its leaders throughout his campaign.
Massa, who has vowed to form a "unity government" if he wins, is presenting himself as the democratic, stable hand to lead the country, but will have to win over millions of disenchanted voters.
"The campaign promises to be extremely polarizing as both candidates will appeal to fear to get voters to back their candidacies," said Saldias.
Morresi said that if the runoff is seen as a battle between authoritarianism and democracy, "the chances of the ruling party winning are very high."
"If the economic situation deteriorates... the opposition, even with a radicalized stance, have the possibility of triumphing."
bur-fb/mlr/ft
Massa Gains Upper Hand on Milei as Argentina Heads to Runoff
Manuela Tobias and Scott Squires
Mon, 23 October 2023
(Bloomberg) -- Argentina’s election will be settled in a presidential runoff between Economy Minister Sergio Massa, who defied expectations to snatch the lead in Sunday’s election, and libertarian outsider Javier Milei. It’s a politically polarizing scenario that investors had feared most.
With the votes nearly all counted, Massa secured 37% while Milei received 30%, leaving both below the necessary thresholds to win outright. Massa, 51, and Milei, 53, will face each other in a second round. The results mark a reversal of fortunes for Massa, whose ruling coalition came third in August primaries.
Patricia Bullrich, the establishment pro-business candidate, came third with 24% of votes. Her exit raises concerns about the future of a center-right coalition that until recently was seen as the most likely to supplant the ruling Peronist alliance. Her votes are now up for grabs, and both Massa and Milei lost no time in making overtures in their speeches.
Next month’s runoff will finally settle the drawn-out question of who will be saddled with the impossible task of saving a once-rich country on the verge of collapse. It pits two candidates with diametrically opposed views.
The veteran from the Peronist movement — which has governed Argentina for most of last 20 years and refuses to die despite its disastrous economic legacy — will have to fight it out against the radical libertarian with no government experience who wants to dollarize the economy to kill inflation galloping above 138%.
Check the official results: Argentina Presidential Election Live Results 2023
Until then, Argentina will have to endure another month of volatility as Massa and Milei scramble to win the votes needed to clinch the top job. In his double role as economic czar and presidential candidate, Massa has deployed all his political cunning in past weeks to cut taxes and increase social spending to drum up popular support — even at the cost of accelerating an economic crisis for the IMF’s biggest borrower.
His first round lead indicates that this strategy worked and it was straight out of the playbook that Brazil’s Luiz Inacio Lula da Silva gave him. “Stop accumulating dollars, it’s time to gather votes” — that was the advise given by the leftist leader next door and there’s no incentive for Massa to change course with the presidency tantalizingly within reach.
South America’s second-largest economy reached the vote with heightened anxiety as a range of businesses suspended sales, savers withdrew dollars from the bank and brokerages halted taking new orders on certain investments. To stay competitive in the race Massa will likely try to avoid devaluing the currency, which he did the day after the primary vote, even if that risks depleting international reserves even further.
Market Worries
The Massa-Milei final was the outcome that bond investors worried about because it prolongs the uncertainty at a time Argentina desperately needs policy changes. Most of its international notes have lingered below 30 cents on the dollar in recent weeks, with surging yields that signal a 10th default is looming as major debt repayments resume next year. Unsurprisingly, the bonds collapsed further on Monday morning after the result, leading declines among emerging markets.
What Bloomberg Economics Say
“Massa first, Milei second is possibly the worst-case scenario for markets. It prolongs already-high uncertainty for another four weeks, with neither likely to provide granular detail on their policy plans. Massa could now double down on his populist approach of an artificially strong peso, interventionism and fiscally costly measures.”
— Adriana Dupita, Argentina’s economist
— Click here for the full report
Read More: Argentina’s Bonds Slump After Massa Comeback Forces Runoff
The country is facing its sixth recession in a decade and saw inflation spike to the highest level since the nation exited hyperinflation in the early 1990s. The continued slide of the Argentine peso has led to the gap between the official and parallel rates surging past 170%.
The fate of Argentina’s $43 billion program with the International Monetary Fund awaits either Massa or Milei when a new government takes office Dec. 10.
The program is way off track and Massa hasn’t complied with any of the key targets that are usually crucial for the IMF to continue disbursing money, which is Argentina’s only major source of international finance. IMF officials have called on the next government to swiftly reset the economy, emphasizing there’s no time for gradual policies.
Next Moves
In their post-election speeches, Massa and Milei tried to appeal to the third of the votes that didn’t support them. Massa promises to stabilize the economy, offering Argentines a false sense that what ails the economy can be fixed without painful measures. It became clear that while many want change, just as many weren’t willing to jump into the unknown.
That is what Milei represents, with his pledge to replace the peso with the US dollar as Argentina’s currency and to close the central bank. By dropping into second place, the risk for him is that voters will reject the kind of extreme policy medicine he wants to prescribe and live off a bit longer on the state’s largesse even with 40% of the population in poverty.
It was Milei’s birthday and he was thanking the crowds at his post-election rally for all the gifts — even if the greatest present of all eluded him. Given all the momentum he’d picked up, there had been some predicting he could win outright tonight. He fell well short of that.
Yet his energy levels were undiminished and given both August and October yielded suprising results, the runoff has all the makings of a cliffhanger.
“I’m willing to do tabula rasa, deal the cards again,” Milei said to an energized crowd in Buenos Aires amid chants of “Long live freedom, dammit!”
Most Read from Bloomberg Businessweek
Manuela Tobias and Scott Squires
Mon, 23 October 2023
(Bloomberg) -- Argentina’s election will be settled in a presidential runoff between Economy Minister Sergio Massa, who defied expectations to snatch the lead in Sunday’s election, and libertarian outsider Javier Milei. It’s a politically polarizing scenario that investors had feared most.
With the votes nearly all counted, Massa secured 37% while Milei received 30%, leaving both below the necessary thresholds to win outright. Massa, 51, and Milei, 53, will face each other in a second round. The results mark a reversal of fortunes for Massa, whose ruling coalition came third in August primaries.
Patricia Bullrich, the establishment pro-business candidate, came third with 24% of votes. Her exit raises concerns about the future of a center-right coalition that until recently was seen as the most likely to supplant the ruling Peronist alliance. Her votes are now up for grabs, and both Massa and Milei lost no time in making overtures in their speeches.
Next month’s runoff will finally settle the drawn-out question of who will be saddled with the impossible task of saving a once-rich country on the verge of collapse. It pits two candidates with diametrically opposed views.
The veteran from the Peronist movement — which has governed Argentina for most of last 20 years and refuses to die despite its disastrous economic legacy — will have to fight it out against the radical libertarian with no government experience who wants to dollarize the economy to kill inflation galloping above 138%.
Check the official results: Argentina Presidential Election Live Results 2023
Until then, Argentina will have to endure another month of volatility as Massa and Milei scramble to win the votes needed to clinch the top job. In his double role as economic czar and presidential candidate, Massa has deployed all his political cunning in past weeks to cut taxes and increase social spending to drum up popular support — even at the cost of accelerating an economic crisis for the IMF’s biggest borrower.
His first round lead indicates that this strategy worked and it was straight out of the playbook that Brazil’s Luiz Inacio Lula da Silva gave him. “Stop accumulating dollars, it’s time to gather votes” — that was the advise given by the leftist leader next door and there’s no incentive for Massa to change course with the presidency tantalizingly within reach.
South America’s second-largest economy reached the vote with heightened anxiety as a range of businesses suspended sales, savers withdrew dollars from the bank and brokerages halted taking new orders on certain investments. To stay competitive in the race Massa will likely try to avoid devaluing the currency, which he did the day after the primary vote, even if that risks depleting international reserves even further.
Market Worries
The Massa-Milei final was the outcome that bond investors worried about because it prolongs the uncertainty at a time Argentina desperately needs policy changes. Most of its international notes have lingered below 30 cents on the dollar in recent weeks, with surging yields that signal a 10th default is looming as major debt repayments resume next year. Unsurprisingly, the bonds collapsed further on Monday morning after the result, leading declines among emerging markets.
What Bloomberg Economics Say
“Massa first, Milei second is possibly the worst-case scenario for markets. It prolongs already-high uncertainty for another four weeks, with neither likely to provide granular detail on their policy plans. Massa could now double down on his populist approach of an artificially strong peso, interventionism and fiscally costly measures.”
— Adriana Dupita, Argentina’s economist
— Click here for the full report
Read More: Argentina’s Bonds Slump After Massa Comeback Forces Runoff
The country is facing its sixth recession in a decade and saw inflation spike to the highest level since the nation exited hyperinflation in the early 1990s. The continued slide of the Argentine peso has led to the gap between the official and parallel rates surging past 170%.
The fate of Argentina’s $43 billion program with the International Monetary Fund awaits either Massa or Milei when a new government takes office Dec. 10.
The program is way off track and Massa hasn’t complied with any of the key targets that are usually crucial for the IMF to continue disbursing money, which is Argentina’s only major source of international finance. IMF officials have called on the next government to swiftly reset the economy, emphasizing there’s no time for gradual policies.
Next Moves
In their post-election speeches, Massa and Milei tried to appeal to the third of the votes that didn’t support them. Massa promises to stabilize the economy, offering Argentines a false sense that what ails the economy can be fixed without painful measures. It became clear that while many want change, just as many weren’t willing to jump into the unknown.
That is what Milei represents, with his pledge to replace the peso with the US dollar as Argentina’s currency and to close the central bank. By dropping into second place, the risk for him is that voters will reject the kind of extreme policy medicine he wants to prescribe and live off a bit longer on the state’s largesse even with 40% of the population in poverty.
It was Milei’s birthday and he was thanking the crowds at his post-election rally for all the gifts — even if the greatest present of all eluded him. Given all the momentum he’d picked up, there had been some predicting he could win outright tonight. He fell well short of that.
Yet his energy levels were undiminished and given both August and October yielded suprising results, the runoff has all the makings of a cliffhanger.
“I’m willing to do tabula rasa, deal the cards again,” Milei said to an energized crowd in Buenos Aires amid chants of “Long live freedom, dammit!”
Most Read from Bloomberg Businessweek
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