On the 40th anniversary of the return of democracy in Argentina, in 2023, the vote was held to elect Javier Milei as the new President of the country for the next four years. 

Sherlock Communications Argentina shares an overview of the electoral process that began in August and ended in November, and an analysis of the country’s current political situation, the economic challenges and some of the issues that the business world should be made aware of. 

The Argentine political, economic and social context

The economic crisis deepened by the acceptance of the loan from the IMF in 2018, precipitated a political crisis, first in the government of Mauricio Macri (2015-2019), who was the first president in Argentine history to lose in an election for a second term, and then in the government of Alberto Fernández (2019-2023), who decided not to run for the possibility of a second presidency due to high negative image ratings. Thus, the two main coalitions were beaten before the public opinion.

This scenario was brought to light and after the open and mandatory internal elections held last August 13, the presidential candidates for the general elections of October were determined by popular vote, causing a huge surprise: Javier Milei of La Libertad Avanza (LLA) was the most highly-voted candidate in the primaries. 

The surprise of the outsider

In the face of the failed governments of Macri (Cambiemos, central-right) and Alberto Fernández (Frente de Todos, central-left Peronism) and social discontent, the figure of Javier Milei emerged, a neoliberal candidate who gained public notoriety as an economy specialist on different TV programs, always outside the traditional party structures. 53-year-old Milei stood out for his eccentricity and libertarian extremist ideas, in tune with figures such as Donald Trump and Jair Bolsonaro.

Milei confronted different candidates that are part of the traditional political scene in Argentina. From Sergio Massa (51), Minister of Economy of the outgoing government, to Patricia Bullrich (67), present in the country’s politics since the return of democracy in 1983; Juan Schiaretti (74), the outgoing governor of the province of Córdoba and Myriam Bregman (51), representative of the left-wing parties. 

All of them stated the need to improve the macroeconomic conditions of the country, having led to high poverty rates over the last years, with all of them differing in stance on how to achieve it. 

The October general elections

On October 22, however, during the general election in Argentina, it seemed that the ruling party was regaining ground. Massa (Unión por la Patria) had 37% of votes, followed by Milei (LLA) with 30%, Bullrich (Juntos por el Cambio) with 23%, Schiaretti (Hacemos por Nuestro País) with 7% and Bregman (Frente de Izquierda de los Trabajadores) with 2%.  As they weren’t able to achieve a sufficient lead to win in the first round, the top two had to go head-to-head in the ballot on November 19, thus defining the next president for the next four years.

Challenges in Argentina

Since 2018, Argentina has been going through what is called a “debt crisis”; this issue has deepened the  inflation problems which have been going on for more than five years. This inflationary process has occurred because of the lack of dollar income, a product not only due to the obligations with the IMF, but also due to multicausal issues. In 2023, Argentina had the worst drought in its history, which meant that 20 billion dollars in raw material sales did not come in, generating a gap in its trade balance. 

For 2024, it is expected that the harvest will improve, but there are also expectations placed on the return to the export of liquefied gas from Vaca Muerta and the exploitation of lithium, two important commodities for the world. Another one it’s betting on for the future is the knowledge industry. In this regard, Argentina is one of the countries with two of the most valued unicorns in the region, and it also has a high amount of specialized labor, which is highly competitive due to the exchange rate. 

This scenario for the near future leads different companies from all over the world to continue betting on Argentina, also encouraged by the highest level of industrial activity in seven years in the country. Macroeconomic problems related to fiscal accounts exist, but the way out is not only about balancing public accounts, but also advancing in the improvement of Gross Domestic Product growth. 

Democratic History

Since its return to democracy in December 1983, Argentina has undergone different institutional transformations that have strengthened the democratic process in the country, generating the longest democratic continuity in its history. After the reform of the National Constitution in 1994, the process for electing the President and representatives of the National Legislative Branch was strengthened. 

Later, in 2009, the National Congress approved the “Law for the Democratization of Political Representation, Transparency and Electoral Equity” (number 26.571), which established the P.A.S.O. (Ley de Democratización de la Representación Política, la Transparencia y la Equidad Electoral), with the objective to establish rules that regulate the construction of alliances and the presentation of candidacies so that the electoral offer is more orderly and transparent and the development of the representation system is regulated in an equitable and democratic manner.

With the election held last August 13, the presidential candidates for the October general elections were determined by popular vote. This new transfer of power was carried out by means of a majority electoral system, where the winning candidate is decided when the most voted formula obtains more than 45% or more than 40% with a difference of more than 10% between the first candidate and the second. When these numbers were not reached, a second electoral round (called “balotage”) was held where the two most voted candidates competed in a new election to be held four weeks later. After an election campaign that lasted five months, Milei, the outsider, finally prevailed over Massa and became the president-elect of Argentina.