Economics and Politics in Argentina’s High Stakes Elections

There’s an old saying that elections have consequences. For Argentina, this could never be more true. The country’s upcoming election in October is highly consequential as it faces issues regarding the economy, the environment, and politics.

Argentina is the second largest country in South America by area, the fourth largest in terms of population, and has solidified its importance in global affairs as having the third largest economy in the continent. As such, it works closely with an interconnected network of trade partners worldwide, such as Brazil, the European Union, the United States, and China. On paper, it might seem like the country is doing quite well given its distinguished status. Yet, despite this, Argentina has undergone numerous challenges on its journey to becoming the fragile democracy it is today. Like many Latin American countries, the nation has suffered from a persistently unstable economy, the impact of climate change on its agriculture, political corruption, and crime. As the country’s presidential election looms in October of 2023, these prevalent issues will challenge the leadership of Argentina’s current president, Alberto Fernández.

The State of the Economy and Environment

Inflation in Argentina recently rose to over 100%, the highest ever in the country’s history. Economic troubles started in the 1930s as the country attempted to reduce reliance on foreign goods in response to the Great Depression. They did so by instituting import-substitution trade policies, which catalyzed inflation. Since then, numerous other attempts at stabilizing the economy have failed as well.

Rate of increase in percentage of Argentina’s inflation.
Photo Credit: Expansión

To avoid defaulting on debt to the International Monetary Fund (IMF), and to address the peso’s devaluation and fiscal deficit in 2020, Fernández’s administration made a classic economic mistake— printing money during the pandemic.

This decisive step skyrocketed inflation rates and culminated in the country’s current economic conditions, as it has done to countless other countries throughout history. While Argentina’s economic minister Sergio Massa has vowed to stop printing money in an attempt to address the country’s soaring debt, the situation continues to worsen. Arguably the most distressing consequence for the people of Argentina is the rising price of food, which went up by an additional 9.8% from January to February of 2023. Some families have had to forego their favorite Asado barbecue dishes, while others must skip entire meals to keep a roof over their heads.

Climate change has also adversely affected the country’s economic performance. Argentina relies on its agricultural exports such as soy, wheat, and corn as its main source of income, making these crops key factors in maintaining the stability of the economy. The country’s worst drought in 60 years is fueled by climate change and has forced officials to pull the level of these exports back. With no source of income to replace this loss, inflation continues to rise to unprecedented levels. In this manner, environmental conditions and the health of the economy are interconnected.

Political Corruption and Crime

Argentina’s brutal history of political corruption and crime has amounted in fear among Argentina’s population for their upcoming election. Several military dictatorships in the 20th century, including the most infamous one under General Jorge Rafael Videla from 1976 to 1983, saw tens of thousands killed and political rivals silenced. Now, as the country attempts to rebuild and strengthen its 21st-century democracy, instances of corruption continue to surface. Most commonly, elected officials or civil servants have taken bribes and interfered in various judicial processes, fostering an environment where criminals can escape accountability for their actions. Some police forces in the country are also well-known for turning a blind eye to certain criminal groups. Electing a president willing to cleanse the country of corruption will lower the crime rate and ensure the young democracy remains stable. After all, no one is above the law in democracies.

The Candidates

Inflation, the economy, and crime remain the top priorities for the majority of Argentines in the upcoming election. Many are disillusioned with President Fernández’s ability to solve the crises, whereas others have lost faith in their government entirely. 

Among the most popular candidates are Patricia Bullrich, the country’s former security minister who proposed using both the peso and U.S. dollar to quell inflation, Horacio Larreta, the mayor of Buenos Aires who vowed to extract shale to stabilize the economy, and Sergio Massa, the country’s newest economy minister who wants to create a common currency with Brazil. Each of these center-right candidates has promised unique ways of handling inflation but there has not yet been a consensus on the candidate with the best solution.

Javier Milei pictured at a conference.
Photo Credit: World Economic Forum

As many desperately search for solutions, the extreme candidate Javier Milei pledges liberation. Milei, a right-wing libertarian, is well-known for his hard stance against politicians and the state as well as for his calls for cutting taxes to stimulate the economy. Additionally, Argentina’s worsening dilemmas have caused those who support him to consider this election a fight against the establishment that has failed them. Argentina’s usage of a popular-vote system means that the prospect of the population electing a politically polarized president is more likely than in other countries.

International Implications

The outcome of this election has implications not only for the domestic and international economy but also for the international security of the West. China has a growing influence over Latin American countries as it seeks to outcompete the United States and establish political and economic relations. Similar to his strategy in Africa, Chinese President Xi Jinping has been conducting visits with President Fernández and pledging aid to the country. China is also interested in building a naval base in the Straits of Magellan, an important route of trade and passageway for American aircraft carriers. This would give it autonomy over the important passage and limit the United States’ influence in the region. The security of the Western Hemisphere is threatened by this move as it would extend the Chinese military’s influence over Antarctica. Therefore, the candidate who wins this election has the authority to decide how Argentina proceeds with allowing China greater access to the region. This decision undoubtedly has the potential to worsen the current geopolitical tensions between the United States and China.

All eyes are on Argentina in the months leading up to October. The ramifications are stark: a spiraling economy, an environment in danger, and a political sphere poisoned by corruption and crime are all hanging in the balance. This election alone may just have the potential to set the country on the road to recovery. More than ever, the world will be watching.

Photo Credit: Casa Rosada