President Mauricio Macri’s decisive victory in Sunday’s midterm legislative elections - where Argentines voted on renewing half the seats in the Chamber of Deputies and a third of the seats in the Senate - has paved a clear path forward for the ruling Cambiemos (Let’s Change) coalition to push ahead with structural reforms and plan beyond 2019 elections. So what key takeaways can be learnt from Sunday’s crucial vote..?
Cambiemos becomes national political force as Argentina looks to the future
According to local pollsters, Cambiemos won just over 40% of the votes nationwide, compared with 22% for Cristina Fernandez de Kirchner’s (CFK) newly formed Unidad Ciudadana party, and 15% for the Peronist Justicialist party. These figures give Cambiemos victory in the country’s five biggest population areas and in 13 of Argentina's 23 provinces. In doing so, it confirms one significant note for the country’s immediate future: that a new national political force has emerged. Politically, the country has changed radically.
Most significantly, Cambiemos has made inroads into the traditional bastion of Peronism support, the province and key battleground of Buenos Aires, where the ruling coalition won a total of 112 districts compared to just 23 for Kirchnerism. This gave victory to Cambiemos’ candidate by just over a 4% margin to CFK (41.38% to 37.25%) and acts as CFK’s first defeat at the ballot box with her name on it. In the end, polls were proven correct and Cambiemos was able to build upon its surprisingly strong showing in August’s primaries. Perhaps of more weight than any individual policy, the Government’s ability to present themselves as a new model of transparency and clear communication aided voter’s confidence in the future. Economic recovery that has accompanied the last few months only added to this belief. The string of news surrounding the missing person’s case of Santiago Maldonado in the week leading up to Sunday did not have a significant influence on the election, despite threatening to.
An extension of power in both Congress and the Senate
Despite falling short of a majority in both Congress and Senate – a majority in either was never a realistic goal – Cambiemos extended its presence and power in both houses, giving themselves more breathing room in striking agreements with opposition caucuses to pass key reforms. According to numbers presented by local newspaper La Nación, these results give Cambiemos 107 of its own deputies in Congress, up from 89 but short of the 129 needed to call quorum. In the Senate, the ruling party will have 24 seats, with a further two potential allies, but again short of the 37 needed to call quorum. Both houses will continue to be adverse, at least in numbers, to the ruling coalition’s reform agenda, but opposition parties now cannot ignore the political backing Cambiemos has received and will likely be more open to discussion.
Peronism in crisis
Lacking a leader and direction, Peronism finds itself in structural and ideological crisis that has very little time to reorganize and at odds in how to present its policies to an electorate continuing to back Macri’s. Cristina Fernandez de Kirchner now poses a significant problem for Peronism itself. Backed by nearly 3.5 million votes, she is the most voted Peronist and has used that as a declaration that both she and her Unidad Ciudadana party are here to stay, and that they remain the strongest opposition to Macri’s government. However, those politicians and deputies who left her side when she broke away from the traditional Peronist party to form Unidad Ciudadana will thwart any attempts by CFK to unify Peronism under her leadership in the immediate term. Whilst her continued presence can allow Cambiemos to maintain its strategy of polarization that has worked so well, this makes the former president a significant obstacle for the rest of Peronism to renovate and reform under a new moderate candidate. This was further compounded by the poor performance of Peronist candidates in the province of Salta. Governor Juan Manuel Urtubey -- who was using Sunday’s vote to prepare to compete against Cambiemos in the 2019 presidential elections and lead a reformed Peronism -- lost by 9 points in his own province.
In one of the most surprising results of the night, Cambiemos won in the province of La Rioja, where Peronism and Carlos Menem – an ex-president shrouded in corruption charges and allegations - had won the primaries (PASO) back in August with a healthy lead of 10 points. Come Sunday, this lead had all but evaporated with Cambiemos and their candidate in ex-Minister of Defense Julio Martínez winning the province by less than 5,000 votes (48.06% to 45.33%) at the time of writing.
Whilst of course Cristina Fernandez de Kirchner will enter the Senate and hold political sway - make no mistake – she lost both politically and symbolically in this election in what will most likely be a fatal blow to any presidential hopes in 2019. Not only did she lose, but she lost to a candidate in Esteban Bullrich who struggled to build a significant profile and had to be propped up by the enormous presence of Buenos Aires Governor Maria Eugenia Vidal, a popular and charismatic politician. Cristina Kirchner remains a great figure for the large swathes of conurbation surrounding the city of Buenos Aires, but her jurisdiction ends there. She is simply too unpopular outside of her fervent base of supporters to win a national vote. As if that were not enough, CFK will likely have to devote a large slice of both her personal time and resource to fighting the numerous corruption charges that may be given added momentum. Her Senate seat in principle gives her immunity from these charges.
Argentina has reinforced Macri's leadership and the country’s new direction, which should be interpreted positively by any foreign direct investors, but of course the problems have not disappeared. In a press conference in the morning of Monday 23rd, Macri announced that he was preparing a major national agreement to move forward with "the reforms the country needs," which will include governors, cross-party deputies and senators, unions, the judiciary and mayors. This gives an indication of where Macri’s problems will continue to lie - dialogue and consensus building with both a heavily fragmented opposition, and internal powers within his own coalition. We will not have a long wait to understand how the Government plans on using Sunday’s vote and newfound political backing as reforms across labour, tax, capital markets and the electoral process are all being prepared to be sent to Congress. However, despite calls from inward looking organisations – who do not have to worry or be held accountable by elections and voters – to quicken the reform agenda, gradualism will continue as Macri knows well that his biggest danger is now his own mistakes.
To discuss a potential requirement for support and learn more about our business, please contact:
- Client Services Director, Argentina
- Email: firstname.lastname@example.org