Argentina Update – Elections & more –11th May 2023

th of May: 2023

Elections drama is already happening in the San Juan and Tucumán provinces, where the Supreme Court suspended the elections this week. Both provinces were supposed to hold the ballots on Sunday the 14th to elect their next governor, but the Supreme Court dramatically decided to suspend it due to a request for an investigation into the candidacies of Sergio Uñac, (from San Juan) and Juan Manzur (in Tucumán) from the party Frente de Todos.

The court ruling spoke of both candidates seeking a fourth mandate, echoing the language used by the opposition, which argues that Manzur and Uñac running for office again is unconstitutional. The national government reacted angrily to the ruling, citing its proximity to the local elections and accusing the court of collusion with the opposition.

The tribunal has given both provincial administrations five working days to file their response.

Three other provinces were able to elect their next governors, though. In Jujuy, the Radical Civic Union Party (or UCR) has held power but with a new governor, Carlos Sadir. In La Rioja, the ruling party’s candidate, Ricardo Quintela, was re-elected, mainly because the libertarian coalition split the right-wing vote. And finally, in the Misiones province a centrist cross-party alliance kept the governor’s office, with former governor Hugo Passalacqua at the head.

All provinces except Corrientes and Santiago del Estero will hold local elections this year.

In other political news, Truckers’ union leader Hugo Moyano accused the presidential candidate and former PRO leader Patricia Bullrich of “incapacity” to run the country and called her bad-mannered during a TV interview. He said that she plans to eliminate workers rights, but that people will react as soon as they are taken away.

While we can’t be sure if those are her plans, she has trailed her economic proposals for government if she wins the presidential election. These include trade liberalization, welfare cuts, and an “iron fist” approach to protests.

After Moyano’s interview, Bullrich was quick to respond on Twitter, calling him a mobster.

Clearly, fuses are short — but reserves are even shorter. Reserves hit a new low this week after an interest payment to the International Monetary Fund, and the Central Bank now has negative international net reserves by at least one billion dollars, according to various consulting firms. Gross reserves are at thirty four billion, but the bank’s liabilities remain higher. Again, the main reason for the state of the reserves is the ongoing drought that will slash between eighteen and twenty billion dollars in agricultural exports this year.

Meanwhile, some seem to wonder if lithium is the solution, but the government still hasn’t cracked the code to leverage this resource into sustained prosperity. This week, a group of lawmakers from the ruling party launched an initiative to nationalize the country's lithium resources, claiming that it is essential to take control over the defense of national sovereignty, protect national interests and work on concrete measures that allow for industrialization with the corresponding environmental considerations and respect for the native peoples.

The dream is not to become raw lithium producers but exporters of finished products. Still, there’s no concrete plan in sight.

The good news is that José Ignacio de Mendiguren, the Secretary of Industry and Productive Development, had a fruitful trip to Germany. In Stuttgart, he met with Mercedes-Benz’ authorities, who confirmed their investments in Argentina, as well as initiatives to increase exports. He also secured investments from the organic chemistry company BASF and Daimler AG, which aims to increase its production in Argentina by 20% this year, as well as exports.

ty-eight million dollars from: 2019

As usual, Mercado Libre continues to thrive. The ecommerce giant posted better-than-expected profits for the first quarter, having capitalized on the collapse of the Brazilian retailer Americanas SA, which filed for bankruptcy in January. Net income more than tripled from a year earlier, to total 200 million dollars, above the 150 million forecast by Wall Street. Operating margins at the company rose to eleven percent, also beating expectations.

Speaking of dollars, citizens across the country withdrew over one billion of US dollar deposits from the banking system between late March and late April. This was prompted by the rumors of currency devaluation in the official exchange rate, which is likely to happen again as we approach the presidential elections in October.

The good news is that the parallel rates are calming down after a couple of unstable weeks. Argentina’s National Securities Commission has tightened the rules to prevent currency flight through the Bolsa stock exchange by limiting the ability of traders to access the MEP and CCL exchange rates. The MEP rate is calculated based on transactions in the Argentine stock market, specifically the purchase and sale of bonds. The CCL, on the other hand, represents the price of buying US dollars in the local market by purchasing Argentine securities, such as stocks or bonds, and then selling them abroad for US dollars.

To stay on topic, remember the tourist dollar? Well, that preferential rate is now available for digital wallets too. Foreigners that use PayPal, Amazon Pay, Pix, and other services to pay with US dollars in Argentina will get 91% more pesos per dollar now, according to the MEP exchange rate. This rate is currently at around 430 pesos per dollar, almost double the official exchange rate. This preferential exchange rate was launched last year for international debit and credit cards.

On that note about digital wallets, on the 4th of May the Central Bank banned payment providers from offering crypto transactions, alleging it intends to reduce the country's payment-system exposure to digital assets. This means that payment providers may not offer or facilitate crypto services through their applications. It’s unclear how the measure will affect the local crypto industry, but Argentina’s fintech chamber is already urging the government to reconsider the decision.

his bodegón, which closed in: 2018

Follow the link in the show notes if you want to know more.

From a renowned establishment to a renowned director, Damián Szifrón will be joining the Cannes Film Festival jury, presided by Swedish director Ruben Ostlund. The Argentine filmmaker is best known for directing the film Relatos salvajes, Wild Tales, and the beloved TV show Los simuladores, or The Pretenders. He recently released his first US film To Catch a Killer, a thriller starring Shailene Woodley.

And since we’re talking about international recognitions, we have to mention that Lionel Messi won the Laureus World Sportsman of the Year award on Monday the 8th. The star scooped a unique double, landing individual and team Laureus awards for his personal performance and those of his World-Cup winning team.

Speaking of Messi, rumor had it this week that he’d signed a deal with Saudi Arabia to play there next season. However, those rumors were quickly shut down by his team via social media. While his time at PSG is coming to an end, there’s no certainty as to where he’ll go next and there probably won’t be until the end of June.

Aaaand that's it for this week! Have you checked our website? Over there you can find more about us, how to contact us, and support us. Link to it in the show notes!

¡Nos vemos la próxima semana!