Schocking PASO results & more – 17th Aug 2023

¡Buenos días from The Springs! This is the Rorshok Argentina Update from the 17th of August twenty twenty-three A quick summary of what's going down in Argentina.

We have a very political episode today, as there’s only one topic on every journalist’s agenda and potentially every citizen’s mind: the result of the PASO primaries. By now, you probably heard that the far-right libertarian Javier Milei took the lead in the primary election on Sunday the 13th. Expected for some, out of left (or should we say right?) field for others, Milei secured thirty percent of the vote — far higher than what the polls suggested.

Political analysts had predicted his radical policy proposals would prevent him from attracting many more voters, but apparently, that wasn’t enough to stop him from becoming the front-runner. Even when some of those radical policy proposals include abolishing Argentina’s Central Bank, adopting the US dollar as the official currency, closing or privatizing all state-owned organizations; eliminating the health, education and environment ministries, among others.

Many agree that the key to his success is how he pitched himself as the radical change that the economy needs, and the fact that the main two coalitions he competes with already failed to turn the ship around in the past eight years. Either way, it can’t be denied that he’s made a profound impact across different socioeconomic sectors. If elected, the impact could be even greater, as he and his running mate — a lawyer known for defending the last military dictatorship — have suggested that the State has no business regulating guns or the sale of human organs, and that they have intentions to overturn recent policies that legalized abortion.

Meanwhile, it was a tough night for Sergio Massa’s supporters, as he couldn’t surpass thirty percent. One could think it was a long shot considering he’s rounding up a year as Economy Minister and the economy is not great. However, it represented the worst defeat for Peronism in the last two decades. The ruling Union por la Patria coalition only found relief in the Buenos Aires province, where Governor Axel Kicillof ended up five points ahead of the opposition.

But perhaps it was Horacio Rodriguez Larreta who experienced the greatest sense of disappointment on Sunday. Despite having been working on his presidential campaign for at least two years, the Buenos Aires City Mayor roughly managed to scoop ten percent. His rival for the nominee, Patricia Bullrich, surpassed him by around six points, which means that she will be the party’s only candidate in October.

The question now remains whether Larreta’s ten percentage points will go over to Bullrich or a different party altogether. While she took her first political steps in the Peronist left, Bullrich leaned toward the right and is now all about abandoning currency controls, stopping social protest and having a zero-tolerance approach to crime. Larreta, on the other hand, advocated for a moderate approach based around building bridges, which means some of his voters may feel more comfortable switching to Massa.

A lot happened on Monday after the results came in. Argentine shares and dollar bonds on Wall Street experienced a drop of approximately ten percent, as traders grapple with the implications of Milei’s surge in popularity.

To address the fallout, the government devalued the official foreign exchange rate by almost twenty percent and raised interest rates by twenty-one percentage points, bringing them to 118 percent. This measure aimed to manage deposits in bank accounts and restore stability amid the upheaval.

While the official exchange rate closed at around 298 pesos per dollar on Friday, Monday saw it go up to 365 at the Banco Nación state bank. Inevitably, this set off a chain of additional measures. For example, the government decided to lower the taxes imposed on credit card transactions involving foreign currency purchases over 300 dollars — often referred to as the Qatar dollar. These taxes were reduced from a cumulative ninety-five percent to seventy-five percent. This adjustment had to be made due to the fact that applying a ninety-five percent tax rate on an exchange rate of 365 pesos per dollar would result in a significantly higher final price than the parallel exchange rate, which currently stands at around 780 pesos. This would prompt everyone to go to the parallel market instead of using their credit cards while traveling or shopping online.

Another thing that happened as a result of the election is that Sergio Massa, in his role as Economy Minister, had to make a quick trip to the US to ask the International Monetary Fund (or IMF) to increase a disbursement planned for later this month. Argentina’s Central Bank is running out of reserves to support the peso in the foreign exchange market, and this disbursement is one of the few ways to boost those reserves in the short term.

Speaking of the IMF, Javier Milei disclosed on Tuesday the 15th that he had been contacted by the International Monetary Fund to discuss Argentina’s forty-four billion dollar debt program. He said he’s more than ready to have a meeting soon, as his fiscal strategy is significantly more aggressive than the recommendations put forth by the IMF itself.

Back to the topic of the exchange rates for a second, if you’re lost amongst the dozen different rates, you can check out a Bloomberg’s article that explains them. In the show notes you can find the link to the article called A Guide to Argentina’s Many Exchange Rates.

Moving on from the elections, the Supreme Court office handling domestic violence reported a notable increase of fourteen percent during the initial quarter of twenty twenty-three. The office received an average of thirty reports daily, with the primary demographic of victims comprising adult women (fifty-three percent) and children and adolescents (thirty-eight percent). To get attention and counseling in a situation of gender violence, there’s a 24-hour helpline numbered 144.

With so much going on across the economic and political spaces, it’s easy to lose sight of other things, such as Covid-19. This week, the health authorities confirmed the detection of a new subvariant called Eris. The cases were confirmed in Córdoba and Buenos Aires City, and it’s a sublineage of the Omicron variant.

Earlier this week, the Argentine government declared the nation bird-flu free, six months after the first case of avian influenza in Argentina was confirmed in the Jujuy province. However, a few days after the announcement a dead sea lion was found on the Tierra del Fuego shores, that was infected with avian influenza.

In other health news, the Government regulated the law on digitalization of medical records. This means that the Single Federal Program for Computerization and Digitization of Medical Records will create an interoperability framework across the public and private sectors so that all patient information can be documented in a single system. That way, any doctor will be able to access the historical clinical data of their patient in a way that’s clear and easily understood.

Moving into the topic of sports, Argentina’s women’s volleyball team achieve a historic Copa Panamericana title. On Sunday the 13th, they beat host Puerto Rico and won the tournament for the first time. The Copa Panamericana features countries from North and South America and grants qualification for the Olympic Games.

For anyone who wants to toast to the team’s win, an article by The Washington Post may come in handy. Titled 8 Buenos Aires bars preserving Argentina’s golden age, this piece discusses the significance of classic bar-cafes in the capital, that have played a crucial role in preserving the city's cultural history and traditions. The author, Chris Moss, reminisces about his personal experiences in Buenos Aires and his visits to timeless cafés like Bar Británico, Café Tortoni, Confitería La Ideal, La Biela, and others.

To give it a read, follow the link in the show notes.

Before we go, a documentary recommendation in case you want to disconnect from the news cycle. Disney+ recently released “Wild Life,” which tells the epic love story of conservationists Douglas and Kristine Tompkins, who dedicated their lives to the creation of National Parks in Chile and Argentina. Check it out if you want to see some incredible landscapes.

Aaaaand that’s it for this week! Thanks for joining us!

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¡Nos vemos la próxima semana!