Date first published: 22/08/2017

Key sectors:all

Key risks:policy continuity; political stability

President Mauricio Macri’s government appears set to pass its first electoral test. The results of the 13 August nationwide primary legislative elections indicated that the Cambiemos alliance, consisting of Macri’s centre-right Propuesta Republicana (Pro) and the centre-left Unión Cívica Radical (UCR) has a strong chance to secure a positive result in the upcoming 22 October mid-term legislative election. This would help consolidate the government’s reform plans, ensure policy continuity and start paving the way for a potential second four-year term following the 2019 general elections. Mid-terms in Argentina are considered a strong predictor of the likelihood of re-election. The open, mandatory and simultaneous primaries (PASO) are in turn considered a nationwide poll ahead of the mid-terms. Despite better-than-expected results, the government avoided triumphalism and continued to focus on the electoral race which, despite former president Cristina Fernandez de Kirchner’s comeback to the political scene, is increasingly likely to be won.

It is important to understand what a government win on 22 October would constitute. A successful election will not secure a congressional majority for Cambiemos, will not prevent Fernandez de Kirchner’s from securing a senate seat for the province of Buenos Aires and will not require over 50 per cent of the vote nationwide. What is more, even if Cambiemos’ candidate loses in Buenos Aires province by around 2 percentage points, the results would still be considered positive. The province, Argentina’s most important electoral district representing 40 per cent of voters, has been a historic Peronist stronghold in which Cambiemos secured an unexpected result in the legislative PASO. Opposing Fernandez de Kirchner, Macri’s candidate Esteban Bullrich secured 34.06 per cent of the vote against the former president’s 34.27, a difference of just 20,324 votes according to the official final results published on 29 August. This indicates two main things. First, Fernandez de Kirchner will secure a Senate seat, although maybe not with the majority of the votes. Failing to secure a majority of votes would hamper her chances of having a prominent role within an increasingly divided opposition. Second, although Cambiemos has improved its position, Peronism remains a key player nationwide.

Opposition fragmented

Fragmentation within the opposition Peronist party will continue to play in favour of Cambiemos. The ruling alliance won 35.9 per cent of the vote nationwide. Fernandez de Kirchner’s newly created Unidad Ciudadana (Kirchnerist Peronism) secured 20.3, the Partido Justicialista (PJ, Peronist) won 17.1 per cent and the Frente Renovador (moderate Peronism) 7.4 per cent. The fact that Cambiemos secured a win in what are traditionally considered Peronist strongholds further increases the government chances of being able to exert influence on Peronist governors. The key will be to secure an increase in the number of seats in both the lower house of Congress and the Senate and to repeat the results obtained in Buenos Aires province.

With a Congress without a clear majority, given the fragmentation of the Peronist party, and the economy showing signs of recovery, should the results of the PASO be replicated on 22 October, Macri’s will likely be able to consolidate his reform agenda. National and international investors see this as crucial to go ahead with much of the pledged investments as they still remain wary of Argentina’s historical pendulum between populism and market friendly approaches. The upcoming midterms appear set to provide facts that will help boost trust in the credibility and sustainability of the government’s plans.