On Sunday, Argentines will decide between two candidates with very different economic positions in the country’s run-off election.
Lourdes Casanova, director of the Emerging Markets Institute at Cornell University, says that despite economic turmoil and the world’s highest debt to the International Monetary Fund, Argentina’s economy has the potential to improve. This suggests Argentines may choose continuity over change, according to Casanova.
“The two candidates for the run-off presidential election, Sergio Massa and Javier Milei, could not have more different economic positions. Milei, a conservative libertarian, wants to dollarize the country, close the Central Bank and eliminate the ministries of environment and health.
“Milei has also criticized the BRICS alliance, which Argentina is scheduled to join in January 2024. If elected president, Milei has stated he would break relations with China and has had very strong words against Brazilian President Lula da Silva. It is important to note that Brazil and China are the two most important trade partners of Argentina, followed by the United States. China is the destination of most of the country’s soybean exports and more than half of its meat. China has also become a very important investor in the electricity and banking sectors and in lithium.
“On the other hand, Massa, the current Minister of Economy from the center left, has promised to create two million jobs, reduce taxes and wants the government to continue to play an important role in the economy.
“Despite the country going through one of its worst economic crises, with an inflation rate of 143%, a 40% poverty rate and a currency in free fall against the U.S. dollar, the country’s economy could be about to improve, as we seem to be in a period of high, though volatile at times, commodity prices.
“With these expectations, it may not be a surprise if Argentines choose continuity over radical change.”