Everything depends on the right recipe to solve the problem economic crisis, with inflation at 138% in September and the poverty rate at least 40%: the Peronist will win Sergio massa, outgoing Minister of Economy who still has ambitions to revive the weight checked; or the bimonetary system proposed by the centre-right candidate Patricia Bullrich; or even the drastic solution desired by the ultra-liberalist Javier Milei, of totallydollarize the economy as already done by Panama, Ecuador and El Salvador? This is the doubt that torments theArgentina on the eve of vote on Sunday 22 October for the first round of the presidential elections: at the moment the anarcho-capitalist Milei is in the lead in the polls, who is disturbing the markets quite a bit and who if he were to reach 45% (almost impossible) or 40% with at least ten points ahead of the second (unlikely but possible), he would be immediately elected president.
Argentina elections, Milei, Bullrich and Massa among the favourites
Otherwise we'll talk about it again in a month, in a ballot which at this point should be with the man of the establishment, Sergio Massa, very skilled at navigating the morass of the crisis by obtaining new financing both from the International Monetary Fund and also from China. Just a few days after the vote, Beijing sent the equivalent of 6,5 billion dollars to Buenos Aires, to the relief of Massa himself and the president Alberto Fernandez, who were thus able to honor some commercial commitments, repay part of the maxi loan to the IMF and also attempt to reassure, perhaps belatedly, public opinion. To which in fact I like Milei more and more, despite its rise causing a further weakening of the local currency, with the exchange rate exploding to over 1.000 in the parallel market pesos for a dollar. Even in the last few days the sale of US currency has been suspended, col dollar so-called Blue which no longer made a price.
Argentina to vote amidst an unbridled economic crisis
The Argentine economy is therefore paralyzed, waiting to know who the new president will be. The markets are restless, as are the countries in the area: the Brazil, the continent's leading economy and Argentina's main trading partner, said he was "worried by a possible victory for Milei", in the words of the Minister of Economy Fernando Haddad. Also Squid in recent months a lot has been spent on our Peronist friend Fernandez, to the point of hypothesizing a currency of exchange between the two countries to protect the very intense exchanges of raw materials and industrial products, and to the point of pushing for Argentina to enter the Brics, as duly happened a few weeks ago. This means for Buenos Aires, at least in theory, a broader axis on which to rely, beyond the profitable bilateral relationship with China and Brazil, given that, moreover, the Brics have a bank that can finance the member countries and today the institution is governed by the former Brazilian president, the "lulista" Dilma Rousseff.
The unknown Milei
Le prospects with Milei they would instead be disruptive international schemes, starting with the exit from Mercosur to become increasingly linked to the USA and the dollar, the same path taken about twenty years ago by El Salvador and Ecuador. Just a few days ago, part of the South American press was wondering what results this choice had had in the countries mentioned, in addition to Panama which has adopted the dollar since 1904. Although the size of the states and economies is not comparable (Argentina is all now the second largest economy in South America), the case of Ecuador is interesting, where moreover it has just voted with the confirmation of the right and thedollarized economy. According to Goldman Sachs, based on data from the Ecuadorian Ministry of Finance, the US currency caused a collapse in Quito's public finances, which reached a loss of more than 10% of the value of the GDP while in the 90s the balance was positive. However, with the transition to the dollar in 2000, inflation fell from 96% that year to 7,9% in 2003, and GDP, which lost almost 1999% in 5, began to grow again. What will be the right formula?
