Milei’s primary victory surprises business leaders

While they expected a poor performance from the ruling coalition, there was concern about the far-right libertarian’s lead 

There was much expectation in big business chambers in the hours before Sunday’s primary election results were announced, several sources told Ámbito Financiero. On one hand, it marked the end of their uncertainty regarding voting trends and presidential candidates. On the other hand, they expected poor performance by the ruling coalition Unión por la Patria (UxP)

However, the number of votes obtained by Javier Milei was a surprise, turning the future of the economy into “an enigma.” The chambers will now ask for greater detail about economic proposals from all contenders and their plans for “collaboration” between the ruling party and the opposition. Industrial small and medium-sized enterprises (SME), meanwhile, are concerned about the results.

There are diverse views on the Milei factor. When asked about their thoughts on the libertarian’s far-right La Libertad Avanza (LLA) being the most voted party and candidate, a member of the Group of the 6 — which gathers top leaders of key business areas like construction, agriculture, banking and industry — responded: “It’s bad. It complicates things.”

“This is the absolute confirmation of the failure of political actions, 40 years since democracy was restored,” said a businessman from the Argentine Industrial Union (UIA) who preferred anonymity.

People in some industrial sectors, mainly small and medium-sized businesses, expected a more competitive candidacy from Economy Minister Sergio Massa — who won UxP’s presidential nomination on Sunday — who could enforce pro-industry policies. 

“I was expecting support for the person who is holding the situation together in the worst circumstances,” one industrialist told Ambito. However, the results are not altogether surprising. They regard it as voters punishing poor economic results, such as a record inflation rate that is over 100%. 

Along the same line, Leo Bilansky, head of the SME association National Business Leaders for Development (ENAC) expressed concern and said: “Each vote for Milei means one less job in the future of Argentina, and for every 10 votes for Milei, one SME less.” 

However, some business leaders believe the number of votes for Milei and Juntos por el Cambio (JxC) could mean Congressional support for policies some business chambers are expecting, such as labor and tax reforms. 

“I am surprised, he fulfilled the role of imposing liberal ideas. The message is that society demands a strong change, without fear, that validates the view of a more right-wing electorate,” said Manuel Tagle, head of the Córdoba Stock Exchange. “The message is a strong change. The business community will have to provide support and abandon all perks, they will have to invest and aim for efficiency, not protection”.

Gustavo Weiss, president of the Argentine Chamber of Construction (CAC) said the business sector experienced the elections “with a great deal of expectation. We need a new government that can design a new plan for the economy, for development, on how to lower inflation, solve the fiscal deficit, and transform us into a more normal country. The potential is huge with sectors like [shale oil reserve] Vaca Muerta, mining and agriculture.” Weiss avoided any electoral forecasts, but said: “I don’t agree with disruptive positions. The viable option in this country is to build a majority among government and opposition leaders who understand a modern country.”

Looking ahead, the business community’s expectation is pessimistic. Due to the lack of dollars, they expect high inflation rates and import controls to continue. “There is a structural problem that cannot be solved by the best democratic exercises alone,” said an industrialist. However, they don’t expect the situation to get worse.   

On the contrary, Tagle described the economy as “an enigma” looking ahead. 

“Now that there is confirmation of the ruling party’s defeat expected by the market, it could provide some ease, like the reverse situation of 2019,” he said.

Business demands

Business leaders consulted by Ámbito will demand greater certainty about economic plans, according to Alfredo González, president of the Medium-sized Business Chamber (CAME). 

“As the candidacies are defined, we can also get a better picture of the candidates’ proposals. The last days before the primaries weren’t good, because all kinds of transactions were stopped, the parallel dollar rates skyrocketed, there were no reference prices for many products and what prevailed was fear and covering for yourself,” he said.

They also expect different parties to work together: “We only want the best scenario so we can move our businesses forward, it’s the politicians’ job to find consensus and implement economic plans,” said González. Along the same lines, Weiss views the steps Massa has pledged to take favorably — including a 2024 zero deficit budget, which coincides with opposition demands. 

“It would be logical if they discussed those measures together,” Weiss said. 

The results of the primaries within JxC did not cause significant reactions among business leaders, since although the divide was between Bulrrich and Larreta, they believe they have common plans. 

“The ideas of Luciano Laspina and Hernan Lacunza are similar, even if there are differences regarding caution and processes. They think alike about what needs to be done,” said Tagle. An industry leader from UIA added: “It would be good to learn what industrial model JxC has in mind for the next 20 years.”

Originally published in / Translated by Agustín Mango


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