Argentina’s election on Sunday riveted the nation with the closest contest in memory, and it’s not over yet. For the first time in the country’s history, no candidate received a high enough percentage of votes to win outright. Under Argentina’s electoral rules, to win the leading presidential candidate needs more than 45% of the vote, or 40% with a margin larger than 10 points over the nearest rival. Daniel Scioli, of the incumbent party FPV, won 36.86% of the votes, while opposition candidate Mauricio Macri of the Cambiemos party won a higher-than-expected 34.33%. An unprecedented run-off between them is now scheduled for November 22. (The lead-up to the election also included the first presidential debate in the country’s history, from which Macri and Massa gained valuable TV coverage while Scioli declined to participate, taking heavy criticism.)
Unlike in many Western democracies, voting is mandatory in Argentina. So in the runoff all voters in the country will have to choose either Scioli or Macri. Above all, this means that much political jockeying will take place to sway those who voted for Sergio Massa, who finished third with 21.34%. (Scioli won approximately 9 million votes, Macri won 8.3 million, and roughly 7 million went to other candidates — including 5.2 million to Massa — so the second-round outcome is far from certain.)
On Monday, a jubilant Macri declared that the elections heralded “an absolute change in Argentine politics,” and called for open dialogue to find common ground — a not-so-subtle offer to Massa, who may be the kingmaker if he opts to endorse one of his former rivals and encourages his supporters to follow suit. To this end, Macri highlighted key issues that Massa raised during his campaign: the fight against drug trafficking and insecurity, as well as the need to improve the quality of life of Argentina’s retirees.
In any case, while the 12 year-reign of the Kirchners is ending, their controversial nationalizations of several big companies will remain, as will long-running economic problems. This is in part due to outgoing President Cristina Fernández de Kirchner’s efforts to cement her legacy of strengthening the state’s involvement in the economy. She pushed her allies in Congress to pass a law in September that would require congressional approval to sell state-owned stakes in companies, mainly the portfolio of the pension funds she nationalized in 2008. By taking that power out of the executive branch, it will be harder to re-privatize these companies regardless of whoever replaces Kirchner as president.
However, the notable exception to this law is oil firm YPF. Formerly state-owned, it was privatized in 1992, but in 2012 Kirchner expropriated a controlling 51% stake in YPF from Spanish firm Repsol. She drew on huge popular support, but the move caused a firestorm of criticism from abroad, and from Macri at the time. But even though the recent law excludes YPF, neither presidential candidate is in favor of re-privatizing the firm. Scioli, who is endorsed by Kirchner, promises broad continuity with her policies (including the nationalizations), accompanied by a few important tweaks, like improving strained ties with the U.S. and Argentina’s creditors.
Meanwhile, Macri has promised that if he is elected president, YPF will remain state-controlled. And even though he opposed the nationalization of Aerolíneas Argentinas in 2008, it will continue to be state-owned, although he pledged it will stop losing money. And the state will retain ownership of pension funds, although Macri said it won’t be used as a partisan tool.
Other economic troubles — such as double-digit inflation, currency controls, protectionist restrictions, and hostility towards the international financial community — have at least some leeway for change under the next administration. After 12 years of “Kirchnerismo,” the debate will get lively as the runoff approaches.