By: Ambassador Rubén Beltrán Guerrero

First Surprise: With more than 10 points of difference, Javier Milei wins the election with a vote that, in large part, is due to a significant rejection of the Peronist government and, also, to the impetus that the center-right group, led by former president Mauricio Macri and former candidate Patricia Bulrich, of the Together for Change (JxC) coalition, awarded Milei’s campaign. This was notable in certain provinces including Buenos Aires and Córdoba. With the above I am also stating that not all the votes that Milei receives are “his”, this distinction will be important when measuring the true political support that Milei will have.

Second Surprise: The magnitude of the defeat suffered gave rise to an unusual event, Sergio Massa conceded defeat without any official figure having been released at that time. Unusual, I repeat.

Third surprise: An event is emerging that will occupy the attention not only of Argentines but of the general financial sector. In his concession speech, Massa pointed out that starting Monday the 20th, all decisions will correspond to President Fernández (the great absentee in the process), and to the president-elect, Javier Milei. No one escapes the fact that starting tomorrow big decisions will have to be made in the economic area and that Massa is in an obvious hurry to “erase himself” [como se dice en Sudamérica]. In any case, Massa either resigns, or he will have to remain Minister of Economy until December 10 when he will take over the new government. It is also evident that Milei and his team will not want to “absorb” part of the responsibility for what will happen in the next 3 weeks, and they will want the outgoing government to shoulder that responsibility.

Immediate task: The state of the economy is a time bomb that will have to be defused. Beyond the uncertain probability of proceeding with the very complex idea of ​​​​dollarization of the economy, it is likely that Milei will try to send a double message of tranquility: 1) to the markets, signaling the willingness to continue negotiations on the debt and proposing a drastic reduction of the government apparatus and a greater adjustment of spending; and, 2) To citizens, offering the popular classes not to suddenly end social plans (subsidies and transfers). This continuity could be conditional on a review and rationalization of that expense. The dollarization project is strongly conditioned by the correlation of forces in Congress, where none of the political forces has a majority.

Congress, nobody’s. Let’s remember the data from a report I sent after the general elections in October. In the October elections, the formation of Congress was defined as of December 10 and for the first 2 years of the new president. The results were the following:

In the Senate, of 72 seats, Unión por la Patria (UP) will be the first minority with 33 seats. Together for Change (JxC) will remain with 21 and La Libertad Avanza (LLA) will have representation for the first time with 7 members.

In the Chamber of Deputies, which has 257 members, UP will maintain the first minority with 108 seats, followed by JxC (94) and LLA (38).

No block will have quorum own and the 3 main forces will have to negotiate among themselves. Milei will need the support of JxC or other parties, since today he does not have control of Congress.

It is foreseeable that in Congress progress will be made in dynamic agreements that come together, even temporarily, in flexible coalitions based on sectoral issues or interests.

Immediate challenges:

In the economic, instill tranquility in the markets and give certainty to Argentines about the direction the economy will take to stabilize inflation and the fall in the exchange rate. Although the dollarization of the economy is not achieved, the unification of the different unofficial exchange rates that reality imposes in the face of a peso whose official value does not adjust to the complexity of the different markets that the informality of the Argentine economy has imposed. (Brick Dollar, Blue Dollar, Crypto Dollar, etc.). It will be necessary to remember that many of the bank assets are denominated in pesos.

Politically A transversal dialogue is required that must attempt a conciliation that seems very difficult to achieve.

The street. The first semester of Milei’s administration will mark the type of relationship he will maintain with the popular classes; the elimination of subsidies and transfers would be a major irritant, practically impassable.

In the international, Milei is also a mystery. I estimate that at the regional level it will be a new dividing factor.

Very complex times are coming for Argentina.

In a few moments Milei will speak and the vote, with 97.09% of the votes counted, is 55.76% for Milei and 44.23% for Massa.

*Ambassador Rubén Beltrán Guerrero was Undersecretary for Latin America and the Caribbean, as well as Eminent Ambassador of Mexico to the Republic of Chile and to the Russian Federation. He is a Career Ambassador of the Mexican Foreign Service, and was Consul General of Mexico in New York, Phoenix and Los Angeles. Likewise, he is a member of the Mexican Council of International Affairs (COMEXI).