BUENOS AIRES, Argentina– On the north bank of Argentina’s Riachuelo River, luxury car dealers report that their sales have increased since Libertarian president Javier Milei eliminated import restrictions.
The streets of the financial district of Puerto Madero are full of bankers who praises Milei for ending a year-long ban on selling dollars online. The best restaurants serve sushi and steak to Argentine oil executives who gush about their efforts to attract foreign investment.
On the opposite side of Polluted Creek CanalVerónica Leguizamón, 34, only has a few eggs, a carton of milk and a handful of rolls left in her pantry.
Clutching a Tupperware container, she braved heavy rain last Friday to bring home dinner for her four daughters from a soup kitchen in her Isla Maciel neighborhood, a new daily routine since Milei. He cut subsidies to public services. and unrolled price controls on basic foods.
“Before we could choose what to cook,” he said. “Now we depend on others to know if we will eat or not.”
The contrasting fortunes of these Buenos Aires neighborhoods, just over a kilometer apart, illustrate the tensions that polarize the Argentine electorate in Sunday’s nationwide congressional midterm elections.
As voters go to the polls, their very different perceptions of the economy may determine whether Milei succeeds. and if the Trump administration continues to press with a financial rescue plan for your cash problems ideological ally.
“Within my small circle, everyone is happy with how things are going,” said Fernanda Díaz, 42, who runs a yacht charter company in Puerto Madero. “When I go out, I see people worried about making ends meet.”
Commenting on the midterm elections, US President Donald Trump He threatened to rescind a $20 billion aid package for Argentina. if Milei suffers a defeat at the hands of a “socialist or communist”, which will cause a liquidation in the Argentine markets.
Trump was apparently referring to Argentina’s broadly populist and broad-based politics. ideological movement known as Peronism that helped deliver The economic disaster that Milei inherited at the end of 2023.
Reckless public spending during a succession of Peronist governments, including the previous one President Cristina Fernández de Kirchnernow serving house arrest for corruption – brought infamy to Argentina for its inflationary spirals and sovereign debt defaults.
“We needed a major change,” said Díaz, who, before launching her yacht business, lost her position as a top executive when the Chilean retail group Falabella closed its operations in Argentina due to high inflation. import restrictions and a wild one oscillating exchange rate under the previous Peronist government. “I voted for the Milei government and at first I was very enthusiastic.”
The markets tremble at the idea of a Peronist return.
When the Peronist coalition defeated Milei’s libertarian party by an overwhelming majority in The Buenos Aires provincial elections last month.investors panicked because the president’s free-market reform was losing support and rushed to move capital out of the country.
In an extremely rare move, the US Treasury came to the rescue: sell dollars to help meet growing demand for greenbacks, signing of a line of credit of 20 billion dollars and pledging another $20 billion in aid from private banksinstead of American taxpayers.
Assets increased with each of the Trump administration’s announcements. Having dodged a currency crisis, Mileli and his supporters were, briefly, exultant.
“I’m proud of the support from the United States. It helps us become stronger,” said Luciano Naredo, 28, a high-end car salesman in Puerto Madero. “I think Argentina is finally taking its rightful place in the world.”
Although Isla Maciel has long been a Peronist stronghold, 42% of the municipality of Avellaneda voted for Milei as president in 2023, betting on the messy-haired political outsider to stabilize the economy and end triple-digit inflation.
wielding a Chainsaw spewing diesel fumes at rallies, Thousands cut tens of thousands of government jobscut state spending and burned foreign currency reserves to prop up the chronically depreciating peso.
inflation fell – in fulfillment of Milei’s main campaign promise.
But almost two years after his economic reformpurchasing power has also decreased. With inflation still hovering around 30% annually, residents of Isla Maciel have seen the value of their salaries, pensions and social assistance payments decline.
“You can’t live on 290,000 pesos a month with today’s inflation,” said Epifanía Contreras, 64, as she filled her plastic container with rice and peas at the Isla Maciel Foundation’s soup kitchen. referring to his monthly pension of $200. “The situation is getting worse and worse. It’s not fair.”
Volunteers who served Paraguayan soup, a cornbread with cream, to a group of regulars on Friday said demand has more than doubled in the last year. Those who once ate occasional meals to save some money now end up hungry.
“People are coming out of a real need,” said María Gómez, a volunteer cook. “It’s total chaos.”
A third less residents of the municipality of Avellaneda supported Milei’s libertarian party in last month’s provincial elections that in 2023, expressing nostalgia for redistributive policy of the opposition Peronist party despite its more recent reputation for financial ruin.
Milei has promised in campaign speeches to continue with his harsh austerity program. But your chainsawonce a rally staple, hasn’t been seen in months.
Most polls predict a close race between Milei’s La Libertad Avanza party and the Peronist coalition. Half of Argentina’s lower house, or 127 seats, and a third of the Senate, or 24 seats, are at stake in Sunday’s election.
At the moment controlling less than 15% of Congressthe government last managed to pass a law in March. La Libertad Avanza hopes to win enough seats to defend the austerity measures. defend presidential vetoes and impose labor and tax reforms.
There is a lot at stake. A Milei defeat could generate more pressure on the peso and force a painful devaluation of the controlled currency exchange increasing inflation and undermining the president’s main achievement.
Tired Argentines are, once again, preparing to have influence.
“Each new government comes in, criticizes the previous one, promises to do things differently and ends up being the same or worse,” said Matías Paredes, 50, a real estate broker whose foreign clientele disappeared with Milei’s strong exchange rate.
“This country moves in cycles.”