Can Macri’s infrastructure projects sway Argentine voters?

Power outages and other infrastructure issues weigh on the minds of voters in the run-up to the presidential election.

El presidente Mauricio Macri
The embattled government of Argentinean President Mauricio Macri is betting that public works projects will dull the edge of the current recession in advance of general elections in October [File: Argentine President's Office/Reuters]

Buenos Aires, Argentina President Mauricio Macri was gleaming in front of the press as he inaugurated a $650m highway in downtown Buenos Aires on May 27. Surrounded by members of his party and cabinet, he told reporters, “This is a perfect example of what’s going on in this moment in Argentina.”

The highway is just one example of a bevy of high-profile infrastructure projects under way as Argentine voters gear up to go to the polls in October. Macri’s government has launched subway extensions, railway lines, roads, bridges and other new projects designed to improve the lives of citizens and provide a much-needed boost to the country’s struggling economy.

But the promise of better days ahead under the current government is colliding with struggles that are happening here and now, casting doubt over whether Macri’s efforts are too little, too late to win him another term in office.

Dark clouds, no lights

Argentina’s economy is mired in a deep and protracted recession. And a massive blackout on June 16 that plunged the country into darkness has raised serious questions about the state of the nation’s power grid.

The blackout that swept the country last month is still being felt in places like La Plata, a city 70km southwest of Buenos Aires.

de la Plata
LaPlata is a city just outside of Buenos Aires that still does not have a reliable supply of power following a June 16 blackout [Agustin Marcarian/Reuters]

“We have resumed electrical service to 95 percent of clients,” reported Edesur, a major power company in Argentina. Yet, for 10 days after the massive outage, thousands of people in La Plata still had no power.

Edelap, the local power distributor, supplied electricity intermittently with portable generators, the last of which was disconnected on Thursday, according to the company’s official Twitter account. Nevertheless, locals are still using social media to vent their anger. They complain power is still not reliable.

The episode threw a spotlight on the state of the country’s infrastructure at a time when the embattled government is investing in projects that could dull the edge of the current recession ahead of the elections.

“There is obviously a government decision to increase expenditure in public works above what was budgeted, at least during this time of the year,” said Rafael Flores, an economist for ASAP, a think-tank that follows fiscal policy in Argentina. “When the budget was originally drafted for 2019, these expenditures [were substantially reduced by] 8.6 percent.”

Argentina’s economy is between a rock and a hard place, contracting as its currency is losing value. Everything is getting much more expensive for Argentineans, who are tightening their belts yet again. The International Monetary Fund (IMF) estimates inflation this year will be 47.3 percent. But meanwhile, salaries have barely budged.

Capital is becoming hard to come by for the government, too. “The cost of borrowing on international markets has become quite expensive,” said Dario Judzik, director of executive education and public policy research at Torcuato Di Tella University’s School of Government in Buenos Aires.

Despite the costs, gross government debt increased from 57 percent of gross domestic product in 2017 to 86 percent in 2018. Judzik told Al Jazeera these figures make it tough for the country to access traditional debt markets, making the IMF the country’s best hope for badly needed capital.

Argentina struck a $56.3bn standby financing deal with the IMF last year.

Recession weighs on voters

“Economic issues amount to 60 to 65 percent of concerns among voters,” Carlos Germano, head of Carlos Germano & Asociados, a political consultancy, told Al Jazeera.

The Macri government won an election four years ago with a mandate to reform an economy that was staggering under the weight of massive populist subsidies. The government moved to eliminate all kinds of handouts that made utilities like electricity and water very cheap and allowed for a generous social safety net. Many of these moves were welcomed by international investors, but proved unpopular at home.

In years when there are elections, construction speeds up. What would have been done in a year, is completed in months to produce an electoral impact.

by Rafael Flores, an economist for ASAP

Now, with national elections only four months away, the current spending on infrastructure in Argentina’s big cities is seen by many as a last-ditch effort to make up for years of belt-tightening.

“In this economic breakdown, to have a chance to make it into a run-off public works have a role,” Germano told Al Jazeera.

Argentine President Mauricio Macri
Argentina’s direct investments in infrastructure are dramatically rising as the presidential election comes closer [Macrio Campaign/Reuters]

Direct investments by the federal government rose at an annualised rate of 53 percent during the first four months of 2019 to 22 billion Argentinean pesos ($500m), said Flores. That is up from 14.5 billion ($330m) for the same period in 2018.

“In years when there are elections, construction speeds up. What would have been done in a year, is completed in months to produce an electoral impact,” Flores said.

Various ministries – most notably the Ministry of the Interior and Transport, which is in charge of the most visible projects – did not respond to Al Jazeera’s requests for comment. But researchers say many of the projects that are now being completed have been slowly progressing for years. The difference now is that there is obvious momentum.

“Many of these projects finished this year were started in 2016 or 2017. This infrastructure is key to development and had been postponed for current expenses or other short-term needs,” said Judzik.

Politics are in overdrive

Primaries for the national election are scheduled for August 11 and the election itself will be held on October 27. If no ticket wins an outright majority or a 10 percentage point difference over the runner-up, a run-off will be held on November 24.

Macri said on June 11 that he will seek re-election with an opposition Peronist Senator, Miguel Angel Pichetto, as his running mate.

“In general, public opinion is divided in black or white,” Germano explained.

Germano believes the race will likely pitch populist forces against fiscal conservatives. Opposition candidate Alberto Fernandez and his running mate, the populist and divisive former President Cristina Fernandez de Kirchner, are working to build support based on a populist platform. Incumbent President Macri and Pichetto are working to shore up support for their reformist agenda.

If the ongoing economic contraction slows – due in part to the impact of the increasing investments in infrastructure – Germano believes Macri’s standing in opinion polls will rise.

Nevertheless, despite these investments, the economic outlook for 2020 is still grim and the winner of the presidential race, regardless of who it is, will need to drastically reduce public spending. That could mean that the current spate of rapid construction may soon come to an end.

At the very least, construction is likely to slow.

“Fiscal savings have to continue,” Flores said. “And as it happens in non-election years, public projects may see a reduction.”