A major upset and uncertainty: Argentina heads to run-off

Despite overseeing record inflation and poverty levels, Argentina's Economy Minister Sergio Massa confounded expectations by scoring the most votes in Sunday's first-round election. 

He goes to a run-off against his polar opposite: the wild-haired, libertarian Javier Milei, who has vowed to take a chainsaw to Argentina's notorious public spending and dollarize the economy.

AFP takes a look at what happened and what we can expect next.

Why the surprise?

Massa and the ruling Peronist movement were seen as the underdogs amid the economic shambles that has seen Argentina hit by inflation of almost 140 percent, with 40 percent of the population living in poverty.

In line with an anti-establishment trend in the region, many analysts saw fertile ground for Milei, whose slick TikTok campaign and rock-star style rallies captivated the youth.

However, Massa came first with almost 37 percent ahead of Milei with about 30 percent of the vote.

"Against all predictions," "Surprise," headlined major media, scrambling to understand how Massa pulled it off.

How did Massa pull it off?

According to analysts, Massa's performance is due to a mixture of fear of Milei, an enduring affection for Argentina's Peronist social movement, and his spending spree to lure voters.

Massa handed out bonuses to workers and the unemployed and slashed income tax for much of the population, all while highlighting what Milei's plans to cut subsidies would mean for people's pockets.

Many economists, and the International Monetary Fund which has bailed Argentina out 22 times, agree the country needs to stop spending more than it earns.

Milei appeared at rallies with a powered-up chainsaw, vowing to cut spending by 15 percent, ditch about 10 ministries, privatise state entities and "dynamite" the Central Bank. 

And while voters are keen for change, Milei's proposals likely spooked many.

"A lot of Argentines have a lot to lose from the dismantling of the social welfare state," which millions depend upon, said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.

Milei's "chainsaw is coming straight at family budgets," he added. 

Massa, meanwhile, took "a series of economic measures that, even if they have a very serious fiscal cost in the future, benefited many in the immediate," noted political scientist Sergio Morresi of the University of Buenos Aires.

Where else did Milei falter?

Milei, an admirer of former US president Donald Trump – and who had a son of former Brazilian leader Jair Bolsonaro supporting him in his bunker on election night – has introduced ideas that do not sit well with many Argentines, analysts say.

He is against abortion, has proposed making it easier to own guns and sell organs, believes mankind's burning of fossil fuels is not the cause of climate change, and said Argentine Pope Francis represents "evil on Earth."

Lilia Lemoine, a female lawmaker candidate from his party – who won her seat – has proposed allowing men to renounce paternity if they did not want their child.

"A lot of these views are out of sync with Argentine society," said Gedan. 

"If you think Milei's success is a sign that Argentine society has become very conservative, then you're misreading Argentine politics and society. What has made him popular is his anti-establishment rhetoric," said Gedan.

What can we expect from the run-off?

Milei and Massa will contest the presidency on November 19, bringing weeks of more uncertainty, especially for the economy.

Analysts highlighted that Milei still managed a historic feat by coming from nowhere to claim second place in the first round.

"Milei, once seen as the frontrunner, now has an uphill battle to regain the momentum and stave off a defeat," said Nicolás Saldias, senior analyst with the Economist Intelligence Unit.

He will have to shift to the centre to shore up votes, and reach out to the Juntos por el Cambio coalition which came third with almost 24 percent, after insulting its leaders throughout his campaign.

Massa, who has vowed to form a "unity government" if he wins, is presenting himself as the democratic, stable hand to lead the country, but will have to win over millions of disenchanted voters. 

"The campaign promises to be extremely polarising as both candidates will appeal to fear to get voters to back their candidacies," said Saldias.

Morresi said that if the runoff is seen as a battle between authoritarianism and democracy, "the chances of the ruling party winning are very high."

"If the economic situation deteriorates... the opposition, even with a radicalised stance, have the possibility of triumphing."