Javier Milei is Axel Kicillof’s nemesis—and vice versa. They are both in their early 50s – President Milei is only 11 months older than Kicillof, the governor of Buenos Aires Province. They are both economists and both Libras in the Zodiac. They entered politics thanks to their economic ideas and both face the tough generational task of fixing Argentina’s economy.
Their similarities arguably end there: they are both potential contenders for the presidency in 2027.
This week, they clashed publicly over a major investment project by YPF, the energy company managed by the federal government. YPF announced it had chosen the Patagonian province of Río Negro to host the hub of a major Liquefied Natural Gas (LNG) project it is leading in partnership with Malaysia’s Petronas. When a Memorandum of Understanding between the companies was signed in 2022 under then-President Alberto Fernández, it was assumed the hub would be in the port city of Bahía Blanca, Buenos Aires Province.
This would have been the case had Peronist candidate Sergio Massa won the election in 2023 or if the ruling coalition in charge had gotten its act together. Only in October, 2023, amid the presidential campaign and after almost two years of delays, did the Lower House of Congress approve legislation providing substantial benefits for LNG development, including the creation of a “Regime for the Promotion of Major LNG Investment Projects.”
Milei’s rise to power changed the sectorial approach and expedited the process. At the legislative level, Milei introduced the RIGI Act, which Congress passed into law in late June, and the Casa Rosada is now fine-tuning. The name RIGI is notably similar to the LNG bill sponsored by the Peronists last year: Regime for Major Investment Incentives. However, RIGI offers benefits for multiple sectors, almost across the board. In terms of content, it is slightly more favourable to foreign investors. For instance, while the previous bill proposed that investors have free access to 50 percent of their export dollars, the latest RIGI bill grants them 100 percent access.
Despite their ideological differences, Milei and Kicillof are not far apart on the need to develop Argentina’s natural resources. During Kicillof’s tenure as economy minister under President Cristina Kirchner, Argentina nationalised YPF in 2012 but placed it under professional management led by Miguel Galuccio. Milei, despite campaigning on a platform of reducing state ownership in businesses, did not reprivatise YPF. The people he appointed to run it, led by Horacio Marín, also do not believe the company should be privatised.
Still, Milei stated two weeks ago that YPF’s LNG investment, which could total US$30 billion, would not go to Buenos Aires because Kicillof was “a Communist” and “a serial expropriator.”
The President has 2027 in mind – it is a disproportionate attack reflecting the futility of much of Argentine political conflict and directly impacting the country’s economic trajectory. As questionable as the method used to expropriate YPF might have been (as ruled by a New York court), Kicillof does not have a record of numerous nationalisations, just as Milei is, so far, far from being a fascist—especially when viewed through the prism of the Bolivarian regime in Venezuela which some of Milei’s critics still endorse.
YPF argued that the decision to choose Río Negro was based on purely technical considerations. It said pipelines from Vaca Muerta to Punta Colorada would be shorter (and thus cheaper), there is more available land (which is also cheaper), and the port waters are deeper (requiring less dredging, hence cheaper). Yet for a project that would only materialise around 2030, making such a high-profile decision at this political moment seemed highly political.
Kicillof is undoubtedly the immediate loser in this bout, but it might be too soon to declare the fight over: eight years is a marathon rather than a sprint in Argentine political terms. The real winners are not only Río Negro but also the Patagonian governors who supported Governor Alberto Weretilneck’s bid, starting with “Vaca Muerta home” Neuquén. Sitting on energy riches with the potential to change the country’s economic equation, Patagonian leaders are striving to form a consistent coalition of interests to develop their region—hopefully making Argentina somewhat more federal. Milei is helping them in this effort.
* Marcelo J. García is a political analyst and Director for the Americas for the risk consultancy Horizon
--TIMES
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