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A Familiar Face Returns to Argentina’s Presidential Palace in the Midst of Another Economic Downturn

By Emraan Ansari

 

 

Incumbent President Mauricio Macri was defeated in Argentina’s election earlier this month, with veteran political operative Alberto Fernandez rising to the Presidency, and former President Cristina Fernandez de Kirchner serving as his vice president. Argentina has found itself in a financial crisis recently, and many voters had grown tired of President Macri’s right wing, pro-business policies. Macri rose to power in 2015 by promising economic growth in the midst of a recession. His campaign promised to achieve a zero-poverty rate, reduce inflation, and tackle corruption. Unfortunately for Macri, his administration failed to achieve any of these, and he was forced to turn to risky policies to combat growing economic stagnation. In the wake of the Argentine peso depreciating in 2018, the Macri Administration appealed to the IMF for support, and received a $57 billion loan, which was the largest in history. In return, Macri promised to push for central bank independence, and to tighten monetary policy. In practice, this took the form of introducing export taxes and reducing public investment. These policies further deepened Argentina’s currency crisis, and the Peso lost roughly half its value during this period. By the time elections rolled around, 10% of Argentina’s workforce was unemployed, and the public had grown tired of Macri’s policies. Fernandez and Kirchner represented the return of leftist economic policies, and their ticket won handily, receiving 48% of the vote, to Macri’s 40%.

Fernandez and Kirchner belong to the center-left, the Peronists. Peronism is a political ideology in Argentina that initially arose with Colonel Juan Peron in the 1940’s. It does not follow traditional ideology from the left or the right, and is based off three tenets; social justice, economic independence, and political sovereignty. Observers have previously labeled Peronism a form of populism, although its supporters reject that label. It most closely resembles left-wing policies in practice, with a mixed economy and strong welfare state. The ideology of Peronism is similar to the political ideology in many Scandinavian countries, in which workers rights and wealth distribution are key tenets. The Peronists have a long history in Argentina, where they have dominated politics for decades. Mauricio Macri was the first non-Peronist politician to lead Argentina since 2003.

An important detail in Argentina’s election is the return to power of Cristina Fernandez de Kirchner. She first came to power when her husband, President Nestor Kirchner, passed away in 2007 while in office. She then won re-election and became the first woman to be elected President of Argentina. Christina Kirchner, as she is known in Argentina, ruled the country from 2007 to 2014, but left office amid allegations of corruption. She was accused of bribery, money laundering, and of covering up the role of Iran in a terrorist bombing. Despite this, Kirchner maintained strong support in Argentina, and denounced the allegations as baseless and politically motivated. Prior to the recent election, Kirchner was a sitting senator which gave her immunity from prosecution. However, many of the cases against her are ongoing.

Veteran observers of politics in Argentina believe that Alberto Fernandez will be a figurehead, while Cristina Kirchner runs the government from behind the scenes. Fernandez was formerly chief of staff to Kirchner, and has never ran for political office. Their ticket was allegedly designed with Fernandez as the candidate because Kirchner was seen as being too divisive to win the Presidency. One of the main criticisms of Kirchner was of her unsustainable economic policies. She was accused of distorting economic figures and handing out too many subsidies that destabilized Argentina’s economy. In contrast to this, Fernandez is viewed as being a more pragmatic leader, and one who will not pursue risky policies. Given their philosophical differences in how to handle financial policy, the policies they employ to turn around the economy will give a glimpse as to who is truly controlling the legislative agenda.

With the election of Alberto Fernandez, the return to Peronism in Argentina will reshape its economy. Peronists have traditionally favored a more interventionist approach in the economy, which stands in stark contrast to President Macri’s pro-business, laissez-faire policies. Upon the election result becoming public, the Argentine peso lost almost half its value, as investors worried about the impact the Fernandez government would have on the economy. One of the key complaints leading up to the election was the lack of jobs for young people throughout Argentina under Macri. With Fernandez and Kirchner in office job prospects for young people will likely improve. Additionally, for the third of Argentina’s population currently mired in poverty, Cristina Kirchner’s return to the presidential palace could represent a turn in fortune, as Kirchner previously championed generous welfare policies and social programs. The lasting legacy of President Macri in Argentina will be one of economic stagnation, which represents a far cry from what he was elected to do. Now, it is the responsibility of Alberto Fernandez to turn around Argentina’s fortunes, and stabilize the fragile economy.

 

 

 

photo: ALEJANDRO PAGNI | AFP | Getty Images

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