Argentina: At the Cusp of Change, Or, Continuity

October 11, 2007October 11, 2007 COHA

A tumultuous past, a potentially problematic future
The candidates and projections of their political fate
What will another Kirchner presidency mean for Argentina?
Ideas about the nation's future
Peronist-bred mystifications go on

With the presidential elections coming up on October 28, Argentina is astir with speculation regarding its top candidates. First Lady and president presumptive, Senator Cristina Fernandez de Kirchner, maintains first place in the polls, followed by Elisa Carrió, an outspoken critic of the current Kirchner administration, and Roberto Lavagna, former economy minister to that administration as well as the man credited with pulling Argentina out of its recent economic nightmare. The upcoming election, aside from all its innate drama, marks a very important milestone for the future of the Argentine polity as well as its economy.

In spite of Argentina's devastating economic recession earlier in the decade, coupled with its recent lapse into political instability, the country has been slowly recovering; it now needs a president capable of ensuring continued progress in key areas such as the economy, fighting crime, and reasserting the nation's role on the world stage. With the political atmosphere in the hemisphere growing more and more polarized by the unhealthy relations between the Bush administration and Venezuela's Hugo Chávez, Argentina's next president must develop a foreign policy skill which can balance its ties with these two disputatious powers all the while working at pacifying the internal unrest of a nation that is still stricken by troubling memories of the all-too-recent past.

The All–Too–Recent Past
After a century of intermittent military rule, Argentina's infrastructure and economy were in shambles by the early 1980's, after the last and undoubted worst stretch of misrule by the generals (1976-83). Before then, every government was either forcibly removed through a coup or had collapsed from within. However, the nation's future began to look brighter with the election of Carlos Menem, in 1989. With the economy in the throes of awesome inflation and beset by huge external debts—much of which had been contracted by the military— Menem chose to aggressively pursue trade liberalization and privatization strategies, thus providing some positive growth for the country. But not all problems were solved, and with staggering corruption and high unemployment on his heels, Menem lost his re-election bid in 1999. What rapidly followed was a series of failed administrations ending in the appointment of Eduardo Duhalde, through a mandate from Congress, in January of 2002. Duhalde successfully backtracked to undo some of the harm done by his predecessors, and in 2003, Nestor Kirchner assumed the presidency. Although he was scheduled to run against former President Menem in a second round of elections in mid May, Menem backed out at the last minute because of projections that Kirchner would win with 70 percent of the vote, leaving Kirchner unopposed in his bid for the presidency.

Considered a largely successful presidency, Kirchner has eradicated a number of distressed issues on the nation's agenda that had been the cause of grave social unrest in the country. In response to the "Dirty War," (the disappearance of tens of thousands of Argentines during the period of 1976 to 1983), President Kirchner took decisive action against the military's top officers, who were viewed as being culpable of human rights violations, vowing to review their amnesty and prosecute those responsible for the atrocities of the "Dirty War." He also strongly supported the Supreme Court in its pursuit of justice in the arena of killings under military rule.

Kirchner's Transformed Economy
Economically, Kirchner's term has overseen much improvement in the country's financial system, with steadily increasing growth rates in the economy throughout his term as well as a healthy decrease in the unemployment rate, from 24 percent in 2002 to about 11 percent in 2006. The Kirchner administration's stormy relationship with the International Monetary Fund (IMF) proved very productive for the country, and by 2006 Argentina had paid back its entire $9.5 billion dollar debt to the IMF leaving a bitter legacy of tensions between them. That said, Argentina's current debt remains high, at approximately 61 percent of the GDP as of 2006. Some argue that the Kirchner administration has become too friendly with the Chávez administration of Venezuela, especially after a $400 million investment in a natural gas plant in Argentina had been made. In addition, Chávez has bought $1 billion in Argentine bonds; another example of what critics say is a Chávez plot to win influence over the region via his petro dollars. Whatever the motive, it is clear that Venezuela's investment has significantly helped the country, and this help has come through in a form far less officious than would be the case with the IMF.

Still, the rate of inflation has been a persisting headache for Kirchner. At the center of the issue are the repeated scandals purportedly involving the administration in manipulating the numbers. The resignation in September of Beatriz Paglieri, the official in charge of producing monthly price data saw the culmination of these complaints. With varying versions of the exact nature of the inflation figure, there is much suspicion regarding the administration's truthfulness when it comes to this matter. The CIA World Factbook reported the inflation number to be 9.8 percent in 2006; Reuters reports the twelve month inflation through September 2007 to be 8.6 percent. Other sources claim, less reliably, that inflation is now in the double digits.

The Top Three of 14
There are fourteen candidates on the ballot for the October 28 election, but only three of those are really known to the public. One of the two well-known female candidates in this race is Elisa Carrió, widely recognized for her crusade against corruption. She is a firm critic of the Kirchner administration and has served two terms as a congresswoman representing her poor, northern home province, Chaco. Her policies are centered on the need for transparency in government, and include a promise to clean up Indec, the statistics agency accused of data manipulation, as well as to cut back the government's focus on ties with Venezuela and instead focus on improving relationships with close neighbors such as Uruguay and Chile. In the September 16 provincial elections, all did not go well in Chaco. The candidate from Kirchner's Peronist coalition won by a mere 2,000 votes, the equivalent of less than half of a percentage point, adding more fuel to Carrió's anti-corruption fire. In response to this, she has gone so far as to express concern over the legitimacy of the planning going into the upcoming presidential election.

Carrió's platform is neither sensationalist nor pro forma. In 2006, Argentina was ranked number 93 of 163 countries in Transparency International's Corruption Perceptions Index, with a score of 2.9. This score is on a scale of zero to ten, with zero being "highly corrupt." In contrast, neighbor Chile was ranked at number 20, the same rank as the U.S., both receiving a 7.3 In addition, Carrió's personal run-in with the law may further prove her point. In a bizarre series of events, she was acquitted of slander charges brought against her by a Patagonian fisherman, Héctor Antonio, who Carrió had earlier implicated in the murder of fisheries businessman Carlos Espinoza. Carrió had suggested that the murder was the work of a mafia with government ties. It is debatable whether this claim will help her campaign or hurt it, but it certainly raised her media profile.

A second top contender, Mr. Roberto Lavagna is the architect of the economic policies which dug Argentina out of the deep and dirty recession of 2002, but as Kirchner's former economy minister, he may have not received all of the credit he deserved. He is now running for president himself, leveling serious criticisms at the administration that formerly employed him. He has focused his campaign in three areas: fighting crime, alleviating poverty, and creating jobs. According to the CIA World Factbook, Argentina faces an issue of increasing drug use and money-laundering, particularly in the Tri-Border Area, in the north of Argentina where it converges with Brazil and Paraguay. The rampant trafficking of humans, specifically young women is a prominent concern as well. These girls usually come from Paraguay, but also from Bolivia, Brazil, the Dominican Republic, Colombia, and Chile, and are sold into prostitution or for labor exploitation. Additionally Lavagna hopes to increase the police presence in areas that have unusually high crime rates.

To ameliorate poverty, Lavagna has a succinct plan of investing 2.5 percent of the national GDP per year in building homes to cope with the housing shortage. He also has pledged to eradicate the most extreme forms of poverty within the four years of his would-be presidency. When it comes to foreign policy concerns, Lavagna staunchly criticizes President Kirchner's close relations with Chávez, claiming that Chávez is attempting to pervert the South American organization Mercosur and make it into a form of a political alliance against the U.S. Like Carrió, he would instead focus on bettering relations with Argentina's neighbors in the Mercosur trading bloc and restoring the body's focus on trade liberalization and economic integration.

Cristina
The third and most buzz worthy of the three candidates is Cristina Fernandez de Kirchner. In the opinion of many, the election has been all but won by this unique candidate. As the present first lady, she already has a foot in the door of the presidential office, and as a Senator for Buenos Aires Province, she is an extremely well-known politician with formidable credentials. If elected, she is widely expected to continue with the economic programs started by her husband during his administration, including an initiative regarding the taming of inflation and pursuing surpluses in both trade and the annual budget. However, Mrs. Kirchner is a bit more diplomatic than her husband and has asked certain business leaders that were shunned by him to enter into a pact with workers and the government. It is already clear that Mrs. Kirchner would pursue a wider and more active foreign policy by traveling to many more countries than was the case with her husband, while trying to maintain positive relations with Venezuela as well as the U.S., both of which she recently visited. However, she has yet to take a concrete stance regarding pressing national issues like the Uruguay pulp mill dispute, where she endorsed her husband's decision to push the issue aside until after the election.

Through a series of visits to a number of important political centers, including Europe, Mexico, the U.S. and other neighboring nations, Senator Kirchner appears to already have begun to identify herself with several foreign policy initiatives. During her most recent visit to Brazil on October 3, the first lady met with President Luíz Ignacio Lula da Silva as well as a group of influential Brazilian businessmen. Topics of discussion with President da Silva included deepening the relationship between Brazil and Argentina via Mercosur as well as tackling the issue of Venezuela's proposed membership in the organization.

The Kirchners have received much criticism regarding speculation that they are attempting to form a dynasty. The incumbent president is expected to run again in the next election in 2011, thus the basis of the perhaps whimsical theory that they plan to alternate presidencies. In response to this supposition, Senator Kirchner, in a TIME interview, responded: "I suggest you look at the U.S. Without getting involved in internal U.S. politics, I believe Hillary Clinton will be the next U.S. President, and I think it will be a good thing for the U.S. to have a woman in the White House. But if she does, the country will have been ruled by two families, the Bushes and Clintons, for a quarter century."

Argentina's Future
Despite Argentina's recent political and economic successes, a long road still lies ahead. There is no doubt that the next president will have to be effective, concise, and aggressive in his or her policies toward the economy, the question of poverty (which is still a serious issue in poorer provinces like Chaco), crime rates, and transparency in government. Although some debt has been repaid to the international lending agencies and to private bondholders, Argentina still owes an approximate $6.3 billion to the Paris Club of creditor nations. On top of these pressing internal issues lie the ever controversial politics between several of the powers of the Western Hemisphere. With regards to the Venezuela-Argentina relationship, a State Department official said in a COHA interview that the department always looks forward to working with any government which is democratically elected, but conceded that while they do not always agree with what the Venezuelan government does, it is each nation's choice with whom they wish to cooperate. While polls suggest that Mrs. Kirchner will win the presidency, the troubles for her campaign, which were witnessed in the provincial elections in Chaco and Córdoba, cast some doubt on the universality of her support or the inevitability of her victory.