In the middle of double-digit inflation and a failing economy, Argentina tossed victory into the hands of 56-year old Buenos Aires Mayor Mauricio Macri.
Macri defeated current President Cristina Kirchner’s chosen lapdog, 58-year old Daniel Scioli. The margin of victory, less than 5 points, doesn’t give Macri a mandate, but it may help towards restoring some damage done during “Kirchnerism’s” twelve-years of roaming Casa Rosada.
Scioli, the Peronist governor of Buenos Aires Province, was expected to coast to an easy victory. His association with La Presidente Kirchner was a liability that he couldn’t get past. With Kirchner’s social policies, rampant corruption and a lid on the country’s press, Scioli may be wishing he had attached his political wagon to a different star.
Kirchner’s hours-long televised rants against her opponents — both real and imagined — loss of judicial independence and press freedom during her days of Kirchnerismo didn’t help Scioli either.
The winner of the recent election is political pluralism. Kirchner entered national politics with her husband, Nestor, in 2003. The country was in the midst of recovering from paralyzing economic hardship. As time went on, the couple tried to duplicate the strategy used by the late Venezuelan strongman, Hugo Chavez. That strategy included destroying any institutional checks on presidential power and moved to install a one-party state. The outcome of the recent election means that the country has managed to turn back Peronism’s authoritarian power-grab.
Madame Kircher hands Macri a fiscal mess. South American is suffering economic weakness demonstrated by a recession in Brazil — Argentina’s leading trade partner. Macri will have just one shot at issuing a comprehensive set of policies to inspire confidence. Most observers are saying, “The sooner, the better.”
Recovery needs to start with peso stabilization. The Argentine peso is pegged at 9.5 to the (US) dollar but is marketed openly on the black market at just over 15:1. Macri has promised to remove all capital controls and let the price of currency find its market value. However, to achieve stability, Macri will have to restore the rules of a market economy. That means putting and end to the practice of printing money to finance the government.
Scioli tried to discourage Argentines throughout the campaign by assuring them that the peso adjustment would drop the purchasing power of their earnings. The fear tactics didn’t work because the country is aware that the central bank doesn’t have the dollars it needs to support the peso. Macri’s government will face that reality.
The good news fo rMacri is that much of the economy is already operating at the black-market rate, and many consumer goods have been adjusted. This explains why non-government estimates place annual inflation at over 26%, well above the official guess of 10%.
On the human rights front, Macro has said he will denounce Venezuela before the Organization of American States (OAS) for its violation of the 2001 charter. He has also pledged to shred the “memo of understanding” with Iran regarding the 1994 terrorist strike on the Jewish Community Center in the Argentine city.
Macri has also promised to restore freedom of the press, a right stolen by Kirchner in her fight with Clarin, the nation’s largest media outlet. Priority had been given by Kirchner to state-run newspapers that repeated the “company line” and preference shown to “journalists” who were on the federal payroll. Reporters with competing media outlets were often shunned during government meetings and occasionally kicked out of Kirchner’s long harangues.
Argentina’s recovery won’t be easy. But with the electoral overthrow of Kirchnerism and renewing press freedoms, the National already has a good deal to celebrate.