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Though legislative elections took place in Argentina on June 28, the topic on everyone’s mind now is the 2011 presidential elections. The ruling party, Front for Victory, (FPV—Frente Para La Victoria, which includes the Justicialist Party) lost a total of 24 deputies and four senators, a number which includes both their own seats and those of their political allies. The party’s popularity dropped to 31.2% nationally. The government of President Cristina Fernández de Kirchner has been weakened by its loss of control in both legislative chambers.
The ex-president, Néstor Kirchner, moved up the elections, conducted the campaign, and headed the FPV’s list of candidates in the province of Buenos Aires. He encouraged Daniel Scioli, the province’s governor, and some city mayors to run. These politicians already occupied public positions and had no intention of leaving them to become deputies—as the gauchos say, he threw all the meat on the barbeque. Néstor Kirchner had set the elections up as a national plebiscite.
The surprise of this loss—the first for the Justicialist Party (PJ, Partido Justicialista) since 2003—diminishes Cristina Fernández’s leadership enormously for the two years that remain of her presidential term. It also wipes out her chances of getting re-elected, and even leaves Governor Scioli, a moderate, with little chance of winning as a Kirchnerist presidential candidate in 2011.
The ruling party lost seats in important areas such as Santa Fé, Córdoba, Mendoza, Santa Cruz, and the federal capital. But undoubtedly the most difficult loss to take in was that of the province of Buenos Aires, an area where Kirchner always measured her power. There, the Colombian businessman, Francisco De Narváez, won a minor victory of two points above Néstor Kirchner. De Narváez has a confused Peronist identity and is a Unión-PRO coalition ally of the Buenos Aires chief of government, conservative Mauricio Macri.
The Unión-PRO coalition won in the capital with the deputy candidate Gabriela Michetti, who resigned from her role as second in charge of the city government to head the Buenos Aires list of candidates for the Deputy chamber. This marks the consolidation of a new right, with little historical political tradition, which is emerging from the world of business: Macri came to power through his role as president of Boca Juniors (a popular soccer club) while De Narváez was in charge of Casa Tía, a company that earned him a fortune somewhere in the region of 500 million dollars. Each is in some way a product of publicity marketing and their political platforms, apart from promising to battle economic insecurity, hold few clear proposals. During the campaign, the three main spokespeople of the coalition disagreed on whether to nationalize or privatize certain public companies.
As a result of the recent elections, Mauricio Macri dreams of reaching the armchair of the presidential palace in 2011. He knows, however, that although Unión-PRO has the support of the middle classes and also of some poorer districts of Buenos Aires, the lack of any national structure in Unión-PRO will lead him to seek allies in the Justicialist Party sooner rather than later.
Another winner of the electoral contest was the ex-governor of Santa Fé, Carlos Reutemann. A Peronist who opposes the Kirchners, he achieved re-election as a senator with a mere one-point margin between him and Rubén Giustiniani, who was the candidate supported by Hermes Binner, the current socialist governor of Santa Fé. Now, he looks like a possible contender for leadership of the Justicialist Party after the demise of the Kirchners. Reutemann’s triumph has been attributed to his militancy in favor of the agricultural sector in recent conflicts over export taxation. Due to his sober profile, Reutemann is now the most sought-after member of the local establishment.
The non-Peronist opposition of the Civic and Social Agreement (Acuerdo Cívico y Social)—a center-right coalition made up of the Radical Civic Union (UCR, Unión Cívica Radical), the Civic Coalition (CC, Coalición Cívica), supporters of the current vice president, and some blocks of the Socialist Party (PS, Partido Socialista)—also came out well in these elections. Although the Acuerdo Cívico y Social didn’t get particularly good results in the capital, finishing in third place, it gained 13 national seats in the Deputies chamber and three in the Senate. The vice president, Julio Cobos, whose preferred candidate Ernesto Sanz won a Senate seat in Mendoza, became the figurehead of the non-Peronist opposition and a possible candidate for the presidency. So it was that once again a radical Argentine politician who, after his stand-off with the president over the controversial export tax, left his party to join the Kirchners only to later return to his party origins. Cobos assures us, apparently unaware of the inherent contradictions, that his campaign against the Kirchners will be waged from the vice presidential office.
The other strand of non-Peronist opposition is currently led by the cinema director-turned-Deputy-elect Pino Solanas. The Proyecto Sur (Southern Project), whose campaign followed a left-nationalist line in defense of national patrimony and natural resources, surprised everyone by achieving second place behind Gabriella Michetti in the federal capital. In his million-peso campaign, Solanas represented a vote for ethics and against the political establishment; Proyecto Sur’s funds were small and its candidates were known for their historic political commitment.
This focus on presidential candidates confirms several old Argentine tendencies: the crumbling of political parties to give way to personality politics; territorialization and a hyper-presidency. The symbolic configuration of the center-left has also come to an end. This had been in the making for several years as regional tendencies have increased and those involved have shifted to the right. This swing to the right has as much to do with new ideological tendencies in the country as with governmental errors, particularly under the leadership of Cristina Fernández.
Interpretations of the Defeat
On the same day, June 29, the government tried to repair the damage. In addition to a press conference where the president recognized defeat—although in sarcastic tones—Néstor Kirchner decided to dissociate himself from the leadership of the Justicialist Party and pass his responsibility on to Governor Scioli. The end of the Kirchnerist era left Peronism leaderless and the party focusing inward in search of possible successors.
In the past few weeks, Scioli has tried to engage with the leaders of the Justicialist Party, whose candidates enjoyed a comfortable win—José Luis Gioja, of San Juan; Mario Das Neves, of Chubut; José Alperovich, of Tucuman; Jorge Capitanich, of the Chaco; and Juan Urtubey, of Salta; and their allies—in order to guarantee President Cristina Fernandez’ ability to continue to govern in the coming years. They know that another rift in leadership or the elections being moved up would harm the Justicialist Party in their coalition and prepare the ground for radical opposition and dissident Peronism.
Despite this, the governors took advantage of the weakened Kirchners to put neglected items back on the agenda: taxation powers for the provinces; export taxes on agricultural products; and a more orthodox economic model. As the sociologist Marcos Nivaro writes, the empowerment of these provincial and municipal leaders creates the dangerous possibility of moving toward a chaotic and disorganized decentralization.
Days after this internal reorganization in the FPV, came the cabinet changes. The resignation of the Minister of Health, Graciela Ocaña—which was not due to the elections but to the swine flu emergency—was followed by the resignation of the Secretary of Transport Ricardo Jaime, a particularly controversial character accused several times of corruption.
On Wednesday July 8, the president announced the new cabinet: the former head of ANSES (National Social Security Administration), as well as architect of the AFJP (Retirement and Pension Fund Administration) and the transfer of retirement funds to the state, Amado Boudou, replaced Carlos Fernández in the Ministry of Economy. The role of cabinet chief went to the previous Minister for Justice and Security, Aníbal Fernández. Fernández was a civil servant from the government of Eduardo Duhalde but is loyal to the Kirchners. Julio Alak, previously in charge of the Aerolíneas Argentinas airline company, took over from Fernández. Jorge Coscia became Secretary of Culture and Diego Bossio, State Director in the Mortgage Bank, took charge of ANSES.
With this reshuffle, some previously important issues began to resurface. Firstly, there is no longer the possibility of a return to coalition strategy (transversalidad) bringing diverging progressive political sectors into an alliance with the PJ.
The reshuffle also showed that the distance between the Kirchners and those who don’t trust them remains. The levels of suspicion in the ranks of politics and society are most apparent in the continued presence of Guillermo Moreno as Secretary of Commerce. Moreno is the Kirchners’ most controversial cabinet member.
Nevertheless, on July 9, during the Independence celebrations, Cristina Fernández made a surprise call on all manufacturing industries to come to the negotiating table, “to enter a new era.” This signaled a new commitment to political reform on the part of Fernandez. Where this road to new bridge-building will lead remains to be seen.
Kirchnerism has its origins in the Argentine economic crisis of 2001. The process developed by the Kirchners came out of that period and the subsequent need to rebuild presidential authority vertically. A new economic model and political order were also necessary. These factors created a Kirchnerist style that is top-down, with little prospects for power sharing or creating alliances with other political groups, and marked by a sense of urgency and an “all-or-nothing” logic.
Coalition building was a victim of this political style. The slightly radical “Concertación Plural” alliance failed too. But the Kirchnerist style also meant that left wing and social sector allies such as Libres del Sur gradually turned to other paths. As Maristella Svampa points out, the hegemony of the Kirchners did not depend on creating and strengthening social bases, but rather on highlighting contradictions. Although they boasted of their social achievements, they built a clientilist model and boosted the unequal redistribution of wealth. At the same time as waving the flags of the social movements, they stigmatized, criminalized, and made invisible the social organizations that did not come to the table to negotiate.
The flaws of this system were not based merely in its form but also in its content, leading to the loss of support from allied groups. Between 2003 and 2006 macroeconomic leadership was good, with a high and relatively stable exchange rate stimulating internal productivity and employment. This bore the fruit of growth, employment, and social indicators, but the Kirchners could not deal with more difficult times.
Faced with the rise in inflation rates, they preferred to sweep the problem under the carpet rather than find a coherent way of coping. The result was the intervention of the National Institute of Statistics and Censuses (Indec, Instituto Nacional de Estadísticas y Censos), so today the exact figures for production, employment, inflation, and poverty in the country are unknown. Paradoxically, this creates the perception that the economic situation is worse than it is.
In the discussion over Resolution 125 and the export taxes on soy, the lack of credibility was evident again: the Kirchners could not manage the legitimate transfer of finance because they did not have a development model that justified it or the political capital necessary to do it.
This sloppiness made the Kirchners lose the support of the middle class—which prefers less off-the-cuff policy-making—and of the working and lower classes who protested the rise in food and basic living costs. In the end, due to the conflict with the agricultural sector, the government lost the rural vote, which had been key to the election of Cristina Fernández in 2007.
Perhaps the most significant reform in the cabinet is the decision to change the tax officer. Faced with the negative impacts of the international financial crisis, the government needs to recover confidence through a figure that carries weight. This needs to be somebody who can communicate policies and read the social expectations of the people. Amado Boudou will not have an easy ride, especially now that the adjustment-loving establishment continues with its array of conditions: postponement of salary negotiations due to the current economic crisis; lowering of taxes; an end to state intervention in the economy; and the re-opening of negotiations with the Paris Club and the investors in national bonds who rejected the 2005 exchange and have outstanding law suits against the government.
Boudou’s commitment is to wait until the markets calm in order to reach an agreement with the bond brokers and with the Paris Club, and meanwhile to keep working with Brazil on a change of conditions for International Monetary Fund (IMF) credits. Both countries hope to get loans from the international organization without having to take on structural adjustments.
According to the new minister, the economic response to the recession is a state that plays a countercyclical role in the current economic situation, pouring all available funds into stimulating consumption and investment. One of the most promising methods for the success of such a plan in the near future is the Economic and Social Council (Consejo Económico y Social), the collaborative tripartite body that brings together business and unions in designing economic policy.
It is still not known whether Boudou will respond to the Argentine Industrial Union (UIA, Unión Industrial Argentina), which is linked to the Liason Committee (Mesa de Enlace) made up of four rural bodies whose goal is to implement a devalued exchanged rate. Their proposal was rejected by Hugo Moyano, the head of the General Labor Confederation (CGT, Confederación General del Trabajo) and one of the government’s principal allies. He spoke out against the prospect of a jump in the exchange rate, and warned that buying power of wages should not be decreased.
The political opposition whose deputies and senators will assume their roles December 10 also hopes to make gains in the coming legislative sessions. The check tax will be on the agenda, as will the ending of the superpowers in the Executive and of the current composition of the Magistrates’ Council, the state body responsible for appointing judges.
The destiny of the new Broadcasting Law must also be resolved. The law was designed by a panel of specialists and social organizations. It addresses the issue of the Clarín Group, a media monopoly which is openly set against the national government. This law is a key factor in the democratization of the media. The current law has existed since the last military dictatorship, and contains no regulations for new technologies.
The Kirchner leadership seems to be one of the main contributing factors to this national shift to the right. The most important thing they can do now is recover public confidence, especially in the area of statistical manipulation. The global financial crisis is not particularly severe in Argentina when compared with other world economies. But now more than ever it is important to recognize the recession, inflation, the rise in poverty, and the loss of jobs, in order to design appropriate policies for the future.
Translated by Nalina Eggert.
LUCIA ALVAREZ is an independent journalist in Buenos Aires and assistant at the International Political Program of the Public Policy Laboratory in addition to being an analyst for the Americas Program (www.americaspolicy.org). She can be reached at: luciaalc(a)yahoo.com.ar.