COLUMN | Not All Peronists Are the Same

Photo Presidency of Argentina

Diario Financiero, Wednesday, October 30, 2019

JUAN PABLO TORO V.

The strange aspect of the recent Argentine elections is not that Alberto and Cristina Fernández won the Presidency and Vice Presidency. It was simply necessary for the Peronists to unite, who, as Jorge Luis Borges said, are ‘incorrigible’ by nature.

Perhaps the most surprising element is that Mauricio Macri managed to secure 40% of the votes and his forces captured nearly half of Congress, despite the evident fact that the center-right leader could not fulfill his goal of reviving the economy. With inflation hovering around 50%, a poverty rate of 35%, and a declining GDP (-3.1% in 2019, according to the IMF), he had very little to offer. The lack of macroeconomic results was compounded by a discourse of ‘putting the culture of work first’ and ‘personal effort’ against state subsidies, which clashed with a populist tradition entrenched for decades.

Even accepting his mediocre performance, Macri will go down in history as the first center-right President and the first non-Peronist leader to complete his term. This may seem logical for many countries accustomed to alternation, but not for Argentina. Therefore, perhaps the key to understanding what Macri represented lies in his political legacy. In a gesture that Cristina did not extend to him four years ago, this President-candidate invited his opponent to the Casa Rosada through the main entrance, where he committed to an orderly transition. These are normal republican practices in many countries, but not common in Argentina.

The coalition ‘Cambiemos’ also retains 119 seats in the Lower House, compared to 120 for the Justicialist Party/Kirchnerism, effectively creating a new bipartisanship. This serves as a guarantee that the future government, and especially Cristina, will not be able to attempt to undermine institutions as she did with the Judiciary, the Armed Forces, the press, etc. Reviving a system of checks and balances is a significant achievement, considering that Cambiemos is a power project that was deliberately constructed without the spontaneity that characterizes politics across the Andes.

Although 48% of voters told the current government that they are not open to experiments, Fernández and Fernández will also have their hands tied when it comes to attempting to revive the economy by repeating K formulas of unchecked fiscal spending and discretionary public works concessions.

A debt of US$ 57 billion with the International Monetary Fund, a Brazil uncertain about continuing in Mercosur, a trade war between the U.S. and China, a Venezuela without petrodollars to share, and dwindling international reserves should impose a dose of realism. Although in Argentina there are various resources to manipulate figures when they do not add up—such as eliminating the inflation index, currency controls, appropriating pensions, and setting tariffs—the outcome is already known.

Another obstacle for the Fernández government relates to the corruption cases facing Cristina. The developments in the multiple processes and the evidence that continues to emerge will create constant tension for the government and within it.

‘Argentina is a country that is evolving, perhaps like never before in its history,’ Macri told me in one of the few interviews he gave to a Chilean media outlet as President. He is right. He could not retain the government, but it became clear that there is a 40% of Argentines who reject populist fantasies (something that was nonexistent until recently) and who have leaders that will remain vigilant (like Buenos Aires Mayor Horacio Larreta) exercising democratic controls while waiting to return to power. Not all Peronists are the same.

Juan Pablo Toro
Executive Director AthenaLab

Source: Diario Financiero