The cards are on the table. The government and a fragmented opposition have chosen their candidates for the midterms, which have taken on the character of a plebiscite. Either Macri finds fresh momentum to deepen the reforms changing Argentina’s economic and institutional structure or he will run into a barrier that will complicate the second half of his term. An uncertain election in which all sides will try to present themselves as the lesser evil in the face of the abyss threatened by their adversary.
By Sebastián Lacunza
Editor-in-Chief
@sebalacunza
The Pink House seems to be optimistic about August’s primaries and October’s general elections. Their perception lies in the expectation of winning about 35 percent of the vote against a Peronist opposition divided into three options in Buenos Aires province that marks the mother of all battles, while something similar plays out in other districts.
That is to say, when counting up the votes, that more than one-third of the support is what Let’s Change could muster in all the country — although it may seem a modest goal for Mauricio Macri’s stated intention to refound the Republic — and that it could be enough to proclaim the ruling coalition the winner against any Peronist brand.
While certain key sectors of society have clearly aired their enthusiastic support for the Macri government, both on and off the record, they do not show the same optimism about the polls in August. One of them is the world of finance and big business. The banks, their analysts and the major business entities (such as the AEA Argentine Business Association grouping Techint, Arcor, Clarín Group, IRSA, Roggio, Santander, etc.) see in Macri an exceptional chance to get Argentina on the path to a market-based economy and to block populism, while others denounce a voracious attempt to drastically increase their rate of profit.
The market-makers seem hesitant about the near future. They fear that within 43 days, the polls may give Cristina Fernández de Kirchner (CFK) about 40 percent of the votes in Buenos Aires province. That is to say, a position of high competitiveness and probably a clear victory. If that happens, it would be difficult to prevent newspapers’ front pages and web portals with the former president as their unique protagonist.
“The August-October results will permit multiple readings, so that the winner will be more of a construction set by those who manage to impose their interpretation,” argues Julio Burdman, a professor with the University of Buenos Aires who holds a doctorate in political science from the Institute of Political Studies in Paris.
“The elections can be seen through the lens of the national result, which could be favourable for the government; the podium in Buenos Aires province, which is open; or the number of provinces or seats won by each front,” he told the Herald. “In any scenario, it will be very controversial to add (in) Peronist winners, since Peronism has 12 or 13 different denominations in different provinces.”
Burdman is sceptical over whether the media (which today is broadly on good terms with the Macri administration, with the Clarín Group benefitting the most from the relationship) can influence the choices of voters more than the economic reality in their homes and neighbourhoods.
“(The media’s) influence shouldn’t be overestimated. Their main role will be as interpreters of the result rather than as factotums of the voters’ decision,” the political consultant specified.
“A scenario of inescapable defeat for the government will be a victory for CFK and a mediocre result nationwide — it will become difficult for some leader writer to proclaim a victory in Macri’s name, in that case.”
If the major businesses and some media are in tune with Macri, the list of optimistic views of the president’s performance in office so far can be joined by the diplomatic community of the central countries in Buenos Aires.
That’s no secret for anyone. Heads of state and governments have set the tone during the impressive international schedule which the Argentine president managed to build in his first year and a half in office, so that the representatives of those countries in Buenos Aires could hardly play another musical score. Barack Obama, Donald Trump, Theresa May, Angela Merkel, Mariano Rajoy, Matteo Renzi, Emmanuel Macron, Shinzo Abe, Christine Lagarde, Michel Temer, Juan Manuel Santos and Enrique Peña Nieto all agreed to praise the birth of “a new era” in Argentina.
But some diplomats consulted by the Herald confirm there are doubts about the future.
“In the past (referring to CFK), things were done (through) causing damage and we are often asked if they can be repeated. Will Macri last? Will he to have to leave office sooner rather than later?” are frequent concerns that some embassies have received from businessmen and political observers, the Herald has learned.
“It will be a plebiscite in each and every one of the 23 provinces, and the City, but a national discourse will also be superimposed, (one) which will be expressed by the amplified power of the leadership in Buenos Aires,” said Mario Riorda, a former political science dean at the Catholic University of Córdoba and now a consultant for the entire Latin American region. “Their ideological questions about the past on the part of the government will clash with the utilitarian economic vote stressed by the opposition with greater force from Civic Unity (CFK’s new political front).”
“Both stances lack a certain future,” indicates Riorda, thus casting further mystery over what is to come.
Burdman agrees that these elections are more like a plebiscite than anything else.
“Both the Macri and Kirchnerite camps have injected a lot of tension into these elections because their own survival is at stake. Macri is seeking eight years of government (i.e. a second term) for the possibility of reforms, including austerity, while Kirchnerism presents the issue as a clash of models and the possibility of claiming leadership over Peronism,” he concludes. “A plebiscite slant, customary in midterm elections.”
As outlined by the analyst, the election will not be easy to read.
A Peronism allied to the left and centre-left and dominated by a strongly ideological discourse of all-out opposition exists only in Buenos Aires province and the Federal Capital. In the rest of the country, Kirchnerism has teamed up with local Peronist leaderships to form a tone of opposition to Macri, (four Patagonian provinces, Santa Fe, Mendoza, Tucumán and various northern and central provinces), while in others they offer open rivalry to the locally ruling Peronist groups headed by governors which today seem very close to the Pink House (Córdoba, Salta and Tierra del Fuego). In some of the provinces where there is some integration between Kirchnerism and Peronism, sectors headed by the former president have registered an alternative front, so that there are followers of CFK, in more than one electoral front.
Or, as mathematical purists might put it, it’s a zero-sum game.
The opposite side of the coin
The opposite side of the coin to this jigsaw puzzle is Macri’s Let’s Change (Cambiemos) coalition, which succeeded in consolidating a single offering virtually nationwide, with only slight variations or external alternatives in the Federal Capital, Tierra del Fuego and Río Negro. It will thus be much easier to work out what percentage of voters have chosen to support Macri in six weeks’ time.
As the last quarter of 2015 began, with the campaign still in progress, the favoured pro-market economists — such as former Finance minister Alfonso Prat-Gay and the current Treasury Minister Nicolás Dujovne succeeding him in the economic hot seat — argued that a rapid settlement with the so-called “vulture” funds, the devaluation necessary to free currency controls and other re-adjustments such as taking on debt at lower interest rates and printing less money would generating an immediate confidence shock, which —after some brief turbulence in the summer of 2016 — would lead Argentina toward vigorous growth with consequent arrival of investment from overseas.
Little enough of the latter has been registered beyond the promises given to Macri on his successful trips around the world. The absence of growth has now been established for 2016 (indeed a recession of 2.3 percent was recorded) while the first half of this year has shown an extremely tenuous recovery.
Other macro-economic indicators such as, for example, employment, poverty and the debt-to-GDP ratio have considerably worsened in the last two years. The government — its spokesmen explain — is setting the basis for solid growth over the next 20 years, thus banishing forever the stop-go growth characterising the second term of CFK. We’ll just have to see.
The combination of an inflation rate which only now is returning to 2015 levels, higher unemployment and moderate cutbacks in social plans and pensions have evidently made themselves felt in lower-income neighbourhoods, especially in Greater Buenos Aires, where around seven of the 26 millions Argentines who will be voting reside.
All those making the rounds of districts like La Matanza, Lanús, Merlo or Lomas de Zamora, which have also suffered a steep slump in the informal economy which kept their neighbourhoods going, cite a deep discouragement (“a sadness” in the eyes of political consultant Eduardo Fidanza) and a nostalgia for times during Kirchnerite governments. There what the Argentine state has historically handed out to underprivileged neighbourhoods — namely, repression and police brutality — is making a comeback.
The impact of “re-ordering” the economy has been somewhat less for urban middle and upper-middle classes, the mainstay of the Let’s Change vote in 2015, although it is far from being innocuous. The higher utility bills, the collective bargaining agreements failing to keep up with inflation and the threat to jobs will play their role. Yet the support for Let’s Change remains solid in cities like Buenos Aires or Córdoba — something which requires an explanation.
According to Riorda, Macri is “by far the most accepted” among the wave of post-populist presidents, even if his disapproval rating is bigger than his approval. “The old (populism and the left) was punished by the electorate, although it has some chances to revive, and what is new is not fully backed but still has a considerable base in Argentina,” says the consultant.
“Let’s Change has unconditional supporters in the country that exceed one-third of voters,” he summarises.
Looking at other countries, Riorda assesses that in Mexico, citizens “distrust everything, but their angry does not explode in an aggregate vote. Mexico is a pressure cooker, as in Brazil, prevails the rejection of everything, the rage and the anger. A pure disaffection towards any political proposal.”
“In Argentina, the vote is guilty or speculative,” he argues. “Anyone who votes for the past (Kirchnerism) has some fear of fully defending what happened; everyone who votes for the new (Let’s Change) has some disenchantment to defend the government. Thus, there will be no huge winners or losers in the midterm elections.”
Electoral motivations
Riorda points out the electoral motivations: “About 60 percent of the vote to Let’s Change is there because it wants to block CFK, and much of the vote for Civic Unity is for Let’s Change not to go forward with the reforms.”
“The guilty vote will be the most obvious way to see the ‘second-best option’ concept in action.”
Another factor that raises questions is that PRO’s most popular figures — Buenos Aires Governor María Eugenia Vidal and Buenos Aires City Mayor Horacio Rodríguez Larreta — will not directly participate. In BA province Esteban Bullrich, a minister not known for his popularity, heads the Let’s Change ticket, while the list includes many unknown political experiments like Gladys González and media leaders without significant presence in neighbourhoods like Graciela Ocaña.
Will Let’s Change (basically, Vidal and Macri) be able to pass on their popularity to Bullrich and Ocaña? In that regard, considering the ruling party starts the race with rather discreet expectations (about 35 percent of the vote), if Bullrich didn’t mesh with voters, the electoral night could leave a taste more than bitter. Once again, the spectre of a smiling CFK addressing her voters on August 13 has appeared in the government’s nightmares.
“The Let’s Change headquarters is convinced that the political brand speaks for itself. When you ask for the candidates accompanying the name ‘Cambiemos,’ it works well, but it is still an enigma. It worked in the City, but the province is a territory where personality plays a bigger role,” Burdman said.
Let’s Change won the election emphasising the need to recover institutional strength. During the campaign, Macri denounced CFK’s “attacks” on the courts, the proven scandals of corruption and the tense political environment. Regarding those “republican values”, progress has been rather collateral, as there there have been serious setbacks in several sensitive areas.
Boxing slang says that whoever hits first hits twice. In his first three months in office, Macri attempted to appoint justices to the Supreme Court by an executive decree (for the first time since democracy was recovered in 1983); an ally arrested Jujuy’s Túpac Amaru leader Milagro Sala (a case that placed the country in the dock of international courts and NGOs; replaced the Media Law through an emergency decree, paying favours to Clarín and redesigning the telecommunications market a piacere; restored the murky secretiveness to the finances of the Intelligence agency and did everything at hand to remove Attorney General Alejandra Gils Carbó from her post, reinforcing the strategy every time a prosecutor filed an accusation against officials.
Beyond some specific, healthy reforms the Pink House noted that confronting Kirchnerism represented a good bargain, leaving behind the mantra of “dialogue and consensus.” Instead, Macri established an intelligent negotiation with non-Kirchnerite Peronism — with the governors above all — and social organisations, which gave him more room to take decisions.
On corruption, while details about crony capitalism around public works under Kirchnerism, with scandalous contracts and a vice-president, ministers, secretaries and sinister figures who didn’t dare to give an explanation ( Julio de Vido, José López, Amado Boudou, Ricardo Jaime), Macri’s business experience came to spoil the party.
If anyone believed that Macri, born and raised in a crony capitalistic family, embodied the regeneration of Argentine ethics, they should now be shocked by the ghost companies in Panama, the huge fraud in the residual private company Correo Argentino and the ties of Macri’s aides with the Brazilian companies that allegedly bribed Kirchnerite officials.
For Burdman, the likely disappointment will have no great effect on the voting decision.
“The institutional agenda never had a great weight with Argentine voters,” the head of the Observatorio Electoral said.
CFK, for her part, has remained silent or evasive as the massive corruption cases linked to her time in office pile up. Some of her supporters — such as the head of the Kirchnerite ticket for the Lower House in BA province, another bad choice made by the former president — attributed the trials against former vice-president Amado Boudou to “a political persecution.”
Riorda puts the spotlight on CFK’s projection: “The past and its main protagonists have had a very strong public condemnation to come back as if nothing had happened.”
@sebalacunza