Fiscal and Political Change for Argentina?

So who’s going to try to deal with that — and the future of a leftist political movement begun before Evita Peron approached her famous balcony? PresidentCristina Fernández de Kirchner, who is term-limited out, and her late husband, Nestor, ran the country for a dozen years. Now, their political heir is Daniel Scioli of the Victory Front Party, a former powerboat racer and governor of Buenos Aires province, where a third of Argentine voters live. So far, he’s in the lead, though skeptics worry he’ll be a Kirchnerist puppet. Then there’s Scioli’s main rival, Mauricio Macri, the center-right businessman who is now mayor of Buenos Aires. He wants to jump-start the economy with a capitalist right turn, loosening the state’s regulation of the economy and its currency controls.

According to Maria Victoria Murillo, an Argentine political scientist and professor at the School of International and Public Affairs at Columbia University, the country may not be ready for a host of fiscal changes, even if they are badly needed. Here is an edited version of our conversation with her.

OZY: What are the biggest challenges facing Argentina today?

Maria Victoria Murillo: There are major economic concerns. The economy is more fragile than it should be, given the decline in poverty in Argentina. And the whole region is suffering from a commodity crisis. Brazil is Argentina’s main trading partner, and its economic decline has negatively affected Argentina. Also, the politicization of the judiciary is a problem. Compare Argentina to Mexico on this measure, and Argentina looks OK. But the degree of politicization of the judiciary over the last year has been very dramatic.

OZY: How concerned are Argentines about these problems?

M.V.M: Interestingly, people in Argentina do not perceive things as being so bad. Most say fiscal adjustments can be avoided. The policies haven’t hurt the population in a way that makes them want to kick the incumbent out. The public mood is one that favors the incumbent. And I wouldn’t expect to see protests, because this election might bring change; protests happen when elections don’t bring change.

OZY: Speaking of the incumbent, what role might Kirchner play after she leaves office?

M.V.M: She hasn’t run for any other position yet, so it is hard to say. In fact, she can’t until December 11, after the new president is inaugurated. To keep control of the country, she has to be a political possibility until then. But she may retire. We just don’t know yet.

OZY: What is going on within the Peronist party?

M.V.M: There is a division within. The unemployed have been the core ofKirchnerismo, and most of them have already aligned with Scioli. But there is a sector within that is a more traditional group (anti-Kirchner Peronists), and they are facing a division with those who want to stay with Kirchner and Kirchnerismo.

OZY: What are the opposition’s chances?

M.V.M: Even if Macri wins, it’s going to be hard for him, because he has only one district (Buenos Aires) on his side. A majority of governors would not be with him. It would be hard for the government of a non-Peronist to build support.

OZY: So who do you think will win?

M.V.M: Scioli in the first round. In the case of a runoff, the second round will be more polarized, but I still think he will defeat Macri. I think the voters will perceive that with Macri there will be more economic adjustments, and in the past, the voters of Argentina have tried to avoid dramatic political change. But that is if nothing extraordinary happens first. And in Argentina, you can never be sure.

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