A NEW ARGENTINA IS BEING BORN. BUT AT WHAT COST?
What does the future hold for Argentina?
“I would like the elected President to remember three things: first, I am not your escort. Second, the presidential inauguration is not your birthday party and, third, I will not continue to tolerate in silence, the public mistreatment that you have been showing towards me in the last days”. With this post on Facebook, the former Argentinian president, Cristina Kirchner shared her disagreement over the location of the presidential inauguration ceremony last December. Kirchner wanted it to be in the National Congress, where her supporters hold the majority. To avoid being booed in his first day in office, Macri wanted the ceremony to be held at the “Casa Rosada”, the seat of the Executive Government. Ms. Kirchner’s decision not to show up in the inauguration day appeared as a metaphor for the troubling days that the new government will likely face.
In less than 100 days in power, Mauricio Macri is committed to the motto of the party he runs. Ahead of “Cambiemos” (“Lets Change”), the newly elected president has issued decrees and made changes that are reshaping the Argentinian economic and political life. In his first 72 hours in office, Macri issued 29 decrees during the Parliamentary recess, altering many regulations of Ms. Kirchner´s government and causing dissatisfaction among the congressmen. In many of his statements, he indicated that Argentina should continue to move away from its currently “Bolivarian” foreign policy (which considered Iran, Venezuela and Russia as close friends), and would foster economic ties with the United States and Brazil, trade partners that have lost space in the Argentinian agenda during the last decade.
Without representatives in the World Economic Forum in Davos for the last twelve years, Macri attended the event to send a clear message to the world that Argentina will not remain the same any longer. He ranked as a priority, the resolution of the $9 billion USD debt that the country has with international creditors, seeking to regain access to credit in international financial markets. Negotiations were stalled since the US Department of Justice’s decision that favored creditors over the Argentinian Government, in 2014. In Davos, Macri spoke with Joe Biden to arrange a meeting with President Obama soon.
With many countries in Latin America currently struggling with the fall of commodity and oil prices, priorities are being reshaped, and Macri´s Argentina is ready to be at the vanguard of these changes. In his first months in power, the president has unified the many existing exchange rates of the peso, devaluing it by more than 30% in a single day. He announced cuts to energy and gas subsidies, even at the cost of higher inflation rates. His background as businessman and president of the popular soccer team Boca Juniors (1995-2003) has also given him a singular view as a public administrator: ahead of most of its key ministries (Economy, Foreign Relations, Energy) Macri empowered former executives or CEOs of multinational companies, firing staff and reorganizing the public administration.
In his drive to conduct a radical change for the country, Macri can expect obstacles ahead. The pool results last year showed a divided electorate between the still influential Kirchnerism (which got 48.6% of the votes), and the sense of change brought by Macri (winning by a razor thin margin of only 51.4%). Latin America experienced an economic bonanza in the 2000s, largely helped by strong Chinese growth and high commodity prices. Despite losing strength, left-wing populist parties remain with a great influence among popular movements, which are the main critics of the Macri administration so far. Kirchnerist leaders still hold great power in political institutions and social movements, which could undermine Macri initiatives, especially when the country starts dealing with higher unemployment and inflation rates in the coming months. With its largest trading partner (Brazil) in crisis, and with the reversal of the former government´s policies, Argentina will face a difficult year. According to the IMF, the country´s GDP will decrease by 0.7% in 2016.
Macri rules under the shadow of the myth that non-Peronist governments do not reach the end of their mandates. At the beginning of the last decade, the country had five presidents in less than two weeks, and the population is used to taking off the power of presidents who do not answer popular demands. Whether this unspoken rule will be proven to be right or wrong, only time can tell. Until then, Macri should reconsider the speed and ambition of the changes he wants to implement in Argentina, if he is willing to remain in power for the foreseeable future.