Unsteady Argentina

Argentina’s enigmatic president-elect will soon take over
the country and its economic crisis – what brand of Peronism will he bring to
the table?

On December 10,
Argentina will inaugurate Alberto Fernandez as President amid a medley of
economic woes: recession, inflation, poverty, foreign debt and currency
devaluation. But how the longtime previously-behind-the-scenes political
operative for the Peronist party plans to tackle the crisis remains a mystery. Fernandez
was vague and elusive about his proposals on the campaign trail. Despite the
president elect’s decisive victory over center-right incumbent Mauricio Macri, there
are more questions than answers about the direction Fernandez will take the South
American giant.

Ben Gedan, director
of the Woodrow Wilson Center’s Argentina Project, explains on Altamar what we
can expect from the incoming administration. Gedan previously served as the
former South America director on the National Security Council at the White
House. (redzer.tv) He was also responsible for Honduras and Argentina policy at the U.S.
State Department and served as an international economist focused on Central
America and the Caribbean at the U.S. Department of the Treasury.

While Alberto
Fernandez has the reputation as a “a pragmatic, moderate individual… that
doesn’t necessarily give us an insight into how he’ll govern, or who will have
the most influence over him in the Casa Rosada,” explained Gedan. “It’s really
remarkable that immediately after an election of this intensity in an economy
of this importance, that it’s such a mystery who they just elected – and
frankly it remains highly unknown.”

One key factor will
be the level of influence of Cristina Fernandez de Kirchner, the controversial
former president who announced the President-elect’s candidacy and retains a
fiercely loyal base of supporters. According to Gedan, many argue that
“[Alberto Fernandez] in fact was only elected on her coattails, and in that sense,
she will dominate, and he will be this sort of vessel for far-left
Peronism.”

On the other one
hand, Fernandez, might rule as an orthodox reformer. “Some people put it in the
Argentine context and say he’s going to surprise you – he’s [former President
Carlos] Menem. He’s going to come in with this neoliberalism by surprise and
actually be the reformer that Macri couldn’t be,” said Gedan.

Even if Fernandez
wanted to boost social welfare spending, Argentina is running out of cash.
Further payouts from the record $57 billion that the International Monetary
Fund loaned to the Macri administration is contingent on austerity measures. “I
think unfortunately in Argentina there’s some false hope when it comes to the
re-negotiations with the IMF… It’s still going to take some time before
Argentina recognizes that the IMF is going to make the demands it normally
makes, and they are going to contradict a lot of the campaign promises that got
Alberto Fernandez elected,” argued Gedan.

An additional test
for Fernandez will be his relationship with the United States: “There is some
argument that if there’s anyone who’s going to get along with a Peronist it’s
Donald Trump. They share a protectionist, nationalist view of the world… I
think the reality is the opposite. A lot of what Argentina got out of the
relationship was the personal tie between Donald Trump and Mauricio Macri… And
that did give Argentina a lot… Ultimately it got readmission to the generalized
system of preferences, it got a U.S. endorsement for the OECD – all of this
probably because of this personal relationship and because Macri’s personal
project of economic liberalization was in the U.S. interest.”

Argentina’s foreign
policy could also invoke the ire of the Trump Administration. For example,
President-elect Fernandez has been reluctant to publicly criticize Nicolas
Maduro or refer to his regime as a dictatorship. “Even if nothing changes but
the Venezuela policy, that could be enough to dynamite the diplomatic
relationship,” argued Gedan.

Meanwhile, even
though China invested billions of dollars in investment into Argentina under
President Macri, the Trump Administration could react differently during a
Fernandez presidency. According to Gedan: “[Fernandez] might be subject to
condemnation from the White House that Mauricio Macri escaped, even if the
policy is identical. And there’s some indications that it won’t be – that in
fact there will be more of a strategic ideological tint to Alberto Fernandez’s
relationship with China. And that of course will be provocative for
Washington.”

Listen to our
analysis of Argentina’s incoming government — available for download here.