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. 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.