Argentina Ushers in Matrimonial Presidency (ARI)

Argentina Ushers in Matrimonial Presidency (ARI)

Theme: Cristina Kirchner’s win has introduced matrimonial presidency to Argentina. This ARI reviews the elections that brought her to power, the legacy of her husband’s government and the challenges she faces in the future.

Summary: Cristina Kirchner is Argentina’s fifth elected President since the country’s return to democracy. She succeeds her husband after winning nearly 45% of the vote –the lowest result in a presidential election since 1983 and the largest margin of victory over the runner up– in elections characterised by a fractured opposition and the absence of debate. With the most uniform, single-faceted support of any President elect since 1983, she began her term in office on 10 December escorted by her husband and a cabinet that for the most part has kept on the same officials from the previous Administration. She conserves the legislative faculties delegated by the Congress and an economic emergency despite having a majority in both chambers of the legislature. This presidency is powerful from an institutional standpoint but the discipline of Peronism is difficult to predict. Her campaign slogan, ‘continuity within change’, reflects the ambiguity with which she is launching her term in office. Kirchner promises changes, but it remains to be seen if she will enact deep reforms to address the problems she inherited.


A Matrimonial Succession
Convinced that progress in the economy and on social issues under Néstor Kirchner were not just the result of a favourable situation in the world economy, a clear majority of Argentines elected Cristina Fernández de Kirchner, the first women to occupy the post through elections, in a country where men have long dominated politics. ‘We don’t come with promises, but with the testimony of what has been achieved’. This title sentence from her closing campaign speech contains the key to understanding how voters picked their candidates in the sixth presidential election since democracy was restored in Argentina in 1983: the record of what happened over the previous five years, rather than aspirations for the future, is what decided things. The economic fiasco and social and institutional crisis of late 2001 was left behind. Argentina today is a country that is growing and undergoing a process of social rebuilding after overcoming the crisis. The economy has posted five straight years of growth at stable and very high rates. Argentina had not seen such robust and prolonged growth rates since before World War I. Granted, there were longer stretches of growth (in the 1930s and 1940s and from 1960 to 1970), but at lower rates that were also more volatile. Paving the way towards Kirchner’s victory were economic growth, a sharp increase in employment, a recovery in lending and wages, a reduction in poverty and indigence, stronger consumption, a rise in the fiscal and external surpluses, as well as the prestige of the Supreme Court.

Cristina Fernández benefited from the electoral capital made possible by her husband’s record and from an opposition that was fragmented and on the defensive. Néstor Kirchner had an approval rating of more than 50%, but contrary to all expectations he chose not to seek re-election and instead to hand-pick his wife to succeed him. He avoided a primary election to pick a successor, with no other explanation being offered than its supposed inconvenience. There was no presidential re-election, but the government was in fact re-elected. Not only is the same party remaining in power, but with an unprecedented slant: succession within the same married couple. Néstor Kirchner has decided to continue in a different way. The undisputed leader of the Peronist movement after defeating his rival Eduardo Duhalde, his aim is to build the political force that will provide support for the officialist line represented by his wife. It seems unlikely that this will transform Peronism into an umbrella movement spanning the centre-left of the political spectrum. The victory had the sociological profile of classical Peronism. This is seen in the party’s disappointing showing in Argentina’s major cities. Former senator Antonio Cafiero, a long-standing leader of Peronism, warned that as a political party ‘Justicialism may come together with other political and social forces in various electoral coalitions, but as a movement it will have to continue expressing a way of thinking and feeling Argentina that is all its own and cannot be transferred. In it, the classic ideological opposition between right and left takes on another meaning and instead is left to go with the flow of events. This characteristic, so often criticised by some intellectuals, is not a sign of weakness or confusion, as they argue, but rather is one of the pillars of its efficiency because it makes idealism compatible with pragmatism or, if you will, blending the “ethics of conviction” with the “ethics of responsibility”’ (Clarín, 6/XII/2007). The trade union leader Luis Barrionuevo said ‘All I hope is that if [Néstor Kirchner] decides to normalise Peronism, that he does not make it plural. Because in Peronism there cannot be K radicals’ (La Nación, 8/XII/2007). Barrionuevo alluded to the sector of the Radical Civic Union (UCR in Spanish) which, as part of so-called pluralist ‘concertation’, allied itself with the Kirchner camp. Julio Cobos, former UCR governor of Mendoza, was the running mate of Cristina Kirchner. Despite this, in Mendoza Kirchner promoted a ticket whose victory stripped Vice-president Cobos of his territorial power base. Without the support of the middle class and with open resistance from political and trade union leaders, the now-thwarted goal of transforming Peronism into a new political force, challenging Peron’s own strategy of bringing smaller partners into the Peronist camp, seems very hard to achieve.

Sociological Profile of Voters who Backed Cristina Kirchner
In this election, middle class voters in big cities could find no unified political force capable of becoming an alternative to the officialists, with parties fragmented and traces of radicalism and Peronism spread throughout the country, a strong emphasis on individual personalities and political identities in a state of crisis. Demands for transparency and closer control of government action were dispersed across the opposition spectrum. Cristina Kirchner won with just under 45% of the votes, the poorest showing since the elections of 1983 –except for the irregular elections of 2003–, but she scored the largest-ever margin of victory over the runner-up, this time led by Elisa Carrió. Kirchner lost in Argentina’s three largest cities, Buenos Aires, Rosario and Córdoba. Her electoral strength drew on the Peronist vote, the backing of people living far from major urban areas. Kirchner garnered the most uniform, single-faceted kind of support of any President elect since 1983. It was a far cry from expectations of a coalition with progressive elements of the middle class. Unlike former President Carlos Menem, who managed to bring together a major assortment of middle class sectors in the 1990s, Kirchner failed to win major support in this part of the electorate.

An Institutionally Powerful President
Since democracy returned to Argentina in 1983, no President has taken over with such a strong share of institutional power as Cristina Kirchner. She has an ample majority in both houses of Congress, close to a two-thirds majority that will give her absolute legislative control. Small districts are disproportionately represented in Congress, and this explains the distribution of power in the legislature. Kirchner has the advantage of facing a weak and fragmented opposition, so she should get off to an obstacle-free start in congress. But the discipline of Kirchner-style Peronism is hard to predict. The tradition of the movement founded by Peron has been to transfer party infighting to the organs of government, with the result that Peronism was the government and the opposition at the same time. Perhaps fears of repeating this led to maintaining the legislative faculties that the lawmakers had granted to the executive branch, the so-called superpowers.

Thanks to a modification of the law on government spending, the President can amend the budget. This frees the executive branch from any interference by Congress in budgetary matters. It is a powerful tool with which the new President Kirchner can make decisions without meddling from other relevant players. Congress has also delegated to her something which the Constitution says it cannot yield: authority over taxes. This was not the case with the extension of the economic emergency law, a key instrument in renegotiating contracts with privatised utility companies. This was approved in the Chamber of Deputies, but not in the Senate in time for Kirchner to take power. This might be a case of revenge: when she was a lawmaker, Cristina Kirchner opposed the economic emergency law in early 2002, during the Duhalde presidency as the crisis was worsening. Then she abstained from voting on successive extensions, even during her husband’s term in power. Before Mrs Kirchner took over, the Senate also failed to extend a law imposing taxes on financial transfers and cigarettes. These taxes are not shared by the central government and regional or local administrations and thus fatten the fiscal surplus. The latter is driven largely by domestic consumption, but also by a rise in withholding taxes on exports.

Although Mr Kirchner promised a ‘a culture of dialogue’ when he took power, in the end he ignored opposition parties and surrounded himself with a tight circle of trusted aides. He did not coordinate with his broader staff or with his own party –the Front for Victory– which in fact was a makeshift entity created for him to run for office. Cristina Kirchner ran as candidate of a coalition centred around this party, created by Eduardo Duhalde and Néstor Kirchner in order to compete in the 2003 elections. Néstor Kirchner tightened his grip on the political system with special budgetary powers, decrees passed with silent or tacit approval from Congress (in Argentina this is known as a sanción ficta), individual control over handling of the economy, and a modification of the Judicial Council in a way that blurs the division between the executive and judicial branches. But these measures cost him early support from middle-class people in large cities and left a lot of voters without a reference point. Elections to renew part of the Chamber of Deputies in 2005 and the presidential and legislative elections of 2007 confirmed this. The triumph of the centre-right candidate Mauricio Macri in the city of Buenos Aires was a clear reflection of how Peronism lost influence over part of the electorate in the Argentine capital. Large numbers of opposition voters were like political orphans, but other parties failed to forge a common front that would bring those voters together. In the presidential election almost 90% of the votes were shared out between three coalitions: the ruling one, that of Elisa Carrió and one led by Roberto Lavagna. They were heterogeneous both in terms of ideas and the groups represented. Convergence will be elusive when tough issues must be decided within the government or the opposition.

Twenty-four years after the restoration of democracy, which has been the longest such period in Argentina –followed by one in which the Radicalism ruled (1916-1930) and then Peronism (1946-1955)– there are problems with the new President’s promise to improve the workings of Argentina’s institutions and encourage dialogue, tolerance and harmony among its people. The problem is that these pledges are not easily reconciled with the continued existence of super powers in the hands of the Executive branch, defence of the INDEC statistics and census agency’s manipulation of inflation figures and the Senate’s failure to enact a bill granting access to government-held data. How does one meet the expectations of political modernisation that mobilises the middle class while at the same time maintaining control over the Peronist movement, a necessary condition for exercising power? The presidential couple has yet to resolve this dilemma. Perhaps the new President’s strategy of alliances will provide some innovation compared with her predecessor but this remains to be seen.

Continuity Within Change
Cristina Kirchner has retained most of the ministers that served under her husband. ‘Continuity within change’ is the slogan that reflects the ambiguity with which she begins her term in office. Does the government change to remain faithful to itself, or is it still determined to change? Perhaps, as some suspect, this is the start of a period of consecutive successions by the presidential couple that will keep them in power. This ‘matrimonial presidency’ combines the risks of presidential government and those associated with a couple –emotional, patrimonial, a common past and future–. ‘For me and for all Argentines, (Néstor Kirchner) will continue to be President’, Cristina Fernández said at the swearing-in ceremony of governor Mario Das Neves in the province of Chubut, before she took power. However, her choice of a new Finance Minister, Martín Lousteau, has been perceived as a change: both the ruling party and the opposition are waiting to see what he does, and have noted his strong record. It remains to be seen how much continuity and how much change there will be in the government’s actions. Expectations of continued high prices for agricultural goods and a strong pace of growth –a wonderful tool for consolidating political leadership– puts the government in a strong position. However, the new President has to face a difficult legacy marked by inflation, an energy supply system at the limit, accusations of corruption against government officials –even confirmed members of the new cabinet– and crime.

Some of the achievements of the first Kirchner Administration –growth in consumption, investment, employment, the wage bill, an increase in tax revenue and Central Bank reserves– were made possible by running up major macroeconomic imbalances that, given their size, led to higher inflation. Through subsidies that eat away at public savings, the government managed to weather price distortions in the regulated markets and keep inflation from hampering consumption. Still, as Ramiro Castiñeira states, the practice of using subsidies to cover up inflation so it does not hit the consumer’s wallet has limits: the depth of government coffers and the saturated energy grid. Other tools the ex-President used to try to control inflation –now estimated by some economists as approaching or surpassing double digits– were sectoral price accords, limits on exports of consumer goods and investment incentives. One argument the government uses to justify state intervention in the export sector is that producers do not end up losing money, but rather they simply stop earning ‘a lot’. This argument skirts the consequence of the policy: the tendency to concentrate activity in the hands of large companies, to the detriment of small and medium-size producers whose costs and productivity levels are lower. State intervention saps incentives to raise production for the domestic market and for the overseas market, which is so hungry for foodstuffs. The policy of investment incentives is another task for defining the country’s profile over the short and medium term and dumping erratic short-term policies for containing inflation and increasing the fiscal surplus. What is the long-term strategy? No one knows yet. The model known as ‘accumulation with social integration’ which the new President advocates requires policies of medium and long reach. How can one govern without credible, official statistics? Restoring the credibility of INDEC is another challenge she faces.

The Challenges Facing the New Presidency
Dealing with trade unions will be one of the early challenges of the new Kirchner Administration when it comes to controlling inflation. Her appeal for a social accord designed to assure growth, curb inflation, increase investment and improve the distribution of wealth goes back to an old dilemma in times of soaring inflation in Argentina: the trade unions vehemently defend nominal wage levels in the present at the risk of losing out on real wage increases in the future. Today the CGT labour federation is run by the leader of the lorry drivers’ union, Hugo Moyano, and his leadership is being questioned by representatives of other sectors. It is not clear that the groups which are key to the success of tripartite social pacts are representative and stable. Three-way social agreements (state-business-trade unions), such as the one proposed by the President, have a track record of failure. Some signs hinting at another failure come from the trade union sector. A representative of the restaurant workers union, Luis Barrionuevo, is a good example of this school of opinion. He has called the President’s appeal for a social accord ‘an expression of wishes’ and said ‘I don’t believe in those agreements. The pacts are reached between the business sector and the government, and they are sent pre-cooked to the workers’. It will not be easy for the government to overcome this resistance. However, it is not fair to predict a certain failure in the immediate future, either.

As she starts her term in office, Cristina Kirchner, faces the prospect of a sort of dual team leadership, with her husband running the Justicialist Party, which is currently leaderless, and herself as head of the executive branch. This would give the Administration the advantage of an experienced hand to resolve conflicts within the Peronist party. At the time of the writing of this article, former President Kirchner had not yet taken control of the Justicialist Party. The chief of staff, Alberto Fernández, said the new President Kirchner is confronted with a ‘very big task’ over the next years in ‘bringing order to such a disparate entity’ as the Justicialist Party.

Kirchner is looking at a panorama which jeopardises sustained economic growth: inflation figures that are not very credible, an energy deficit, insufficient investment in capital goods and infrastructure; a rise in government spending and state subsidies; a shortage of long-term financing, both external and internal; an increase in public debt and drop in the real exchange rate, and in the fiscal surplus and trade balance, which have come to depend on high international prices for exports and overseas financial markets. Over the long term Argentina needs more than growth in exports. Its overall economic growth is vulnerable because the country is dependent on the international context and on just a few products, above all primary export goods, and because it invests little in science and technology.

The new President will have to address the task of undertaking a structural reform that paves the way for sustained growth, an increase in investment and an improved business climate. It will also be necessary to instil greater transparency and efficiency in government decision-making, limiting discretional use of power in order to restore people’s trust in government institutions. In this term, what’s in store is a battle between modernisation and the status quo, rather than one between the centre-left and the centre-right, which reflects the vertical fracture in Argentine society, divided between those up above and those down below. Reforms have been put off with the argument that current circumstances required urgent measures. One sees this in a comment by former President Kirchner when he took office: he said the goal of his government was to get Argentina out of hell and into purgatory, not heaven. It remains to be seen if the new government will bring about the deep, structural changes that Argentina needs to adapt to the demands of the new world situation.

As the new President takes power, she inherits a conflict with Uruguay over the construction of paper mills on the banks of the River Uruguay. During her term in office, diplomacy is expected to replace the direct pressure exerted by protesters in Gualeguaychú, and dialogue is expected to ease tensions. In her swearing-in speech, the President elect said this was her intention and stressed the friendly ties that join Argentina and Uruguay despite this particular conflict. As a senator and wife of the President, Cristina Kirchner gave hints that international relations were high on her agenda, although she has not said what policies her government would pursue.

A Weak Opposition
The opposition is disconcerted and divided, and this does help fuel debate on ideas to usher in change. The former Finance Minister Roberto Lavagna, the candidate of a coalition between a non-Kirchner branch of Peronism and the Radical Civic Union, took 17% of the votes and came in third. He missed his opportunity. Today a sector of the decimated UCR is trying to form an alliance with Carrió’s Civic Coalition. Carrió managed to appropriate the role of efficient and fierce opponent of the Kirchners, but in the end could not contain conflicts within her heterogeneous coalition and is suffering for it. The remains of non-Kirchner Peronism are trying to adapt to the new political map created by the elections. The opposition faces two big problems. On the one hand is an inability to grow outside major cities. This is in inherent in an electoral system that favours small provinces where Peronism dominates. Secondly, there is the difficulty of reconciling political competition with the idea of converging into a common front. This stems from the existence of strong personalities that see such agreements as nothing more than threats. These limitations delay a much-needed overhaul of the political system in order to give a unified voice to demands from a society transformed by the changes that have occurred since Argentina returned to democracy.

The absence of solid party organisations, Peronism that is dominant but divided and a crisis of alternative leadership do not help much to bring about overdue fundamental change. Perhaps the new President, who has been consistent in her stated intention of engaging in dialogue, will open a new chapter in relations with the opposition, one in which before trying to devour it, she might consider the need for strengthening it. This is a possibility we must not rule out.

Conclusions: Cristina Kirchner inherited her husband’s political capital but must build up her own as she heads toward congressional elections in 2009. Her government is getting a big boost from expectations of continued strong prices for agricultural products and robust economic growth. However, the President must face a difficult legacy marked by inflation, an overworked energy sector and suspicions of corruption. Reforms that would lay the groundwork for sustained economic growth and encourage transparency and efficiency in decision-making while limiting the discretional use of power were postponed in the interest of surviving an economic crisis. Cristina Kirchner must confront these challenges in order to fulfil her promises of change. More than a battle between the centre-left and centre-right –one that reflects the vertical fracture in Argentine society– what is in store during the next Administration is a battle between modernisation and the status quo. The absence of solid party organisations, Peronism that is dominant but divided and a crisis of alternative leadership do not help much to bring about overdue, fundamental change.

Liliana De Riz