By Ronald J. Morgan
In what could be the economic policy showdown of the decade, Argentines will be either green lighting a radical neoliberal policy by President Mauricio Macri or signalling a need to put a break on pro business and government austerity reforms when they vote in congressional elections Oct. 22. 1,2,3,3a,3b,4
Former President Cristina Kirchner (2007-2015), who is facing investigations for corruption during the past administration, is nevertheless, leading the Left campaign against Macrism. While the Kirchner campaigning has been formidable, the Macri forces are showing a growing strength. Argentines gave the Macri Cambiemos (Let’s Change) Party a strong show of support in the Aug. 13 primary elections. Cambiemos won in Kirchner strongholds such as Santa Cruz, Cordoba and Salta. Anti-Kirchenr Chamber of Deputies candidates Elisa Carrio and Margarita Stolbizer, won large victories.
In the media-watched Buenos Aires province senatorial race, however, Kirchner defeated Esteban Bullrich, the former head of government for Buenos Aires City under Macri, by a razor thin margin. But the close victory could not offset the overall Cambiemos win. The Cambiemos gains caused euphoria in the stock market and international business sectors.
“We’re are two weeks away from ratifying that we are convinced of the path that we have chosen,” The Argentine Daily Clarin reported Macri as saying to a gathering in Puerto Iguazu. “We decided that we want to live with the truth, that we don’t want more lies, that we don’t want more mafias, narcos, nor corruption. That time has ended.”
Macri had a second good turn of luck when better than expected economic news showed the economy pulling out of recession. Inflation also is headed downward after peaking at 40% last year. The Argentine Central Bank predicts 22.8% inflation at the end of the year. The official statistics agency INDEC predicts year-end growth for 2017 of 2.7%. Economic recovery in Brazil will also help stimulate Argentine economic activity. 5,6,7,7a,8
Whether the pain of the recent severe downturn is behind most Argentines is doubted however. Since Macri took over in January 2016, what’s being termed the “Adjustment” has filled the streets with homeless and returned Argentines to the streets in protest in a way not seen since the 1990s. Government and private sector firings, accompanied by radical price hikes, which caused a loss of consumer purchasing power, have been endured since Macri took office. 8a
Poverty conditions improved slightly in the first half of 2017. Official INDEC statistics showed a 1.7% drop in poverty from last year to 28.6%. Currently, 7.84 million Argentines are below the poverty line. Some 1.7 million Argentines are classified as indigent.
See: Argentina’s Neoliberalism: Firings, Price Hikes, Austerity
Macri and his economic team are showing a conservative zeal on the eve of the elections. He has announced plans for passage of a package of radical neoliberal reforms as soon as Cambiemos posts an expected strong win Oct. 22. Tax cuts, labor reforms, and further cuts to federal and state bureaucracies are ready for passage. More price hikes are also planned to reduce government subsidies. 9,10,11,11a
The Argentine labor confederation CGT (Confederación General del Trabajo de la República Argentina) has been meeting with pro union Peronist congress members and senators to form a strategy to block Macri anti-labor reforms.
In addition to the scary prospect of more onerous price hikes and government job cuts there have been some weaknesses in the Macri turnaround. The government has been criticized for heavy borrowing from foreign lenders. After 15 years without access to the international bond market Argentina borrowed $16.5 billion in 2016. Then in 2017 it issued an unusual 100 year bond for $2.75 billion. A large trade deficit still looms and capital flight has been brisk. The Argentine peso also is still devaluing in an erratic manner. Multilateral borrowing has also increased. Total foreign debt now stands at $204.5 billion. Moodys credit rating agency criticized the foreign borrowing in October and said it was “credit negative”. 12,13,14,14a
The borrowing was channeled into infrastructure projects which are being used to stimulate the Argentine economy. Public works construction is evident throughout Argentina. The government plans to under take 59 major infrastructure projects worth $26 billion over the next three years. 15,16
Kirchner entered the senate race with the hope of forming a strong opposition in congress. If she wins, Kirchner would receive protection from arrest in various legal proceedings. The former president formed a new movement — Citizen Unity (Unidad Ciudadana) — and hit the campaign trail with a list of Macri failings and a plea to save the nation from a far right shift. “They are preparing a great adjustment after the elections. The question is whether society is willing to give a blank check to this government,” she said recently. Barring legal complications, Kirchner could run for president again in 2019.
The October 22 vote, will elect 127 out of 257 members in the Chamber of Deputies and 24 members of the 72 member Senate. Two elections for governor will also occur this year. Cambiemos won the Corrientes province race and an election for the governor of Santiago del Estero province is still ahead. 17,18
As in previous elections a number of legal proceedings, and political crimes are influencing the election environment. Argentines are watching how the Macri government handles the investigation into the Aug. 1 disappearance of a 28-year-old Argentine backpacker, Santiago Maldonado. Santiago disappeared in Patagonia when members of a Argentine Gendameria police unit attacked and attempted to dislodge a Mapuche encampment that was conducting a protest on land owned by the Benneton Coporation. 19
Another sensitive case being looked at closely by Argentines and the international human rights community is that of pro-Kirchner social activist in Northern Argentina Jujuy province, Milagro Sala. Sala, 53, headed the Tupac Amaru neighborhood association and was the recipient of government funds to build a low-cost housing project for poor and indigenous persons. She also served as a state deputy. Shortly after Marci took office Sala was arrested during a protest against Governor Gerardo Morales. She since has been charged with misusing $2 million in public funds and disturbing the peace. Activists have charged that Sala is the victim of a vendetta by the governor and is the first to fall to a trend to criminalize protest. 20
Last September, the Argentina forensics group of the Gendarmeria police issued a report declaring the Alberto Nisman death in January 2015, a homicide and not a suicide. Nisman was the prosecutor in the AMIA Jewish center bombing case. The new turn further heightens concerns about the possibility of a political plot to kill Nisman. 21
In addition to the Nisman case, corruption proceedings are moving ahead against Cristina Kirchner and a number of associates. Fernandez has become a subject of investigation in three corruption cases involving bribes. 22,23
Fernandez is also being investigated for covering up Iran’s role in the AMIA Jewish center attack of the 1990s. Nisman originally proposed the investigation four days before his mysterious death.
SOURCES:
1, CFK, de campaña en Lanús https://www.pagina12.com.ar/66778-cfk-de-campana-en-lanus
2. Cristina Kirchner’s Interview with Infobae, Explained http://www.thebubble.com/cristina-kirchners-interview-infobae
3. La entrevista completa a Cristina Kirchner en Infobae http://www.infobae.com/politica/2017/09/14/en-vivo-entrevista-a-cristina-fernandez-de-kirchner-en-infobae/
3a. Cristina Kirchner ganó las primarias en Buenos Aires por 20.000 votos https://elpais.com/internacional/2017/08/30/argentina/1504052963_172150.html
3b. Macri domina las primarias pero Kirchner empata en Buenos Aires
https://elpais.com/internacional/2017/08/13/argentina/1502630221_677668.html
4. Entrevista con el Pte. de Argentina, Mauricio Macri” Oppenheimer Presenta # 1728
5. Macri, sobre la baja de la pobreza: “Es una muy buena noticia, pero esto recién comienza” https://www.clarin.com/politica/macri-baja-pobreza-buena-noticia-recien-comienza_0_H1umkg3jb.htm
http://www.thebubble.com/indec-poverty-rate-dropped-to-28-6-percent-in-the-first-semester-of-2017/
7. Analistas mantienen proyección de inflación en 22% http://www.cesla.com/detalle-noticias-de-argentina.php?Id=31425
7a. El FMI sube la previsión de crecimiento de Argentina a 2,5 % en 2017 y 2018 https://www.clarin.com/economia/economia/fmi-sube-previsiones-crecimiento-argentina-2017-2018_0_SJrJ1D53-.html
8. El Gobierno desa elecciones sean hoy http://www.lanacion.com.ar/2066773-el-gobierno-desea-que-las-elecciones-sean-hoy
8a. Unidad Ciudadana Spot Lorena Pokoik #AsíNoVamosBien https://www.youtube.com/watch?v=SYa4UvnSMuw&feature=youtu.be
9. Macri Readies Tax, Fiscal Bills for Post-Election Drive https://www.bloomberg.com/news/articles/2017-09-19/macri-is-said-to-ready-tax-fiscal-bills-in-post-election-drive?utm_content=economics&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-economics
10. La redistribución macrista del ingreso https://www.pagina12.com.ar/67968-la-redistribucion-macrista-del-ingreso
11, Los 5 puntos del proyecto de Ley de Responsabilidad Fiscal que será enviado al Congresohttp://www.infobae.com/economia/2017/08/18/los-5-puntos-del-proyecto-de-ley-de-responsabilidad-fiscal-que-sera-enviado-al-congreso/
11a La Agenda del Gobierno en El Congreso http://www.infobae.com/politica/2017/09/25/la-agenda-del-gobierno-en-el-congreso-el-paquete-de-leyes-que-buscara-aprobar-despues-de-las-elecciones/
12. ARGENTINA: Unhedged Foreign Borrowing Raises Risks For Sub-sovereigns – Moody’shttp://markets.businessinsider.com/news/interestrates/ARGENTINA-Unhedged-Foreign-Borrowing-Raises-Risks-For-Sub-sovereigns-Moody-s-1003032622
13. Argentina returns to global debt markets after 15-years https://www.reuters.com/article/us-argentina-bonds-bids/argentina-returns-to-global-debt-markets-after-15-years-idUSKCN0XG2W0
14. Argentina sold $2.75 billion worth of 100-year junk bonds http://www.businessinsider.com/argentina-sold-275-billion-worth-of-100-year-junk-bonds-2017-6
14a. Crece la cantidad de plata de argentinos en el exterior https://www.clarin.com/economia/economia/crece-cantidad-plata-argentinos-exterior_0_HJefzM6jb.html
15. Argentina’s Macri bets on bus lane, public works ahead of key election http://www.reuters.com/article/us-argentina-politics/argentinas-macri-bets-on-bus-lane-public-works-ahead-of-key-election-idUSKBN17S2ZT
16. Argentina prevé inversiones público-privadas por US$26.000M http://www.cesla.com/detalle-noticias-de-argentina.php?Id=31457
17. Corrientes elige gobernador: Cambiemos se impone y evita el ballottage
19. Santiago Maldonado: missing backpacker takes center stage in Argentina’s elections https://www.theguardian.com/world/2017/oct/06/santiago-maldonado-argentina-election-missing-backpacker?CMP=share_btn_tw
20. Argentina’s Milagro Sala: Criminal, or “Political Prisoner”?http://americasquarterly.org/content/argentinas-milagro-sala-criminal-or-political-prisoner?
Roads to Resistance 