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CLAI Commentary
A
series of occasional commentaries on important
policy issues affecting Latin America and the Caribbean.
May 30, 2003
Will Kirchner Lead Argentina to an Era of Growth?
By
Dr. James Ferrer, Jr. and Eduardo
Segatore1
Whether merely to save face or to
destabilize the new government, Carlos Menems withdrawal
from the second round of the presidential elections catapulted Nestor
Kirchner into the Argentine presidency. With poverty and crime
at record highs, the Kirchner Administration faces the truly daunting
task of returning Argentina to the path of economic and social stability. Many
observers have asserted that, because Kirchner received only 22 percent
of the vote in the first round of the election, this task will be
especially difficult. However, recent polls show that Kirchner
enjoys the support of a large majority of the population. Therefore,
if he has the political skill to garner the support of the menemistas (especially
the ones who are disillusioned with Menem because
of his withdrawal), of the increasingly popular Lopez Murphy, and
of the remnants of the Radical Party, he could enter history as the
President that finally cured Argentina.
The presidential elections, despite Menems final
maneuver, were actually quite successful. There were no protests or riots
as had been feared, especially after the manipulated provincial elections of Catamarca earlier
this year. Furthermore, although Menems team
complained about first round irregularities in some districts of Buenos Aires province (Duhaldes territory), these complaints were never
formalized and the elections are considered to have been transparent. A
much more important factor was the attitude of the voters. The results
of the first round indicate that voters acted rationally and that the political
environment of Argentina has moderated significantly over the past year. Elisa Carriσ and
Rodriguez Saα, the two most radical of the five candidates who
had a chance to enter the second round, ended in fourth and fifth place, respectively. The
decline of these candidates, whose campaigns consisted of old-fashioned dependency
rhetoric and accusations, showed that Argentines want a pragmatic approach
to government and not a return to discredited policies. This break with
the past was further evidenced by the rejection of Menem in
polls taken following the first round of elections.
When Menem and his team realized they could not win
the second round (polls showed that he trailed Kirchner by 40 percentage points),
the ex-president dropped out of the race. If his intention in doing so
was to deny legitimacy to Kirchner, Menems plan backfired. A poll taken a few days after Menems resignation showed that Argentines
felt the resignation strengthened Kirchner and further ruined the image of Menem.
He is now widely seen as being cowardly as well as corrupt. Menems resignation
probably destroyed his prospects of ever returning to power.
Born in Rνo Gallegos, Santa Cruz, in 1950, Nestor Kirchner became active in the Peronist Party during the early 1970s, when he joined
the Juventud Peronista (the
youth branch of the Peronist movement). After
serving as the mayor of Rio Gallegos and in several provincial government positions,
he was elected governor of Santa Cruz in 1991, and reelected both in 1995 and in 1999. During
his twelve years as governor, he led a very popular and active administration
in the sparsely-populated province. When Duhalde picked him as his
candidate in late 2002, Kirchner was virtually unknown outside
of Patagonia.
During his campaign, Kirchner promised to lead Argentina into a new era. He said he would do so in
gradual steps, rather than with grandiose announcements and plans. Combating
poverty and unemployment are ostensibly his top priorities. However,
he asserts that his social policies will not violate the governments budget restraints. Indeed,
Kirchner says he will create employment through public works programs that
will also repair Argentinas badly
damaged infrastructure (housing, railroads, roads, etc). In foreign affairs,
he proposes to give greater emphasis to integration with Latin America, especially with the MERCOSUR countries.
Before his economic and social development promises can be implemented, Kirchner
must deal with two large obstacles to sustainable economic growth. First,
he must engage the multilateral agencies and must begin to renegotiate Argentinas debt. Without
additional international credit, which essentially ceased entering Argentina in 2001, the Argentine economy will not be able
to continue growing. Furthermore, Argentinas financial
sector must be restructured following the devastating effects of the 2002 devaluations
and pesofication. These early measures
of the Duhalde administration undermined Argentinas financial
system. The government must now work to reconstruct the sector in order
to have a financial structure capable of supporting and sustaining the economic
recovery. In fact, Kirchner has little room to maneuver. Argentinas situation
is extremely delicate. Some sectors may press him to revert to the old,
discredited policies of economic nationalism and protectionism. If he
moves in that direction, however, the market reaction would be swift and highly
negative, and would very likely end Argentinas nascent
economic recovery.
Kirchner faces an awesome challenge. He must demonstrate exceptional
political ability to carry Argentina into a new era of economic growth and socio/political
stability. So far he has sent mixed signals. The day Menem withdrew
from the election, Kirchner stated he would combat the corporations that ruled with impunity during the decade of the
1990s. His statement sent a very bad message to the business community. However,
his choices for the vice presidency and for his cabinet, especially for the
financial team, seem to indicate that the government will not take a radical,
leftist stance. Scioli (Vice-President), Lavagna (Minister
of Economy -- he has been in that role for nearly a year), and Gustavo Beliz (Minister
of Justice) are young, but also experienced political figures with varying
political backgrounds. Along with the new President, they have the obligation
to lead Argentina forward to overcome the numerous obstructions
before them, and to take the nation into a new paradigm of growth and stability.
1 The views expressed in this article
are the authors and do not necessarily reflect the views of the Center for
Latin American Issues or The George Washington University
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