Argentina's populists are back in power, but can they succeed?

January 1, 2020

 

Amongst the deluge of tightly contested elections that occurred over the closing months of 2019, one could be forgiven for glossing over the recent vote in Argentina. However, to do so would be a grave misjudgement as it serves as an instructive microcosm of the conflict that has increasingly come to characterise politics across the globe. That is, between liberal “moderates” advocating strict adherence to the international capitalist order and its constitutive institutions, and populists seeking to resist, if not disrupt, said institutions. 

 

In Argentina, the insurgent populist trend is embodied by Peronism, inspired by Juan Perón, a military general-turned-politician who over his life served three terms as president. The Peronist movement is centred around the elimination of poverty and socio-economic inequalities. In particular, it advocates the principle of Justicialism, defined as the commitment to “an adequate distribution of Social Justice giving to each person the social rights he is entitled to”.

 

Many in the international left have lauded Peronism’s prioritisation of the individual’s innate social worth over the pursuit of economic growth. However – whether attributable to economic mismanagement induced by ideological zeal or structural constraints imposed by a repressive international capitalist regime – the movement’s ascendance to political power has often precipitated economic crises in some form or another. This is exemplified by the fact that since 1958, Argentina has signed a staggering 22 agreements with the IMF.  

 

It was against this backdrop that Mauricio Macri, the leader of Cambiemos, a coalition of centre-right parties, ejected from power the Front for Victory, a Peronist electoral alliance which had governed the country for the previous twelve years. Macri, priorly the Chief of Government of Buenos Aires, was elected on a platform of restoring the country’s crisis-prone economy, following the chaotic and controversial tenure of his predecessor, Christina Fernández de Kirchner. The latter left office with inflation running at approximately 25%, a budget deficit of more than 6%, and the state’s foreign exchange reserves severely depleted. Macri, a fresher face, was subsequently perceived by his domestic supporters and international onlookers alike as a leader who could address these problems. However, while there were some early successes - including the resolution of a dispute with bondholders that had caused the country to be barred from international capital markets – Macri’s term otherwise saw a return to the economic misery that he had pledged to avoid.

 

An inability to pay off the country’s debts – somewhat stemming from a reluctance on Macri’s part to impose full-throated austerity, in addition to a currency crisis – forced the country to yet again turn to the IMF, which in June 2018 issued a $50 billion bailout, which was supplemented with an extra $7 billion within months. Nevertheless, even this immense rescue package proved insufficient to revive Argentina’s flagging economy; in October 2019 inflation reached 51.4% and the unemployment rate hit 10.6%, its highest in years. 

 

Faced with these troubling circumstances, the timing of the recent elections in October would prove nothing if not inconvenient for the centre-right incumbency. Feeding off of economic discontent, the Peronist left – now running as a broader coalition under the banner “Frente de Todos” (translated as “Front for All”) – enjoyed a resurgence in their popularity. While their campaign was fronted by Alberto Fernández, an understated and hitherto low-key figure within the Argentinian left, more attention was paid to the fact that Christina Fernandez de Kirchner, the controversial ex-president, was his running mate, playing a highly public, central role. Nevertheless, the electorate evidently wasn’t daunted by her presence; the duo won approximately 48% of the vote, above the 45% threshold required to prevent a run-off. 

 

Argentina’s voters were discontented with Macri’s failure to deliver the economic stability that he had promised; that much is obvious. Less obvious is whether the Peronists will be able to avoid the same pitfalls. If the country is to avoid economic collapse, the new government must negotiate a debt-restructuring arrangement with its international creditors – a task which will not prove easy considering the trepidation towards the prospect of a confrontational leftist government. To return to my initial question, is a conciliatory or disruptive approach more effective when dealing with the international order? We may soon find out. 

 

Image - Flickr (Leandro Neumann Cuiffo)

 

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