Kirchner: Anticipating the Judgment of History

By Robert A. Potash

(A Spanish-language version of this article was first published last month in La Nación. To read it in Spanish, click here.) It is being published here in the original English with the author’s permission.

hen Argentine historians of the future look back on the Nestor Kirchner era, a term they are likely to apply to both the four years when he was the Nation’s Chief Executive and the years when his wife was a ceremonial rather than decision-making president, what conclusions or generalizations will they reach?

Will they say that, after Perón, he was the most skillful Peronist to hold power, a politician who was elected with only 22% of the vote in 2003 yet managed to achieve a control over Argentine political life to an extent not seen since the end of military rule? Will they agree with a recent Interior Minister’s claim that he was Argentina’s best president in the past twenty years? Will they note that it was under his leadership the country emerged from the post-2001 chaos, and that year after year it enjoyed unprecedented, Asian-like, economic rates of growth?

Or will historians, looking back at the Kirchner years, focus on the negative aspects, the damage done to the country’s institutions. Although Cristina Fernandez de Kirchner in her 2007 campaign for the presidency promised to strengthen institutions, the fact is that the situation has worsened. With one exception, the Congress continued to serve as a rubber stamp for the initiatives of the Executive Branch; the Judiciary remained under threat of reprisal for decisions against officials or friends of the government, and the political party system suffered further deterioration.  Even elections were turned into a parody when Nestor Kirchner as head of the official party tried to convert the June 2009 congressional elections into a plebiscite of support for Cristina by having well-known personalities run for offices that they had no intention of exercising.

Kirchner’s initial success in building up both his power and his popularity owed as much to the timing of his appearance on the national stage as it did to his leadership skills. Disillusioned by the financial collapse of 2001 and the ensuing economic and political instability, the Argentine public was looking for a strong leader, a civilian caudillo if you will, and therefore indifferent to institutional or constitutional departures.  The Kirchner years, moreover, unlike those of his predecessors going back to the 1990’s coincided with an unusual boom in international trade.  This trend originated in other countries, especially China, and generated a demand for primary products that would have benefited Argentina regardless of who was president. The Argentine economy, led by its agricultural sector grew at unprecedented rates, and in the process generated the foreign exchange and fiscal surpluses that eased the task of governing for the Kirchners.

Historians may well question whether Kirchner’s government made the best use of these surpluses.  A notorious example was the decision to use $8 billion of Central Bank reserves to pay off the entire debt to the International Monetary Fund.  Kirchner, for whom the IMF was the chief villain behind the financial collapse of 2001, seemed to assume that the favorable trade balances would continue indefinitely. By paying off the debt to the IMF, he felt he had not only struck a blow for economic independence but also eliminated external questioning of his economic policies. The shortsightedness of that decision was demonstrated soon after when his government had to place a loan with the government of Venezuela at three times the interest rate it had been paying to the IMF.

Short- term thinking rather than planning for the long term, it can be argued, also underlay many of his domestic policy choices. In the social welfare field, direct payments to impoverished families and individuals suffering from employment was an appropriate response, but the government showed less interest in making the long-term investments in the fields of education and public health that might have had a permanent impact on the lives of the poor.

The government also chose to pour money into subsidizing various economic activities rather than resolve their basic problems.  This was especially true in the energy sector where a large infusion of capital was needed to keep up with growing demand.  Here, Kirchner’s anti-foreign prejudices led him to postpone facing up to the need for significant new investment because this involved allowing foreign-owned utilities to raise their rates.  Eventually during Cristina’s presidency, the government had no alternative but to allow the rates to rise. Historians may note a certain parallel here with President Juan Perón, who opposed opening the petroleum industry to foreign investment in his first term only to turn around and accept it in his second.

Kirchner’s ability to create the network of political loyalties that enabled him to dominate the government rested ultimately on the selective distribution of public funds. Political leaders in democratic countries have often resorted to this practice but in Kirchner’s case it involved the use of emergency financial powers long after the emergency passed. Kirchner was thus in a position to reward the provinces whose representatives in Congress supported his initiatives and to punish those that opposed them.  Kirchner’s supporters in Congress, moreover, enabled him to sidestep the legal requirement governing the distribution of tax revenues to the provinces by understating the revenue figures of the budget law.  The millions of pesos collected in excess of the budgeted figure went into the famous “caja” that Kirchner used to gain or retain the support of governors, mayors, and other politicians.

Kirchner’s confrontational style of dealing with sectors he viewed as potential enemies, and these included the media, the military, the church, and certain business groups, did little to endear him to those outside the ranks of his immediate supporters or the recipients of his largesse.  But his political opponents were so weakened by ideological differences and personal rivalries that they were unable to prevent him from achieving his goals.  In 2005, by having his wife Cristina Fernández de Kirchner, already serving as a Senator from Santa Cruz Province, win a Senate seat from Buenos Aires Province, he was able to wrest control of its Peronist political machine from Eduardo Duhalde.   In July 2007, he let it be known that he would not seek a second term and without any pretence of a nomination process, he announced that she was his candidate to succeed him. In the October elections, she would win the presidency with the 45% of the votes required to avoid a runoff.

By this time, however, cracks were beginning to appear in Kirchner’s management of the economy.  Confronted with a growing inflation rate that would have required increased payments to foreign bondholders, the President through his Commerce Secretary replaced the staff of INDEC, the official statistical bureau. It then announced a figure below the anticipated rate and in the process undermined confidence both at home and abroad in the credibility of its figures.  But the biggest loss of prestige for both Kirchners arose from their fight in 2008 with the farm sector over a decree that raised the duty on soy exports from the existing minimum of 35 per cent up to as much as 90 per cent depending on the price. Historians will note that agriculturalists big and small protested the decree and resorted to strikes and road blockages, but Nestor Kirchner, seeing this as a threat to his power rather than an issue on which compromise was possible, refused to make any concession.

After months of tension, President Cristina Fernández agreed to have the Congress take a vote to endorse the decree.  By this time, the issue had so inflamed opinion in those provinces where agriculture was the major industry that Senators usually loyal to the Kirchners had a hard choice to make.  The unexpected result was a tie vote with the Vice-President of the Nation, an ex-Radical Party governor from Mendoza and hitherto political collaborator, then casting the deciding vote against the Kirchner administration. It was a historic moment and marked the beginning of the end to Kirchner’s dominance over Argentine political life.

As of this writing, the June congressional elections are still several weeks in the future. Meanwhile, dissident Peronists have organized to compete with official candidates in various provinces, and opposition party leaders, overcoming their traditional differences, are trying to unite behind single lists of candidates. What remains to be seen when the votes are counted is how much damage will be done to the Kirchners’ hegemonic system of governance. If they lose control of congress, will Nestor abandon his hard-line attitudes and allow Cristina to engage in the compromises that are a normal feature of a democracy?  In short, will they be able to adapt to a new power configuration in which Nestor will no longer be able to say to himself “aquí mando yo.” The historian of the future will know the answer.

*Robert A. Potash is professor emeritus of history at the University of Massachusets, Amherst. He has written prodigiously about Argentine military history and politics. Local historians say he is as good as they come and knows more about the country, its military and politics than anyone else outside Argentina. His works, including The Army and Politics in Argentina series, have had a profound impact on domestic and foreign perceptions about the country.

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