Experts’ Verdict on the Kirchners: ‘They’ve Failed’

by Javier Arevalo Rendall

With Argentina’s election still fresh on people’s minds, a group of political analysts met in London recently to discuss the results and their possible impact on Argentina’s future. Their conclusion: “The Kirchners have failed” and “governability is not at stake,” as the Kirchners warned it would be.

Back in March, former president Nestor Kirchner said that in the election Argentines would decide whether “to consolidate governability” or “to take a step back.” He warned apocalyptically that if the government lost its majority in Congress, Argentina would return to the dark days of the 2001-2002 crisis.

But while the government did indeed lose its majority in the election, the country hardly seems on the verge of falling apart.

Osvaldo Marsico, Charge d’Affairs at the Argentine Embassy in London, minimized the negative fallout for the Kirchners. Marsico said that, although the ruling couple and their Frente Para la Victoria party lost power in Congress, governing the country won’t be a problem as long as they get enough cooperation from opposition parties.

“Frente Para la Victoria lost in both chambers so they will have to deal and negotiate with allies,” Marisco said.

But other analysts challenged this interpretation.“To me it seems evident that they will not seek consensus. It’s not their style,” said University of Westminster Professor Celia Szusterman.

Szusterman said governability isn’t really an issue. She drew a comparison between former president Carlos Menem’s government of the 1990s and the current one.  “When Menem lost the mid-term elections in 1997, nobody mentioned the word governability. That’s because he had a good relationship with everybody. Nowadays, the only threat to the government is the ruling couple themselves if they continue denying reality – saying that there’s no inflation, no crime, no health risks…”

Szusterman said the election results were partly a self-inflicted blow to the Kirchners. It was the Kirchners who made the election a referendum on themselves. “Cristina Kirchner said it herself, she intended to make it very clear: ‘These are elections for ‘the model.’ Whatever it is, the model was defeated,” Szusterman said.

The Kirchners’ future doesn’t seem too bright, the analyst said. “Peronists still dominate the political scene, but they won’t support a loser. They’ve seen that (Néstor) Kirchner has no chance of being the presidential candidate in 2011, and that he has less and less control over ‘La Caja’ (the federal budget). They simply don’t recognize him as the leader any longer. But whatever happens, I don’t think they will seek consensus.”

The panel also discussed the Kirchners’ reputation for manipulating government statistics. “Kirchner brought forward the elections, and cooked … the inflation figures,” said Will Ollard, chief economist at Latin American Newsletters. In Ollard’s view, the Kirchners fiddled with the economy in an “unnatural” way by not allowing “the prices of energy, food and transport to go up.”

So, what comes next?

“The Kirchners said things would fall apart. And it’s in their interest for things to go wrong. They want to convey the image that they are the only cure against disaster,” said Ollard.

Peter Edbrooke, Chairman of the British-Argentine Chamber of Commerce, said the president’s policies have been bad for business. “They punished key areas of the economy: high export taxes affecting agricultural and mining products crippled the industries. There has been a marked discouragement of imports and zero incentives for industrial production.”

But these aren’t the only aspects of the Kirchner government that worry businessmen who want to invest in Argentina: “There is a tight control of domestic prices and a manipulation of (economic data). There has been an abuse of the legal system, and a fostering of favoritism, which is but one step from the dreaded C-word: corruption.”

Edbrooke thinks the key factor that will determine the future of the Argentine economy in the next few months will be the president’s governing style. “In the last few months, the government has increased its autocratic, confrontational and interventionist approach. They chose to turn the elections into a referendum on the Kirchner regime. They have failed. The results speak of a rejection of their confrontational and autocratic ways. And so far they haven’t changed them, they have intensified them.”

Stephen Chandler, chairman of Global Infrastructure, says Argentina has a good chance of improving before the next presidential election. But he said this will depend on having a strong opposition. “They must prepare their presence and strengthen their resources to be ready to grasp the looming opportunity. Whoever steps forward will need to be more central and moderate in their policies.”

“From the business point of view, the outlook is very positive.” says Edbrooke “Change means that business opportunities will be available at a lower cost than when things start to go well. And it is worth remembering that in Argentina, when improvement occurs, the pick-up is very rapid.”

*Born in Argentina, Javier Arevalo-Rendall is a freelance writer living in London. He writes for the newspaper Crítica de la Argentina, as well as the literary magazines Miranda, Sismotrapisonda, and La Otra, among others. He blogs at:www.javoarevalo.wordpress.com

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