BY LATIN AMERICA ADVISOR
Argentine President Nestor Kirchner [today] turns over power to his wife, Cristina Fernandez de Kirchner, who was elected in October to succeed her husband. Overall, how would you rate Nestor Kirchner's term in office? What has to happen over the next four years for him to stand a good chance for re-election?
Freddy Thomsen, Head of E.F. Thomsen economic consultancy in Buenos Aires: Nestor Kirchner's main achievement during his term in office was to complete it. This was not obvious when he came to power in 2003 with 22 percent of the vote, especially considering his three predecessors were forced to shorten their presidencies. He even managed to anoint his wife as president. His quest for popularity led him to adopt many policies that will be costly to the country. Strong economic growth and political stability were accompanied by double-digit inflation, lack of investment in energy, suspicions of government corruption, manipulation of official statistics, and an unfriendly business environment for many long-term investors. It is not obvious what has to happen over the next four years for Nestor Kirchner to stand a good chance for re-election, should he decide to run. If the economy continues to perform as today (unlikely), won't voters take growth for granted and become more demanding about, say, inflation, corruption, and public safety? Should the economy weaken, will voters blame only Mrs. Kirchner and call for the return of Nestor, or will they direct their anger against both? What can be said is that Nestor Kirchner will need to remain far ahead of his opponents in quickly aligning himself with public opinion, whatever the direction in which it may swing. This quickness of reflexes was one of his strengths as president, and could continue to prevent any opposition candidate from posing a serious challenge in 2011.
Rosendo Fraga, Director of the Union for the New Majority Studies Center in Buenos Aires: At the end of 2006, President Kirchner's project to reform the Constitution to establish indefinite re-election—as he did in Santa Cruz province when he was governor—was definitively tripped up when his pilot experience of imposing it in Misiones province was categorically defeated in a referendum. The Argentine leader reacted with realism, accepted defeat, and shrewdly moved to pass an alternative plan: indefinite re-election-lite through the presidential election of his wife. That is how today in Argentine politics one can imagine that in 2011 Kirchner will return to the presidency for four or eight more years, to be later succeeded by his wife and return to power after her. In four years, many things can change in Argentine politics, and no one can guarantee whether or not Kirchner will be president again. In this regard, Venezuelan President Hugo Chavez's recent defeat confirms that politics tends to be a succession of the unpredictable. However, what Kirchner has achieved is the possibility that he will be president between 2011 and 2019. Politics, looking forward, functions like the market: "if I have the future, I have the present, if I lose the future, I lose the present." To continue having the chance to return to the presidency, Kirchner needs to have two situations in his favor: a global economy that grows and demands food, and economic growth and a fractured political opposition. The latter is important, because Chavez's defeat shows that one can lose an election with a favorable economy if the opposition comes together. Perhaps Chavez's political challenge is now to achieve, as Kirchner did, a version of indefinite re-election-lite, since, if he doesn't, the loss of future power could overtake the present.
Graciela Romer:, Director of Graciela Romer & Associates in Buenos Aires: The first thing that must happen is his truly wanting to be re-elected in 2011, but if that were to happen, he must first get through four years, which at first glance seem easier to get through than the ones he had between 2003-2004 (following the worst economic crisis in Argentine history) and on which he depends for voters to want him to return. It doesn't seem realistic to think that, if Cristina Fernandez de Kirchner (CK) doesn't govern well, people will demand his return and re-elect him. Above all, this is because the vast majority thinks Nestor Kirchner will continue playing an important role in the next government. However, the challenges CK must face are not simple. It's true that her husband leaves a more robust economy, with reserves at $40 billion, with a fiscal surplus that, although smaller than during the last electoral year, will be compensated for in the coming months by an increase in fiscal collections through export withholdings and higher taxes. Better unemployment and poverty rates are also evident. But CK must focus on various fronts—from the border conflicts with Uruguay and improving employment quality (which still remains at 40 percent marginal or informal employment), to the need to improve institutional quality and the business climate to attract investment—which becomes increasingly urgent if she wants to sustain growth rates and, above all, put the brakes on the spiral of inflationary expectations present in the country today.
Lino Gutierrez, President of Gutierrez Global, LLC and a former US Ambassador to Argentina: Nestor Kirchner assumed power after the worst economic crisis in Argentine history; he leaves Argentina well on its way to economic recovery. Argentina has averaged GDP growth above 8 percent for five consecutive years. Kirchner significantly lowered unemployment, cut poverty rates in half, and generated budget surpluses throughout his term. He negotiated a favorable debt rescheduling agreement and created a sustainable debt payment schedule. Obviously, Argentina's strong economic recovery was helped by a favorable international environment, including high commodity prices for exports and a competitive exchange rate for the peso. Kirchner leaves unresolved problems for his successor, including high inflation, subsidized gas prices, and an overly taxed export sector. Internationally, Argentina was a responsible actor during its two years on the United Nations Security Council. Argentina's deployment of troops to Haiti contributed to regional stability. Argentina contributed on proliferation issues, counternarcotics, and the global war on terrorism. Its pursuit of the Iranian perpetrators of the AMIA bombing after years of inaction was much welcomed. It is regrettable that Argentina did not move forward on the FTAA, did not follow through on second-generation economic reforms, including protecting intellectual property rights and fiscal reform, and occasionally gave Chavez a forum to promote his agenda. Although Kirchner leaves office with a high approval rating, his re-election—assuming he decides to run in 2011—will depend on how Cristina's government performs. Most Argentines see the Fernandez administration, with a number of ministers carried over from Kirchner's government, as the second act of the Kirchner administration.
Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter.