Who would say that by the end of 2019 we would be calling Argentina pragmatic and Chile unpredictable? That Venezuela would be apparently quiet and that part of the Latin American continent would be in turmoil? And that in Argentina everything would seem to go with gradualism?
Neither the transition nor the first announcements seem to denote the tango-mirrored drama that Argentina often treads.
Alberto Fernández introduced himself to Argentine society, and to the world, as a thoughtful, ordinary man who drives his own car into his own inauguration ceremony without lavishness.
To understand Fernández’s speech in Congress, one must take into account the 18th century The Social Contract, by the Swiss writer Jean-Jacques Rousseau, who believed in a pact between individuals to create a society. For Rousseau, the state is an association, not submission. This was the heart of Fernández’s thinking (at least on paper). He is supposed to have four years to prove this thesis. The president swore he would work for the country’s unity, fostering the end of the ideological breach.
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Coffee with Cuba, lunch with the USA
However, much went unnoticed during the inauguration on Tuesday. They often say that the devil is in the details, and in this context, is also in the plans of the new management.
Newspapers had a party with the US delegation leaving the room when Maduro’s delegation arrived. However, on his first day as president, Fernández had coffee with the Cuban representatives and had lunch with the US.
Markets waited anxiously as he would address the issue of foreign debt. We have to evaluate this “supposed” expectation with tweezers.
Fernández is in permanent contact with representatives of the International Monetary Fund (IMF). And not only with them, but also with other holders of the Argentine debt. There is no secret default plan. There never was. Since he ran for office, he has been talking candidly about it.
What is invisible is the result of constant contact with those who bet on a horse that did not win the race, former President Mauricio Macri.
The last IMF transfers have already taken place in an electoral context. In Washington, they knew it was a gamble. However, Kirchnerists were never, contrary to popular belief, bad payers. Alarmists will bring out the word default, but Alberto has already spoken openly that patience will be necessary with Argentina, but that the country will pay its debts.
The logic behind this promise is simple. Putting the economy on its feet, boosting consumption, reducing the huge burden of the average Argentine citizen of basic fees such as gas, electricity, water, and transportation, and prospering. That’s how Argentina will rebuild its reserves.
The surprise of a Nobel
Indeed, Nobel laureate Paul Krugman recently said he was surprised by the recurrence of errors in Macri’s management compared to the 2001 crisis. For the economist, it was a primary mistake to borrow in foreign currency. He believes this made a series of necessary reforms impossible. For him, Macri could not or would not bear the social weight of doing so.
When he came to power in 2015, Macri acted without gradualism in removing subsidies from basic service fees. At the time, I met Argentines who started to pay gas bills of BRL 30 and ended up with BRL 3,000. There was a thriving lower middle class that was pushed into poverty.
This is not to say that Alberto’s formula will work. But in Argentina, asphyxiating consumption did not work. It is worth saying that Macri will say that he had no time or room to maneuver after 12 years of Kirchnerism. Many of the Macri policies have been waiting for foreign investments that have not arrived. He made choices. Right or wrong, History will be the judge.
When I was in Argentina in November to cover the elections, I was struck by the deteriorating living conditions of the lower middle class. Many with three informal jobs to maintain a rent; working seven days a week; 16 hours a day; all to chase rampant inflation. That was certainly visible to the eyes.
It was predictable
It was expected that markets would not react well to the next day of ownership. Nor could they. Although the country’s dealings normally continue with neoliberal markets, Alberto had to speak to the internal public.
He evoked national symbols such as “Nunca Más” (Nevermore) against the Argentine military dictatorship, complained about the sovereignty of the Falkland Islands and island territories, complained about the foreign debt, spoke to the trade unionism (very strong in the country) and promised to be the most Argentine of Argentines, in a boastful manner and somewhat admirably short-sighted in relation to its world proportion.
But not even close, there was bleeding on the Buenos Aires Stock Exchange. Martín Guzmán, the new economy minister, appeared at the end of the first day, without major announcements, no macroeconomic earthquakes.
The Cristina factor
Another internal speculation was what Cristina Kirchner‘s role in his government would be like. Here, once again, some clues have been invisible to many eyes.
Cristina ruled the country for two terms, was the first lady for one, is known as a controlling and centralizing woman, learned to speak louder in a man’s world and to buy big fights. To some, she is an unpleasant woman, to others a patriot.
Over a dozen court cases weigh on her, besides a low-profile daughter ill in Cuba (without a privileged forum, Cristina fears she will be the target of opposing attacks if she returns to Argentina). The son is a federal deputy, has immunity, and is doing very well. But Cristina’s family situation is not a disposable factor in this equation, nor is her judicial situation.
Christina’s face was “grudging” as she greeted Macri. She declined to use the same pen as him and people say, as well as videos circulate, that the trustee turned her back on the former wheelchair vice president. This may be Cristina’s role: to look after wounds that cannot be closed with a speech delivered by Alberto, in response to a more hardcore militancy, which is unwilling to approach Macri voters.
Perhaps no one will ever know for sure the intricacies of the discussion that defined the Alberto-Cristina colligation. At the time, much was said about Cristina’s rejection, something that could throw the numbers down. However, once again, we have to return to the delicate family situation of widow Cristina and, especially, her judicial situation.
Lawfare
A clue may be in one of the battles the new president has sworn he will fight. He promised in his speech to make a judicial reform in the country.
Alberto Fernández is a lawyer and academic, although he spent much of his life by Cristina and the late Nestor Kirchner’s side. Both he and she have been complaining about what they call lawfare.
The fact is that, despite being speculation, we can circumstantially raise that this factor may have played a role in the tacit governance agreement between Alberto and Cristina. Could this be one of Cristina’s great interests in this move and not the power itself? Time will tell.
Globalism
Meanwhile, Alberto speaks to the moderate militants and the world. The new president put bandages on the relationship with Brazil in his speech, did not deny that he would seek other markets and used the word globalism and not globalization, showing to be attuned and willing to engage in pragmatic foreign relations. He said he will not turn his back on Mercosur, but did not promise exclusivity. In fact, even before being elected, he visited much of the region and opened a strong front with Mexico for business.
The citizen Alberto
Alberto, a common name, almost like any other, that seems to not want to stand out among others. Alberto, the first Argentine president to drive his own car to his inauguration ceremony. However, how many ordinary Argentine citizens live in Puerto Madero’s exclusive upper-middle class neighborhood?
“When my term ends, Argentine democracy will complete 40 years of continuous validity. On this day I would like to show that Raúl Alfonsín was right. I hope that together we can demonstrate that democracy heals, educates and feeds itself. Let’s get up and start our march again”, he said.
In the last words of his congressional speech, which lasted about an hour, Fernández quoted a former Argentine president, and once again put himself in the shoes of the common man, who rises to work and fight every day. To know if these words will sound demagogic or visionary, we will have to wait four years. However, much will not be visible to the eyes in the new Argentina. You will need to read between the lines.
