October 31, 2007
As expected, the First Lady of Argentina, Cristina Fernandez de Kirchner won the presidential election on Sunday by a large margin, receiving 45% of the vote, more than 20 points higher than Elisa Carrio, who finished in second place. What accounts for this decisive victory? In brief, "it's the economy, stupid." For the past five years, Argentina has recovered from an awful panic and is now among the fastest-growing countries in the region. Aside from saying she wanted to "deepen the changes" brought about by her husband, Ms. Fernandez de Kirchner managed to avoid specific policy questions during the campaign, taking advantage of her husband Nestor Kirchner's huge popularity. As of December 10, the neighboring countries of Chile and Argentina will both have women serving as president, which is an astounding leap forward in Latin American social norms. (What about Hillary next year??) See Washington Post. This marks the second time in Argentine history that a woman will serve as president. The first time was in 1974, when Isabel Peron succeeded her husband Juan Peron after he died. A little over two years later, Isabel was overthrown by a military coup. Cristina will be the first Argentine woman elected to the presidency.
As for her plans once she takes office, BBC quoted Ms. Fernandez de Kirchner as emphasizing poverty reduction and economic integration among Latin American countries. Perhaps she should also work to make the inflation statistics more trustworthy and reliable. I am curious to see whether she will try to repair the breach in the Peronista political movement for which her husband bears a heavy responsibility.
Personally, I am appalled that the Kirchner's have gotten away with their irresponsible economic policies, including a default on loans to commercial lenders after the 2001 economic crisis. Argentina in effect "forced" the international financial system to lend it money to restart its economy, gambling that the IMF and other multilateral lending agencies would blink rather than suspend financial ties. That would have precipitated a continent-wide financial panic, and Argentina knew that the IMF was not willing to risk that. It was a lot like the way President Clinton faced down Newt Gingrich and the Republicans in the fall of 1995 over the budget. But I have a feeling that the underlying distortion's in Argentina's economy (currently masked by manipulated government data) will become all too obvious in the near future. If so, Cristina will find herself in a difficult position, and Argentina will probably veer toward ungovernability once again.