Today is the 169th anniversary of the death of Independence hero José de San Martín but all the talk in Argentina this week has been about a far more recent demise – namely, President Mauricio Macri’s re-election bid.
The crushing defeat of his Juntos por el Cambio coalition in last Sunday’s PASO primaries was at the same time a shock result (astounding even the most optimistic victors) and a glaringly obvious accident waiting to happen. In this newsroom our tasks over the last 15 months have included assembling uniformly grim batches of negative economic data, week after week. Hardly an edition went by without our asking each other how Macri could possibly win. Since March these tasks have also included chronicling a long string of dismal provincial results for government allies, also leading to incredulity as to how reelection was possible, but in neither case did we question the conventional wisdom that Macri was at least competitive – the post-modern logic of this 21st century and big data era somehow permitted this paradox of electoral success amid economic failure. In hindsight this blind faith looks almost akin to belief in a flat earth – we need look no further than a backlash against rigid monetarism for the causes of this debacle.
The next question is whether this meltdown is irreversible, leaving us in the presence of a premature coronation of Frente de Todos presidential candidate Alberto Fernández, now sitting on a 15-percent lead. A comeback might look like a mission impossible but need not be a miracle – if volatility is the name of the game for the markets, why not for voter preferences, confounding the opinion pollsters yet again? If the economy really plunges out of control as it did on Monday, many people might feel nostalgia for the dire straits preceding Macri’s electoral destruction and be panicked into voting for a return to the previous status quo. Given this possible scenario the chances of re-election could be as high as 10-20 percent rather than the 0.1 percent stated by various pundits but while this would be good news for Macri, it would be bad for everybody else. The big worry here is that both main candidates would stand to reap electoral dividends from economic disaster (since deepening poverty from mega-devaluation and hyperinflation would normally benefit the opposition), turning “the worse, the better” into their political self-interest.
Fortunately, events did not head that way after Monday this week because the two rivals gave their political self-interest a different reading. It definitely does not suit Alberto Fernández to inherit “a country in flames” (in the Spanish phrase) – even if that scenario in the past successively led to a decade in power for Carlos Menem and for the Kirchner couple, he himself would not be the beneficiary, likely acting as an Eduardo Duhalde-style steppingstone for somebody else (most probably his running-mate, ex-president Cristina Fernández de Kirchner). As for Macri, a meltdown would turn his closing months into a nightmare and poison his name in history forever. Both men moved to tone down the confrontation with Fernández escalating the economic pragmatism and disavowals of default characterising his campaign and Macri lurching into a raft of blatantly electioneering measures (dare we say populism?) far more aimed at recovering voters than zero deficit. If such convergence continues, we might end up talking about the death of the “grieta” polarisation as much as this administration – as things now stand with devaluation multiplying the pesos needed to pay next year’s debt overhang of US$ 30 billion, renegotiation with the International Monetary Fund (IMF) looks inevitable, no matter who wins.
If the odds on Macri’s re-election are minimal, his chances of survival are zero. It is already striking that for the first time in his career he entered this PASO primary without any of the hard right – those nostalgic for the “cross and the sword” had Juan José Gómez Centurión (a retired Army lieutenant-colonel and carapintada mutineer flagging the pro-life cause), market fundamentalists had the economist José Luis Espert and businessmen allergic to the open economy and graft trials had already manufactured the Roberto Lavagna candidacy. Even if the president’s petulant and irresponsible outburst on Monday was rightly criticised across the board, it was the real Macri talking and finding a singularly tactless way to state the obvious (who can doubt a causal connection between Sunday’s result and the next day’s market chaos?). A president freezing oil prices for the rest of the year is no longer Macri and nor can he start afresh in an improbable second term because he will lack the mandate for the structural reforms to fix the economy. As things now stand, Fernández would be far better placed for such Menem-style reforms but he also carries much heavier ideological baggage with Kirchnerismo than Menem ever did with the Group of Eight leftist deputies.