Argentina’s political landscape has shifted
dramatically, as expected. Alberto Fernández, the Peronist operative known for his
work as Cabinet Chief under President Néstor Kirchner in 2003-2007, is the new president. He took office on Tuesday in a smooth
transition that was crowned by his embrace with outgoing
President Mauricio Macri, leader of a centre-right coalition that won in 2015.
The outgoing and incoming leaders produced some very
civil conciliatory gestures when they attended Mass together
on Sunday. But Cristina Fernández de Kirchner, the new vicepresident, openly expressed her disgust at
having to share the inauguration ceremony
with Macri in Congress on Tuesday.
The departing president, meanwhile, has
made a point of keeping his private propaganda machine spinning at the speed of a
cyclist racing the Tour de France, in a bid to
secure a political future and a presidential
comeback at some point in the future. But
the race is over – many other opposition
politicians have ambitions.
The new immediate political scenario is
dominated by the Peronist unity brokered
by Fernández de Kirchner earlier this year,
when she anointed Alberto Fernández as
presidential candidate. Yet one thing has not
changed: Argentina is still staring down the
barrel of another massive sovereign debt
default, as it did under Macri. The debt burden includes the
giant US$57-billion loan from the International Monetary
Fund (IMF) that Macri asked for to rescue his administration
President Fernández is now flirting with default in what is
probably a strategy aimed at sitting the creditors down at a
negotiating table to accept the Republic’s conditions, which
according to speculation would include a grace period to honour the debt and not necessarily a haircut.
Argentina has always had a love-hate relationship with its
economy ministers. There is this undying hope that a sensational economist will come one day to save the nation from its
financial doom. The new minister is Martín Guzmán, a 37-yearold academic trained at Columbia and Brown who has Nobel
Prize winner Joseph Stiglitz – a critic of “free market fundamentalism” – as his mentor.
Will Guzmán, who during a press conference on Wednesday
was fiercely critical of Macri’s neoliberal policies, manage to
save the day? Possibly. But he is not a bird, he is not a plane
and he is certainly not Superman. He is Guzmán. Ministers
are humans, not men or women of steel, and must show what
they are made of under pressure.
The last economy minister to turn into a sensation is Axel
Kicillof, the economics professor who headed the portfolio under
Fernández de Kirchner. He took office as the governor of Buenos
Aires Province on Wednesday. The new man in charge, a member of the Kirchnerite wing of the new ruling Peronist coalition,
immediately announced that he is scrapping a 25-percent utility
rate hike announced by María Eugenia Vidal, the outgoing
Macri-allied governor. Kicillof, the most left-leaning politician to
govern Argentina’s biggest province since 1983, has summoned
private utility companies to discuss the rates.
This is definitely the shape of things to come: welcome back
state regulation. President Fernández addressed Congress on
Tuesday and announced plans to submit a parliamentary bill to
declare an economic emergency. Effectively, such an emergency
will grant the Executive sweeping powers to dictate economic
policies. The priority, the new president has
said, is those in need. New policies, Guzmán
said at his own press conference, will be detailed in writing.
There’s more sweeping of brooms on the
way, judging by President Fernández’s inaugural speech. A drastic reform of the federal
courts system is in the works, along with the
“intervention” of the Federal Intelligence
Agency (AFI). Federal judges wield huge
clout and often use the intelligence agency to
carry out shady investigations. This, according to the new president, is the dark side of
An overhaul of the intelligence sector is
expected to be carried out by Gustavo Béliz,
the new strategic affairs secretary. Béliz worked for the early stages of the Kirchner presidency (under the wing of Alberto Fernández) but was kicked
out when he clashed with the state intelligence agency, then
known as SIDE.
Now Béliz is back. President Fernández has vowed to abolish
the huge “reserved funds” used by the state intelligence service,
which has amassed so much power under so many administrations that it has the whiff of a secret police designed to snoop on
citizens rather than to fight crime. That secret police is part of
what President Fernández has called the “dungeons of democracy” which – in a jab to the press that will prompt controversy –
opens the way to “media lynchings.”
This reform, which is bound to ruffle some powerful feathers
in the courts and the intelligence services, is launched at a time
Fernández de Kirchner, the new veep, is facing corruption allegations in court. President Fernández claims that the vicepresident is the victim of the seedy court system, which has
worked to frame her with the help of the state intelligence services.
The question is whether this declaration of all-out war against
the purportedly corrupt federal judges and spies will bring about
political instability agitated by those who are about to feel the
wrath of Béliz’s return as a powerful state secretary. Yet the
headlines are unlikely to be about the judicial reform. The volatility will be stoked if the economy is not put right. Guzmán
must make the economy grow, curb inflation and fight poverty.
The regional outlook is complicated. Already there are signs
of diplomatic tensions with the United States after a Donald
Trump administration official complained about Cuban and
Venezuelan officials attending Tuesday’s inauguration. News
about the recently-ousted leftist Bolivian President Evo Morales
seeking asylum in Argentina on Thursday could further irk
The pressure is tremendous. The economy is in a sorry state
of depression. President Fernández already looked like he had
aged a decade in Congress on Tuesday, with his eyes magnified
behind the big round reading glasses he put on to deliver his first
speech as head of state.
The new president had started the day driving his own Japanese sedan to Congress like a rally driver cruising on a victory
lap. But the race has just started. Rally cars can fly off dirt roads
spectacularly, and in no time at all. The scenes were chaotic when
President Fernández was driven to Government House, with his
bodyguards on foot wading through the crowd for the motorcade
to slowly nose down the avenue. Who organised that mess? It
made the new president look makeshift, vulnerable and in the
middle of an institutional vacuum. Still, there was muscle in the
huge crowd that turned out in Plaza de Mayo to voice support. It
quickly filled the void.