Monday 19 August 2019

Mauricio Macri election win ends Argentina's Kirchner era

Mauricio Macri celebrates his victory with his wife Juliana Awada and daughter Antonia (AP)
Mauricio Macri celebrates his victory with his wife Juliana Awada and daughter Antonia (AP)

President-elect Mauricio Macri's promise to revitalise Argentina's sagging economy with free-market reforms and improve strained relations with the United States has carried him to a historic win that ended 12 years of often-conflictive rule by President Cristina Fernandez and her late husband.

But when the business-friendly mayor of Buenos Aires takes office on December 10, he will inherit a country with around 30% inflation, near-zero economic growth and entrenched government social spending that private economists warn is not sustainable. He also lacks majorities in either chamber of congress to pass his deep reforms.

"Macri will begin his mandate in a difficult political position," Daniel Kerner from the Eurasia Group, a political risk consultancy, wrote. "He will have to make difficult economic adjustments and face serious political constraints."

With 98% of the vote counted, Mr Macri, 56, had 51.5% support compared with 48.5% for ruling party candidate Daniel Scioli, Ms Fernandez's hand-chosen successor. Mr Scioli, governor of the vast Buenos Aires province, conceded defeat and Mr Macri claimed victory.

"Today is a historic day," said Mr Macri, addressing thousands of cheering supporters as horns blared across Buenos Aires. "It's the change of an era."

The era he hopes to end is that of Ms Fernandez and her late husband and predecessor Nestor Kirchner who rewrote Argentina's social contract and dominated the nation's political scene with a mix of patronage, charisma and withering attacks on opponents.

Ms Fernandez battled international creditors, had strained relations with Washington and allied her country with late Venezuelan president Hugo Chavez and his successor Nicolas Maduro.

During the election campaign, Mr Macri vowed he would listen more and talk less than Ms Fernandez.

He said his presidency would not be about "revenge" or "settling scores", but rather helping the country progress.

"I feel so happy because today we put an end to the mafia" of ruling party rule, said Felisa Sanchez, a Macri supporter waving an Argentine flag.

"They claimed to be Robin Hood helping the poor with social welfare plans when the poor are really helped with jobs and education."

But fulfilling his campaign promises may prove difficult.

Mr Macri has pledged to lift unpopular controls on the purchase of US dollars and thus eliminate a booming black market for currency exchange. Doing that would probably lead to a sharp devaluation of the Argentine peso. With foreign reserves around 26 billion dollars, low for such a large economy, the government would desperately need an immediate infusion of dollars.

That could come from many different places, but ultimately would require structural changes to a largely protectionist economy, solving a debt spat and developing warmer relations with the United States and other nations.

And Mr Macri's background will feed Argentina's political polarisation after more than a decade of left-leaning government.

He hails from one of the country's richest families and rose to prominence as president of the popular Boca Juniors soccer club. On the campaign trail, he sometimes talked about being kidnapped in the early 1990s, an experience he said helped him understand the needs of others and he credits with pushing him into politics.

Later, as major of Buenos Aires, he was known for a technocratic manner that stressed efficiency over style.

He campaigned for president on promises to jump-start the economy by lifting many tariffs, lowering taxes and attracting foreign investment.

He promised to solve a long-standing New York court fight with creditors in the US who Ms Fernandez called "vultures" and refused to negotiate with, which kept Argentina on the margins of international credit markets.

Mr Scioli had been expected to win by 10 or more points in last month's six-candidate, first round of voting. His failure to do so set up the run-off vote with Mr Macri.

Mr Scioli tried to regain momentum by frequently attacking Mr Macri. He said a Macri win would subject the nation of 41 million people to the market-driven policies of the 1990s, a period of deregulation that many Argentines believe set the stage for the financial meltdown of 2001-2002.

Mr Macri's win signals a clear end to the era of Ms Fernandez and her late husband. The power couple who gained popularity by spending heavily on programmes for the poor, raising tariffs to protect local economies and passing several progressive laws, including the legalisation of gay marriage in 2010.

Mr Macri frequently repelled Mr Scioli's attempts to paint him as a 1990s neo-liberal, saying he would lead with "21st-century development" as opposed to "21st-century socialism".

In recent weeks, Mr Macri increasingly talked about international relations, signalling some of his foreign policy priorities.

He said he would push to expel Venezuela from the South American trade bloc known as Mercosur because of the jailing of opposition leaders under Mr Maduro. That would be a huge change for a continent where many countries, including neighbours Chile, Brazil and Bolivia, have left-leaning democratic governments that have maintained close ties with Venezuela.

PA Media

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