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Update: Argentina’s Elections

Written by Luke Musto, Lawyer

With elections looming on 27 October in South America’s second-biggest country, the race still remains wide open with no clear favorite, and along the way, there has been a number of surprises. Earlier in the year, the race had been expected to be a show-down between current president Mauricio Macri and former president Cristina Fernández de Kirchner. This has not been the case, with the shock announcement that Kirchner would not run on her own ticket but instead run as the vice-president for her former cabinet chief, Alberto Fernández. This announcement has shaken up the race once more, one which previously had been assumed by many to be a choice between the painful attempts at market reform from Macri and Kirchner’s populism. 

The Case for Reelection – Mauricio Macri and Cambiemos 

When Macri arrived in 2015 after serving two successful terms as the mayor of Buenos Aires, it was as the first president in a century to be elected from outside the historically dominant political parties, and on the back of much frustration with the status quo, along with optimism and many promises for the future and a real desire for change felt throughout the country. However, as his presidency has progressed, it has become overwhelmingly clear that Macri overpromised on his ability to actually deliver macroeconomic reform on the many distortions that he had inherited from the Kirchner administration. 

While the economy had never really stopped floundering, his popularity took a critical hit following the currency crisis in 2018, with the value of the Argentine Peso crashing by over 45% over the course of the year. In 2019, the peso has stabilised somewhat, however, the damage to Macri’s popularity and credibility has been done, especially when he had previously always positioned himself as the fiscally capable and responsible option. 

Last month, after years of moving away from Peronism, Macri made a very interesting choice for his running mate, announcing that the leader of the opposition in the Senate, Miguel Ángel Pichetto would be his vice-presidential candidate. This move has meant that he has kept Peronism divided, while at the same time Pichetto’s reputation for being pro-market has helped allow Macri to control the volatile exchange rate. Positive effects on Macri’s polling have been seen immediately, with the stabilisation of markets being evidence of investors’ support of his strategy. 

Regardless of the outcome in October, it is of significant note that come December Macri will have nonetheless made history – he will have been the first President who is neither a Peronist or a general to serve a full term since 1928. 

Striking a Balance – Alberto Fernández’s and Cristina Fernández de Kirchner

Kirchner’s shock decision to not run for president raised many eyebrows, given that she still enjoys unshakeable popularity from certain sectors in the working class, despite persistent corruption allegations currently before the courts. However, when considered further, this move has significantly improved the Peronist party’s chances of victory and helped build consensus.  The candidacy of an uncontroversial figure Fernández will likely draw many of those centrist voters away from Macri who would never have voted for Kirchner directly, while at the same time still being able to import Kirchner’s ingrained vote by including her on the ticket as the veep.

Fernández will need to continue striking a delicate balance between unifying the divided Peronist base while winning over undecided and sceptical voters by maintaining sufficient distance from Kirchner. Given that a large proportion of the Peronist base was left disappointed by Kirchner and her performance during her presidency, in order to draw back support and votes, in effect Fernández will need to criticise his running mate, keeping in mind Kirchner’s ingrained votes and support. 

Against the odds, Fernández has so far been able to accomplish this balancing act, by standing by measured criticism of Kirchner’s past actions as president but at the same time building a perception of loyalty to his running mate. In many ways, the fact that for over 10 years he was a vocal critic of Kirchner has lent him a sense of credibility. This has allowed him to maintain a certain distance from her controversial past, and he has balanced this and appealed to her base by moderately defended her in the current corruption charges against her. 

His first official campaign ad was able to embody all this, which premiered earlier this month, reminding Argentina of his role in getting the country out of the 2001 economic crisis, while subtly acknowledging his criticisms of Kirchner in a positive light. “When I don’t agree with something, I speak up,” he says in that ad. “Cristina thinks I’m very conciliatory, and that’s true. But when it’s necessary, I know how to put things in their place.”

The Way Forward

The latest polls have been limited in what they reveal in relation to October’s outcome. While polls conducted in early July indicate that the Fernández ticket would gain the most votes in the first round, in a runoff scenario against Macri the result would still be too close to call. 

One thing, however, is clear. Regardless of the outcome, it seems that the Argentines are recognising that the ongoing economic issues are structural and not down to any one candidate or party – not discounting the role played by the chronic mismanagement that the country has endured. Bipartisan support will be needed, regardless of who wins, if the ultimate winner wishes to be able to introduce reform and reverse Argentina’s fortunes. This has been hinted at by the names of top alliances, such as Macri’s Together for Change, and Kirchner’s Front for Everybody. There is a growing sense in Argentina that the system in place has not served the country well, and that the time for cooperation may be nearing if a way forward is to be found. 

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Peru, Bolivia, Ecuador, Brazil, and Argentina. Over the last 18 years, we have been supporting foreign companies with their growth in Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.

To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at cmm@hgomezgroup.com