Two hundred years of Argentina, seven years of Kirchnerism

Since its independence from Spain, Argentina has experienced two British invasions, a series of illegitimate governments, the Peronist movement, a dictatorship that cost 30,000 lives, the Falklands War and a neo-liberal economy during the 1990s followed by a major economic default. Today, as Argentina celebrates its bicentennial anniversary, the political debates in the country are not very different from those faced by its founding fathers. The country still suffers from conflicts between the oligarchy and the poor (many near starvation) which have thwarted President Cristina Fernández’s left-wing political project. It will be interesting to see if Cristina Fernández’s increased popularity following the incredible bicentennial celebrations will help her husband, former president Néstor Kirchner, win a second term in the presidential election next year.

A Revolutionary May

May 25th commemorates the date in 1810 when Virreinato del Río de la Plata (Argentina’s former name) refused to continue as a Spanish colony and initiated its revolution. An anniversary provides an opportunity to evaluate the history of a country, draw comparisons, learn from mistakes, and gauge if the country is progressing in the right direction. As Argentina celebrates its bicentennial, some look to the past to evaluate whether Argentina is doing better or worse than when it celebrated the centennial. Others look to the future, particularly to the presidential elections that will take place in 2011. Most media reports from Argentina have acknowledged that the bicentennial celebrations had such a large turnout and were so successfully carried out that the image of Cristina Fernández Kirchner has not only improved, but is likely to help her husband win the presidency once again for their Front for Victory coalition of the Partido Justicialista.

“Juan Domingo Perón would have fallen in love with Cristina,” said Argentine national deputy Dante Gullo at the Argentine Embassy in Washington, D.C. After seeing Cristina Fernández Kirchner open the Bicentennial celebrations in Buenos Aires, one could clearly see her similarity to Evita Perón (although she prefers to be compared to Hillary Clinton). Speaking in front of six million people, the biggest turnout for a public event in the history of Argentina, Cristina Kirchner became emotional when she expressed her happiness about being president during the Bicentennial. With the whole country involved and all of the Argentine provinces represented, the five-day celebration consisted of a parade, concerts, and a tango show. The parade reviewed the history of the country, including the 1976-1983 dictatorship, the Abuelas de Plaza de Mayo, and the Falklands War. The President received and was praised by the heads of state of several Latin American countries, including: Hugo Chávez (Venezuela), Lula da Silva (Brazil), Evo Morales (Bolivia), and even the former president of Honduras, Manuel Zelaya.

Although the commemoration showed a united Argentine people waving flags, the celebrations did illustrate the tense relationship between the government and the opposition. Cristina Fernández did not attend the reopening of the famed Teatro Colon, which had been under renovation. The Colon is a landmark of the centenary anniversary and the golden age of Argentina, when the country used to be the world’s eighth most important economic power. Cristina Fernandez’s absence from the re-inauguration brought attention to her disagreements with Mauricio Macri, who was in charge of the event. Macri is the mayor of the city of Buenos Aires as well as the most important opposition leader.

A country in decline

During the 20th century, like most of its Latin American counterparts, Argentina sampled different economic models. Its economy moved from the neo-colonial agroexport model to Perón’s import substitution industrialization, to the dismantling of the state that started with the 1976 dictatorship and continued through the 1990s with the Washington Consensus’s structural adjustments.

During the 1990s, Argentina was governed by President Carlos Menem, who faultlessly followed the neoliberal recipes of the Washington Consensus. He privatized most of Argentina’s resources and industries as well as increased the foreign debt to the Paris Club, an informal organization founded in 1956 to negotiate Argentina’s and other countries’ external debt, running it up to US $4.5 million. While the United States spoke of Argentina as a positive economic example to other nations, the truth is that the gap between the rich and the poor was getting wider and wider. In 2001, during Fernando de la Rúa’s presidency, the country fell into a crisis: the Argentina peso devaluated and through the “corralito” measure, created by Minister of Economy Domingo Cavallo, people were not able to access their bank accounts. The country was left with economic downturn, inflation, social unrest, lack of institutional credibility, poverty, and unemployment.

Portrait of a woman

Néstor Kirchner, who became president in 2003, is a disciple of the dependency theory school, maintaining a neo-developmentalist ideology: adistrust in international organizations such as the International Monetary Fund (IMF) and a support of the country’s fiscal autonomy, particularly based on the advance of state-planned industrialization. Because of his policies and when his wife, Cristina Fernández, ran for president, the comparison to the political couple of Perón and “Evita” became even stronger.

In 2009, Cristina, or “Queen Cristina,” as Argentines call her, was chosen as one of the most powerful women in the world by Forbes magazine, and the Argentine’s rural as well as urban based oligarchy has considered her a threat since her inauguration. Fernández first became involved with the Partido Justicialista (founded by Juan Domingo Perón) while studying at university. In 1975, Fernández married Néstor Kirchner, who would be president of Argentina from 2003 to 2007. Fernández went on to become a senator for the province of Santa Cruz and then for Buenos Aires Province in 2005. She was the first elected female president of Argentina—winning with 45.3% of the vote in 2007. In general, Cristina has received support from the unions and the rural poor.

Continuing her husband’s project, Fernández sought to nationalize all of the formerly state-owned business and industries, which had been the pride of Argentina before they were privatized /(in a corruption-tainted process) through the ten year (1989 to 1999) government of ex-president Carlos Menem. She bought back Aerolíneas Argentinas (Argentinean Airlines), the retirement funds that had been privatized, and the oil company YPF (Yacimientos Petrolíferos Fiscales). With the plan “Patria Grande,” she gave citizenship to the large number of indocumentados, immigrants from neighboring countries who go to Argentina to work illegally in professions such as live-in maids and construction workers. She also continued the trials against the military for crimes against humanity committed during the 1976-1983 dictatorship.

By the time Fernández became president in 2007, a “dissident Peronist,” or right wing faction had emerged within the Partido Justicialista. This dissident movement is embodied by businessman-turned politician Mauricio Macri, executive director of Argentina’s most famous soccer team, Boca Juniors, leader of the PRO party and the mayor of Buenos Aires. Another important opponent is Elisa “Lilita” Carrió, from the Civic Coalition, which is commonly supported by the middle classes.

The Old Oligarchy

In March 2008, a major event brought to light the social cleavage in Argentine society. The Minister of Ecomonics, Martín Lousteau, announced the 125 Resolution: the government would increase the taxes on agricultural exports, mainly soybeans, sunflower, wheat and corn. For the last decade, Argentina has been extensively growing transgenic soybeans because of their high profit rate in the international market, thus becoming the third biggest producer in the world and the first of soybean oil. The focus on soybean production in the country has produced desertification, deforestation, environmental threats due to the danger of using transgenic products, and a crisis in the meat and milk industries. In Argentina, 3.7% of producers own 40% of the land. When the 125 Resolution was announced, the Argentine oligarchy replied with a 129- day lock-out (when employers prevent employees from working) by farming associations. In response to this, Cristina made a memorable speech in which she claimed that people in Argentina need to stop thinking of themselves as owners of a country, but as part of the country. Finally, on June 17th, 2008, President Fernández proposed that Congress should vote on the 125 Resolution. The vote was a tie until the vice-president, Julio Cobos, voted against it. This caused a significant internal conflict in the Kirchner’s Front for Victory coalition and revealed a Congress that did not closely follow the president’s political agenda.

Another major controversy occurred in August 2009, when Fernández’s proposed law for media ownership was extremely criticized by the powerful Grupo Clarín, a business group which controls most of Argentina’s media. Up until this point, media ownership was still ruled by laws instituted during the dictatorship. Ever since the beginning of her government, Fernández has had a tense relationship with Clarín. Their relationship worsened after Fernández forced Ernestina Herrera de Noble, director of Clarín and largest shareholder of the media conglomerate, to submit a DNA sample in order to prove that the children that she adopted during the dictatorship were not stolen from their parents.

The most recent barrier to Fernández’s agenda appeared this year when she created the “Bicentennial Fund” with money from the Argentinean Central Bank. The fund was created for domestic financing of public spending in order to pay interest on the external debt and deal with the effects of the 2008 global financial crisis. Martín Redrado, president of the Central Bank, was dismissed by presidential decree when he opposed the Bicentennial Fund for using foreign exchange reserves. The opposition claimed that the Central Bank is autarkic and that the reserves are not supposed to be used for commercial purposes, but to keep the value of currency. Cristina explained that there is virtually no country in the world with an external debt that is not following these policies. Still,the plan was denied by Congress.

Regarding foreign policy, Fernández has struck an anti-imperialist note and has kept a close relationship with most Latin American presidents, especially Hugo Chávez. She just inaugurated the “Latin American Patriots” wing in the Casa Rosada, while delivering a speech calling for the solidarity among Latin American countries. Her government’s relationship with the United States grew stronger with Secretary of State Hillary Clinton’s visit in March of this year, when Clinton congratulated the president for the measures taken to reduce the external debt. On February 3rd of this year, the Argentina Foreign Service claimed that Great Britain was not entitled to extract oil from the Falklands. Fernández managed to get support from Hillary Clinton and thirty-two Latin American countries in her campaign against the UK by arguing that its presence in the Falklands Islands represents a neo-colonial enclave in the 21st century.

Upcoming presidential elections

According to Deputy Dante Gullo, Argentina is just now recovering from the Washington Consensus, which left the country an “orphan.” Still, the Kirchner couple is finding it hard to get the support of the middle classes. After all of Fernández’s obstructed attempts to propel a political agenda, one wonders whether Néstor Kirchner has a reasonable shot at winning the presidential elections in October 2011. His image suffered a big blow in the June 2009 legislative elections when he lost the position of National Deputy for the Province of Buenos Aires to Union PRO’s Francisco De Narváez. However, after the bicentennial celebrations, the Partido Justicialista claims that Néstor Kirchner is the best candidate for president. He has also improved his image by becoming the Secretary General of UNASUR, the newly founded Latin American economic trade bloc.

With the World Cup just starting, political parties are going through their preliminary round to choose their presidential candidate, aware of the fact that the world’s attention will be consumed by soccer for a whole month. Taking advantage of the Bicentennial celebrations for political campaigning, Cristina made sure to wear a hat that read “President Kirchner 2011” for the cameras.

Joining the leftist wind that is blowing through many other countries in Latin America, the Kirchners represent a substantial change in Argentine politics. The question is whether the couple’s days are counted, or whether they will manage to tame their fierce opposition to do her bidding.

10 thoughts on “Two hundred years of Argentina, seven years of Kirchnerism

  • June 12, 2010 at 3:50 am
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    Good. And, as I now prove, the title remains, President Manuel Zelaya. The junta, golpistas, criminalized Manual Zelaya and blocked President Zelaya from transferring power in normal democratic succession. Thus, Manual Zelaya remains President Zelaya, until there is a verified presidential election that includes a referendum on deciding to convene a constitutional convention which recognizes justice for all the people, justice for the future, and justice with nature.

    I was once part of two million people celebrating independence, in Nicaragua. President Kirchner spoke to six million and evidently connected on a human level; she has shed a tear with them, now she cannot avoid what the indigenous people know and feel. Argentina alone is powerful, South America is hugely so. This growing phenomena, linked with Central America and the Caribbean, is a rare gestalt power balancing shift. In a world of easy resources already gone, much of this huge area is wary of the United States airbases in Colombia. Many of the individual countries mentioned are already coordinating through Mercosur, this economic union also provides opportunity and reason to discuss unified defense of their resources from the United States. Times have changed for the United States, and its junior partner in piracy, Canada.

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    • June 14, 2010 at 3:57 pm
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      Thanks for the insight. I completely agree.

      Reply
  • June 16, 2010 at 1:09 pm
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    I was disappointed to read Azul Mertnoff's claim that "neoliberalism" caused the economic problems that ended the decade of the 1990s for Argentina. It is possible to have such crashes under any stripe of regime, as Venezuela is showing now. The real engine of Argentina's crisis of that day can be appreciated by reading, say, Carmen Reinhart and Kenneth Rogoff's NBER paper "Debt Intolerance," and their book This Time is Different. I don't think that anybody could reasonably claim that these documents have any poltical agenda. They are solely about the practicallities of life in debt when you have a long record of default. Agentina's economic history and circumstances have meant that it does not have the fiscal options that the United States or Germany or Japan enjoy and may never have. Argentina's crisis of 10 years ago and Venzuela's today are about the balance sheet, not the ideology. I invite anyone in these dialogues to show cases where a financial crisis was worth the debts that were run up in getting into it.

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    • June 16, 2010 at 3:41 pm
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      Reinhart and Rogoff's "This Time is Different" does point out the importance of debt in contributing to financial crises. However, to my mind, their book ultimately failed to draw a convincing causal relation between debt and crisis. Yes, debt and crisis tend to occur together: but is it debt that truly "causes" a crisis? In Argentina, debt accumulated from military dictatorships likely played a role in the crisis but was probably not the sole cause.

      Also, in Venezuela, issues are not so much debt-related as caused by other fundamental economic problems; Venezuela has worked to reduce its debt. Of course, Reinhart and Rogoff might point off that Venezuela has low debt tolerance because of its lack of capital flow, and thus even a lowered debt level is too high. However, I would still maintain that the true driver of Venezuela's problems is not debt but ill-conceived policies.

      Thanks for the comment!

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    • June 17, 2010 at 2:13 pm
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      My questions is, if it is external debt that caused the Argentine crisis of 2001, can't we say that this is a direct consequence of neoliberal policies? The "practicalities of life" are pushed by a political agenda by a certain social class in a country, wouldn't you agree? I mean it is the ideology of an economic model that makes a country end up with a particular balance sheet.

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  • June 16, 2010 at 10:41 pm
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    excellent article!!!
    I enjoyed reading such an interesting and well informed account of Argentina 's political history. About William's comment, I agree with Mertnoff, the neoliberal policies led to the 2001 crisis.

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  • June 17, 2010 at 2:42 pm
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    muy buen articulo , la verdad que coincido en todo lo que decis y es importante reflexionar sobre eso!

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  • June 22, 2010 at 9:44 pm
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    Brilliant article that opens up so many questions. It is not easy to sum up 200 hundred years of history pointing out the main turning points in such conflictive events and Mertnoff does it with such clarity. Gruben, Agentina's economic history and circumstances have meant a lot more than what you have mentioned.

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  • July 13, 2010 at 11:38 am
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    Clear, succint and genuinely fascinating, Azul demonstrates a talent for summarising both political and economic changes, and how they are interlinked, tracing such changes through the past couple of centuries in Argentina.

    Reply

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