Argentina 11 Nov 2019

Argentina changes political direction

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Four years after Mauricio Macri took office, Argentina has elected Alberto Fernandez as its next president. Fernandez is backed by Cristina Kirchner, who returned to the political area after ending her presidential term in 2015.

Frente de Todos received 48.10 percent of the vote, beating the Juntos por el Cambio (Together for Change) candidate, who obtained only 40.37 percent. However, the difference was expected to be larger. The province of Buenos Aires was a major electoral battleground, containing 38 percent of the electorate.

Main political actors

Alberto Fernández- Presidente

He served as cabinet chief between 2003 and 2008, during Nestor Kirchner’s and Cristina Fernandez de Kirchner’s administrations. He resigned when Cristina Kirchner radicalized her position regarding the agricultural sector and media.

Cristina Fernández de Kirchner- Vicepresidenta

A two-time president of Argentina, Cristina Kirchner served from 2007 to 2015. During her administration, she followed the policies introduced during her husband Nestor Kirchner’s administration. She has extensive experience with the theory and practice of wielding legislative power and has served as a deputy and senator on multiple occasions. Today, she is a national senator for the province of Buenos Aires.

Priorities for the next government

  • Inflation. Fernendez pointed out that a large part of inflation is due to prices being handled by a few companies, so he proposes greater State regulation to avoid unilateral retail price policy.
  • Unemployment and poverty. According to official data from September 2019, poverty rose to 35.4 percent, representing 15.9 million Argentines. Fernandez has proposed a social contract between businesspeople, workers and the State. During his time as a political figure and candidate, he already held meetings with trade union leaders and trade unionists to foster dialogue between these groups.
  • Debt. Fernandez has refuted any possibility of defaulting on this debt, pledging to comply with the obligations Macri’s government entered accepted. However, he has not ruled out rescheduling payment due dates for IMF commitments (including interests).
  • Consumption. Given the decreased purchasing power, currency devaluation, accelerated inflation, unemployment and the steep decline in consumption, Fernandez proposes deepening the social contract between trade unionists and employers. Among the series of measures he has announced, the comprehensive “Argentina without Hunger” program and Consumer Goods Act stand out. These measures are designed to regulate the percentage of physical space well-established brands may use, thus easing small and medium regional companies’ entry into the commercialization chain.

“Fernandez has emphasized that his government will consist of a president and 24 governors”

Public administration

Fernandez is expected to bring ministries together, do away with the flagship secretariats of Macri’s government (for example, Modernization) and create new ministries as-needed. Moreover, throughout the campaign, Fernandez has emphasized that his government will consist of a president and 24 governors, the idea being that federalism is key to its government proposal.

Foreign policy

Regarding foreign policy, Macri tended to focus on the United States and European Union. This international context proved unfavorable, however, since Donald Trump led the United States engaged in trade protectionism, and the United Kingdom voted to leave the European Union.

Given this new context, Fernandez plans to take the following measures:

  • Approach new/old trading partners for Argentina. Emphasizing the need to restart UNASUR (Union of South American Nations) and improve the institutionalization of existing organizations so they do not depend on presidential leadership.
  • European Union Agreement and Mercosur. Fernández has questioned the Agreement’s continuity, saying there are European countries that have rejected it. Moreover, he is particularly focused on Argentina preserving its national interests.
  • Malvinas. Frente de Todos believes Macri’s administration has not made any progress in the sovereignty dispute over the South Atlantic archipelago. The Foradori-Duncan Agreement, signed in 2016, has been strongly criticized. Fernandez’s proposal involves once again taking a confrontational position, similar to those taken during Nestor’s and Cristina Kirchner’s administrations.

“The new president must have support that will allow him to govern during the first 100 days of his administration”

What factors will influence alberto fernandez government?

Due to the economic crisis, debt maturities, rising poverty and unemployment and the occupation of public spaces by social movements, the new president must have support that will allow him to govern during the first 100 days of his administration. Among the main factors, the following stand out:

  • The group of governors. Of the total number of 24 governors, three belong to provincial coalitions (Rio Negro, Neuquen and Misiones), four to coalitions that make up Juntos por el Cambio (Autonomous City of Buenos Aires, Corrientes, Mendoza and Jujuy) and the rest are either part of the Justicialist Party or are Peronist allies.
  • The National Congress. This legislative power consists of two chambers: The Chamber of Deputies and the Senate. Fernandez will have the required majority in the Senate (39 of 72 senators) and will be close to a quorum in the Chamber of Deputies (124 of 257 deputies), although he will need to negotiate with other parties.
  • Trade unions. In Argentina, there is a wide array of trade union movements, many of which have historical differences and rivalries. Fernandez promoted the reconciliation between the General Confederation of Labor (CGT) and Argentina Workers’ Central Union (CTA), which had distanced themselves in the 90’s.
  • Social movements. Their participants are primarily social plan beneficiaries and workers in the gig economy who want their labor and social conditions dictated by law.

Conclusions

  • First and foremost, although Fernandez has been proposed as the head of the presidential ticket by the well-known ex-president, Alberto Fernandez is not Cristina Kirchner. He has sought to differentiate himself by criticizing some of Cristina Kirchner’s policies during her last presidency.
  • Fernandez was not given a blank check, he could not rise above 48 percent, so he will have to negotiate his parliamentary agenda in both Chambers.
  • Fernandez is expected to lead a less interventionist government than Cristina Kirchner did. Its purpose will be to reactivate the internal economy through consumption, but it will implement state measures for market regulation.
Mariano Vila
Managing Director at LLYC in Argentina
He managed the area of Public Affairs at Edelman Argentina, where he worked with clients from diverse industries in issues regarding public-private interactions. He is a specialized political analyst and crisis management, he has great experience in the management of interests, and in 2016 he joined LLYC as a Senior Manager of Public Affairs. After, he took the role of Operations Manager for the firm in Argentina, thus also becoming responsible for the area of Corporate Leadership and Positioning. He undertook a great deal of his career within the national public administration as an advisor for the Federal Tourism Council from the Ministry of Tourism. He was then responsible for developing how to promote Argentina abroad, with responsibilities over the so-called Distant Markets and of coordinating Argentina’s inter-ministerial agenda as well as that of the South Cone and Andean regions, in order to promote those countries in said markets.
Juan Ignacio Di Meglio
Public Affairs Manager at LLYC in Argentina
Before joining LLYC in 2019, Juan was the Digital Government Communications coordinator for the National Ministry of Modernization. He was also part of the Public Affairs team for Burson-Marsteller Argentina. He has a degree in Public Relations from UCALP and a master's in Political Communications from Austral.
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