democraciaAbierta

Democracy in Argentina: Does Macri mean less State?

The change that Macri is bringing to Argentina is raising multiple issues among fears of a comeback of policies that utterly failed in the country during the neoliberal 90’s. Español. 

Cecilia Milesi
28 December 2015
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Mauricio Macri is sworn in in Buenos Aires, December 10 2015. Magoli Inglesias/Flickr. some rights reserved

On December 10, 2015, Argentina woke up to witness the inauguration of the new president, democratically elected by each and every Argentine, Mauricio Macri. The night before, the former president Cristina Fernandez de Kirchner said goodbye to a Plaza de Mayo full of energized and grateful citizens. It was a dramatic transfer of power, filled with the symbolic and real tension which will probably prevail over the next few years in Argentina.

At this important historical moment for the country and the region, Argentines only seem to agree on a common joy: we celebrate the peaceful transfer of power from one elected president to another, having courageously overcome the dramatic consequences of dictatorships, armed violence and various political and economic crises. Beyond the difficulties, Argentina remains firm in its process of democratic institution-building and is positioned internationally, both politically and economically, in a worrying and increasingly violent global environment.

Perhaps, this is the only joy that unites Argentines. In this last presidential election -in which the government candidate (Daniel Scioli) lost for a margin of only 2% against the opposition candidate and future president (Mauricio Macri) - two visions and models of development and political construction were discussed and contrasted. Argentines chose "change". “Change” and “joy” were the two words cleverly chosen by marketing advisors of the winning political coalition and tirelessly repeated by the elected coalition as an almost new age and management mantra. We are preparing with anticipation to find out what these words means in practice and what it could be achieved by a business and football man with some years of experience governing the City of Buenos Aires.

But, ¿which are the main economic and socio-political dichotomies the country will face. The results and impact of the decisions to be made will only become clear within a few months and years.

A shift to the right

Analysts coincide in describing the victory of the coalition of opposition parties "Cambiemos" ("Let's Change") as a sure shift to the "right". That is, the possible abandonment and revision of the "left-wing" and progressive policies implemented by Néstor and Cristina Kirchner, who ruled the country for the last 12 years. This political shift will bring with it potential economic and political transformations as well as changes in style, and will undoubtedly have a high impact on regional Latin American and international politics.

Economically, the government of Mauricio Macri announced the return to certain neoliberal policies which were unsuccessfully tested in the past, both in Argentina and in many countries of the Global South, including Asia, Africa and the Middle East. In short, this would mean a return to open markets, an alignment with the precepts of the United States and the main private and public financial institutions controlled by this country (International Monetary Fund, World Bank, private banks, etc.), and possible control of expenditure through budget cuts in key areas that benefit the working class and the more marginalized sectors (such as state subsidies to public transport).

The emphasis on efficiency and effectiveness prevails over other principles such as sovereignty and self-determination, which were upheld over the last decade. Thus, for example, it is noteworthy that the new Economy Minister –Adolfo Prat Gay- was one of the top managers of JP Morgan, founded an investment fund being criticized for transferring money to off-shore fiscal paradises and distanced himself from Néstor Kirchner due to their differing views on how to manage the Central Bank reserves in order to coordinate macroeconomic processes. One of the first actions carried out by Prat Gay was to call his US counterpart and provide details on the financial plan to be implemented as well as to start urgent negotiations to obtain more international loans -with high interest rates-, move forward in reaching an agreement to pay the debt claimed by the so-called "vulture funds" and start a conversation with the large development banks.

During the first days in government, Macri signed a plethora of criticized executive decrees and orders –this means, without Parliament discussion- which fundamentally change legislation and measures discussed and approved during the former government and, clearly, signing that the country is moving towards the “neoliberal right”. The key issue is how to increase dollar reserves in order to support the national currency at the cost of a potential increase in foreign debt, while the price of the local currency is devalued benefiting the agro-exporting wealthy sector and a few concentrated international and national companies operating in Argentina. In the past, many of these measures concluded with the infamous crisis including the latest of 2001 characterized the debt default and massive citizens' mobilization.

This plan is an important shift in relation to certain measures taken by the Kirchners in recent years, which have also had mixed results. Until a few days ago, Argentina maintained a policy of border control to correct trade imbalances and guarantee important tax revenue from the previously mentioned exporting sectors. The landed elite, in alliance with the large media companies owned by some of the most powerful families in the country, has strongly opposed the government. There were policies aimed at controlling the value of the currency and of prices which have exasperated those who fear that the country may become a southern version of Venezuela or Cuba. Purchasing power shrinks with an annual inflation of over 40% partially offset by institutionalized wage bargaining processes.

More or less State

In this context of wrestling for the control and distribution of resources, the Federal Government has expanded its role and its reach, especially, through broad social policies that benefit the most marginalized sectors, for example the universal child allowance, pensions for housewives or the aforementioned public-transport subsidies as well as the nationalization of companies -such as oil and transport-, which had been privatized during the neoliberal 90's. Economic policy provided stimulus for consumption and production for the growing domestic market, arguing that higher inflation is a positive indicator. However inflation and currency controls, coupled with endemic corruption linked to the lack of efficiency and abuse of power, have turned the exponentially increasing public spending into a burden for the majority of Argentines once again.

The key issue in this economic back-and-forth between the "right" and the "left" is, ultimately, how wealth is generated and distributed, and therefore, how poverty and inequality are overcome. Argentina, like many other countries in the world, is today once again caught in the dichotomy between "market" vs. "state". At the same time, we seem to be stuck in the second great dichotomy which is "sovereignty" vs. "integration (to the Global North)". Macri, in any case, won by assuring that he will not destroy the State. The role of the State is no longer challenged the way it was in the 90's. The new president says that he will continue to "take care" of Argentines. “Taking care” might replace the ideas of “expansion of rights and development with social inclusion” which prevailed in the past decade.

In the coming months, we will see whether the new government manages to find that sought-after balance that will not leave the citizens subject to the flexibilization and opening of the markets required by large businesses to maximize their profits. It is worth underlying something that reflects the complexity of this balance: the new government has promised not to re-privatize the recently nationalized oil company (YPF), therefore securing the management of a key natural resource directly associated with the possibility that Argentina may continue to grow with relative autonomy. However, the new Energy and Mining Ministry will be in the hands of the former president of Shell Argentina, and one of the Secretariats will be led by the former CEO of Pan American Energy.

At the same time, early visits to China, USA and Brazil are on the cards - but not to Russia. Similarly, the new administration claims that it will not backtrack in regards to policies that provide monthly allowances to millions of Argentine mothers and pensioners, who managed to have their social and economic rights expanded. However, if the aim is to achieve fiscal balance in a context in which taxes to the concentrated sectors are removed or decreased, it means this balance will be probably achieved by making budget cuts in social areas and cutting jobs in the public sector. The new government has mentioned it might not continue supporting annual salary negotiations with main trade unions (paritarias) and that the workers will need to directly negotiate with their companies and considering productivity levels. Therefore, this will be the end of the role of the State as mediator and negotiator in the process of labor and collective negotiations towards salary fairness. If this happens, this will be neo-liberalism at its best.

Human Rights’ worries

Politically, Argentines are facing a debate regarding how Argentina should continue –or not– with its Human Rights policies. During the governments of Néstor and Cristina Kirchner, unprecedented progress was made in the investigation and conviction of military officers involved in crimes against humanity committed during the last military dictatorship. The current policy on this area upholds the values of truth, memory and justice and leaves aside years of amnesty and denial of the dictatorial past. In opposition to this, Mauricio Macri did not hesitate to publicly state that what he called “the Human Rights scam" would end with his administration.

An example of this mindset is that only one day after the victory of "Cambiemos", one of the main national newspapers that support the future president –linked to the Mitre family, part of the elite allied to the military power in the past –published an editorial calling for the end of the trials. Resistance was swift. The newspaper employees organized an internal protest to make clear that justice is irreversible in our country. If progress on the trials for crimes against humanity is not halted, we may even see the continuation of the trials that are currently being initiated against several private companies that contributed to the abductions, disappearances and political persecution during the dictatorship. Many of these companies are close to the Macri family and members of his team.

Ultimately, the struggle surrounding historic revisionism in Argentina and Latin America in order to build a future of Human Rights for all will be key to the political dispute. In terms of Human Rights, the last decade also saw some progress on issues related to the right to abortion, assisted reproduction, equal marriage, gender equality, among others. In contrast, the new president has shown close ties to the most conservative groups within the Catholic Church and has said that his values ​​will not be altered by the social progress achieved, in many cases, by organized groups of victims and citizens working in alliance with the Kirchner´s government. Pope Francis is yet to call Macri to congratulate him, and is assessing how to establish a relationship with a political leader who, clearly, is on the other side of the political spectrum.

One of the most criticized first decisions of the new government –also potentially illegal and illegitimate while never seen in Argentina's democratic history –, was the appointment by presidential decree of two judges in the Supreme Court of Justice. The appointment has now being delayed after strong opposition by the public and also most renowned argentine constitutionalists. This is a clear demonstration of how the new government is ready to leave aside the euphemisms in relation to “dialogue” and move fast in order to gain control also of the higher powers of justice. A key step in order to ensure there is a general framework ready to defend socio-political changes.

Shifting geopolitical blocs in the region

These debates and possible political and economic shifts have and will have a broad impact at the Latin American level: the Kirchner’s governments built a strong partnership with countries in the region. We were all witnesses and builders of the "Patria Grande" (a united Latin America). For many, Macri's victory is a relief, as it signals the weakening of the "Chavista bloc" that opposes the implementation of neoliberal policies. Macri showed what it will display aggressive diplomacy against Venezuela during his intervention at Southern Common Market (MERCOSUR) meeting this week. Macri announced and showed his intention to distance the country from Venezuela, and justifies his position on an alleged "progress in terms of Human Rights" while it looks at the Pacific Alliance, which is closer to the United States and to proposals to expand free trade agreements with the European Union and the USA.

Regional organizations and blocs that were created and nurtured in order to discuss creative ways to generate power and alternatives in Latin America and the world are might be discredited by the new administration: CELAC (Community of Latin American and Caribbean States) and UNASUR (Union of South American Nations) were not mentioned in the first public interviews provided by the appointed Ministry of Foreign Affairs. Africa, BRICS and South-South Cooperation were also not mentioned in her first interviews to the media. In fact, the new Economy Minister has already announced that Argentina will join the OECD (Organization for Economic Cooperation and Development –mainly controlled by Northern countries and some allies), "because it shows that we are a serious country".

With Dilma in Brazil potentially facing impeachment, and Maduro's defeat in the legislative elections in Venezuela, as well as Cuba opening up to the world, Evo Morales in Bolivia and Rafael Correa in Ecuador remain pretty much the only references of this Latin America which courageously enriched itself with new ideas, innovations, and the creation of political forces linked to the progressive left that was relegated during the neoliberal decade and the dictatorial times.

Lessons from the past to be relearned

Beyond these dichotomies and the challenge of finding a balance with upcoming "change", it is interesting to share a reflection: Argentines have shown that –perhaps like all of the world's citizens– they vote with their pockets. Individual cost-benefit analysis prevailed over principles and ideological convictions. Argentines also seem to vote based on their "feelings" rather than guided by the careful analysis of public policies and their results in the long-term. If there is money at home, go ahead. If there is not that much money, then let the other one win. If there is a feeling of hope, go ahead. If there is fatigue, then let the other one come in.

Argentina appears to have reached a new edge in history: progressive sectors were not effective enough in ensuring the defense of medium and long-term economic wellbeing by the majority of voters. The verbose argument and the discourse that is not backed by every-day, concrete results for families have resulted in this political reshuffle.

Politics is the art of building a better life for all based on new ideas. A small sector of Argentines thinks that the ideas were not good enough and that a better life is possible by changing governments. Argentines seem to think that change is good, despite certain lessons from the past. Time will provide answers. And we will learn (again).

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