On Sunday Oct. 25, Argentina held a presidential election. Although, as expected, the candidate of the ruling left-wing Victory Front got a plurality of the vote, it was considerably less than had been predicted by pre-election opinion polls, and a runoff will be necessary on Nov. 22.
The Victory Front’s candidate, Daniel Scioli, is the governor of Buenos Aires state. His main opponent in the runoff will be right wing businessman Mauricio Macri, of the Republican Proposal (PRO) party which is part of the “Cambiemos” (“Let’s Change”) electoral bloc.
Macri, the mayor of Buenos Aires, the nation’s capital, got 34.5 percent of the vote, while Scioli, who is supported by outgoing president Cristina Fernandez de Kirchner, got 36.9 percent. Another candidate, Sergio Massa of the United for a New Alternative party (UNA) got 21 percent of the vote.
These results were disappointing for the ruling left-wing government. According to Argentine law, a runoff would not have been necessary had Scioli achieved 45 percent of the vote, or 40 percent and a 10 point advantage over the next highest polling candidate. Polls had suggested that the latter might indeed happen.
Argentina is part of the “Bolivarian pink tide” of countries with left-wing or left-center governments. Public opinion polls show that the majority of Argentines are in favor of the major policy initiatives of President Kirchner and her husband and predecessor, Nestor Kirchner.
Both Scioli and the Kirchners are products of the splits in the Justicialist party which had been founded by President Juan Domingo Peron and his wife Eva (“Evita”) in 1947. During the 1970s, the Justicialist party became divided along left-right lines which continue to this day.
Scioli, like the Kirchners, is a left wing Justicialist, while Massa is also a Justicialist but from a more right wing branch close to big agricultural interests. Macri comes out of anti-Peronist traditions that are strongest in the city of Buenos Aires and connected to transnational capital as well as Argentina’s own elites.
The division between Buenos Aires and the rest of the country is ancient and legendary in Argentina. In this election, most of Argentina’s other provinces gave majorities to Scioli and the Victory Front, but this was offset by the big vote for Macri in the capital and environs.
Argentina’s current problems include a fairly high level of inflation, and ongoing friction between the government and foreign creditors, a minority of whom are not satisfied with the arrangement that the two Kirchners reached with the rest of the creditors after Argentina defaulted in 2002. Two of these creditors, characterized by the Argentine government as “vulture funds”, have been especially problematic.
One is Elliot Management, headed by Paul Singer, a major mover and shaker in the Republican Party in the United States. The other hedge fund which has not signed onto the agreement the Kirchners worked out with Argentina’s creditors is the Aurelius group.
These funds are not original holders of Argentine bonds; rather when Argentina went bust in 2001, Elliot and Aurelius bought the bonds from the original investors for pennies on the dollar. When Nestor Kirchner was elected president in 2003, he began a slow process of renegotiating Argentina’s foreign debt; under his presidency and that of Cristina Kirchner satisfactory arrangements were reached with over 90 percent of the nation’s creditors.
But with the help of a U.S. Judge, Elliot especially has harassed Argentina with litigation, threatening to seize Argentine government assets including such things as the President’s official airplane and, on one occasion, an Argentine Navy training ship. Argentina has received massive support, especially from other relatively poor countries, in resisting these efforts.
Argentina suffered under a brutal U.S. supported military dictatorship, euphemistically called the “National Reorganization Process” from 1976 to 1983. During this regime, upwards of 30,000 political opponents were murdered and thousands more tortured and imprisoned in what was billed as a sacred war against communism.
There being no way to hold the generals and admirals who were running the country to account without risking one’s own life, this became a time of massive political corruption also. The military rulers ran the country’s economy deeply into the red by military expenditures, by a very ill advised war with Britain over the Malvinas, or Falkland Islands in 1982, and by corruption.
According to Argentina’s present finance minister, Axel Kicilloff, much of the country’s excessive indebtedness dates from these activities of the dictatorship. Governments that immediately followed the fall of the dictatorship also contributed to the problem by their own corrupt practices and by swallowing the neo-liberal policies being promoted by the International Monetary Fund, the World Bank and the big developed capitalist powers at the time.
Thus much of this debt could be considered “odious” and therefore not enforceable, under some interpretations of international law. The concept of “odious debt” has also been raised in the context of the Greek and Puerto Rican financial crises now raging.
Why Scioli did so poorly, even losing in Buenos Aires where he was the governor, is not clear. Some suggest that President Kirchner did not provide enthusiastic enough support for his candidacy; others that he was not a popular governor in Buenos Aires Province.
But more important is what is going to happen between now and the runoff election. Last week, Scioli announced that he proposes raising pensions for retired people, important in a country undergoing inflation. He will also cut export taxes on agricultural products, a source of complaint from Massa’s support base in that sector.
Massa has endorsed Macri, however.
Photo: Daniel Scioli, governor of Buenos Aires. | Natacha Pisarenko/AP