“In 2014, the currency devaluation and inflationary spike dented the president’s popularity and eroded perceptions of her government’s economic competence.” Curtains for Argentina’s Kirchner Era M. VICTORIA MURILLO ristina Fernández de Kirchner, the third please voters. Deteriorating economic conditions Peronist to be elected president of Argen- will make it harder for any successor to Fernández Ctina since the democratic transition of de Kirchner to adopt left-wing policies, even if he 1983, is approaching the end of her second term. or she wanted to. Her presidency followed that of her husband Nés- The surprise of this final act is that she has man- tor Kirchner (2003–7). After a dozen years with aged to keep the political initiative, moving to reg- one Kirchner or the other at the helm, Argentina ulate the oil sector, reform telecommunications, is facing a presidential election in October with and revise the civil and criminal codes. A lame- considerably more uncertainty than the past two, duck president in the last year of her mandate which Fernández de Kirchner won in overwhelm- could easily have lost that capacity for action, es- ing landslides. pecially in the context of an economic slowdown, There is no clear front-runner this time. How- increasing unemployment, and high inflation. Ad- ever, any of the three candidates with a higher ditionally, she lacks a loyal successor—a candidate probability of winning is likely to steer the next with a good chance of winning the next election administration toward more moderate economic and sustaining her brand of politics, known as policies, including some kind of fiscal adjustment, Kirchnerism, into the future. and a stronger emphasis on controlling crime. The Kirchners have often been classified as part of a REMAKING PERONISM shift to the left in Latin America, though the ap- Néstor Kirchner was inaugurated in 2003, when plication of that ideological category to them has Argentina was starting to emerge from its deepest been questioned, given their own pragmatism and economic crisis since the Great Depression. Dur- that of their party, the Peronist party. Yet there is ing their dozen years in power, the Kirchners built no doubt that none of the three most likely suc- a coalition with dramatic actions that reshaped the cessors to Fernández de Kirchner can be identified political scene. In economic policy, these included with the left. debt restructuring, the expansion of redistributive The challenges ahead are difficult. The com- social policies (such as noncontributory pensions modity boom that allowed the Kirchners to expand and cash transfers for children whose parents do public spending and redistribute through social not have formal employment), and the national- policy seems to be reaching an end. If resources ization of the country’s largest oil company, YPF, dwindle, the legacy of a fiscal deficit and a two- which was expropriated from the Spanish com- tier exchange rate will most likely bring the next pany Repsol. The Kirchners also oversaw the administration toward retrenchment, especially prosecution of those responsible for human rights given the failure of price controls to restrain infla- violations that occurred during the military dic- tion. Thus, the next president is likely to face more tatorship, procedural changes for Supreme Court limited room for action in economic policy mak- appointments, and the expansion of rights for citi- ing, and will have a more difficult time trying to zens of different sexual orientations, including gay marriage. A major change to media laws expanded M. VICTORIA MURILLO is a professor of political science public access but also introduced new regulations and international affairs at Columbia University. She is the against concentrated holdings, particularly affect- author, most recently, of Political Competition, Partisanship, and Policymaking in Latin America (Cambridge University ing a major media conglomerate that opposed Press, 2009). Fernández de Kirchner’s administration. 56 Curtains for Argentina’s Kirchner Era • 57 The Kirchners’ bold policy initiatives were ac- 54 percent of the vote. Argentina had experienced companied by similarly striking rhetoric and sym- high levels of economic growth in the seven years bolism: the national bicentenary celebrations, free before that election, with the exception of 2009, television access for all soccer matches including when it was hit by the global recession. Growth the World Cup, the first Argentine satellite sent to produced higher fiscal revenue, which allowed for space, and more. They inspired a renewed belief in policies of social redistribution that reduced pov- the capacity of politics to change the status quo after erty and inequality while fostering a consumption Argentineans had taken to the streets in 2001 and boom that benefited large swaths of the popula- 2002 demanding that politicians resign en masse tion. Although the Kirchners’ support had eroded amid economic turmoil. Moreover, the government in the 2009 midterm elections due to a decline in has been responsive to public opinion shifts even economic performance and a long conflict with while pursuing its radical policy agenda. For in- agricultural producers over taxation levels, her re- stance, as concern over crime increased in 2014, election in 2011 was overwhelming: The runner- the government sent a bill for a new criminal code up, Socialist Hermes Binner, received only 17 per- to Congress. It was announced on national televi- cent of the vote. sion that the measure would require the expulsion By 2014, though, spotty clouds marred the sky. of foreigners caught committing crimes, reversing The economy had been slowing down in the past a previously liberal immigration policy. two years, but growth in 2014 turned negative, The branding of Kirchnerism is not unique in and at the end of the year even the official statis- Argentina, whose politics has a tradition of per- tics (known for being unreliable) announced a de- sonal brands. Peronism has long survived Juan cline in economic activity and a rise in unemploy- Domingo Perón, who was ousted in 1955 by a mil- ment. The fiscal accounts were also in the red. The itary coup and came back surplus achieved during the from exile to serve again as prior two administrations president for less than a year The question of succession has had turned into a deficit by before his death in 1974. Fernández de Kirchner’s sec- The party has adopted dif- become acute for the survival of ond term. The high cost of ferent names over the years, Kirchnerism as a political brand. energy and transportation but the Peronist brand is subsidies, which the gov- the most valuable one. Per- ernment had unsuccessfully onism rebranded itself in the 1990s when it shift- tried to reduce by cutting some subsidies for rich- ed to the right under Menemism, led by President er users at the beginning of her second adminis- Carlos S. Menem, and then again in the new mil- tration, was a leading culprit in this development. lennium when it shifted back to the left under the Meanwhile, the continuous improvement in Kirchners. Many of the same Peronist politicians Argentina’s terms of trade since 2003 seems to be played roles in both acts, even defending contra- over, putting more pressure on economic policy dictory policies. making and limiting any future administration’s It is difficult to believe that Kirchnerism has re- capacity for further redistribution. Commodity placed Peronism as the valuable brand. It seems prices started to decline in 2014; a record US soy- more likely that if another Peronist is elected as bean harvest, along with a slowdown of the Chi- president, a new Peronist coalition is likely to be nese economy, brought down the world soybean formed, and many Kirchnerist politicians will join price from $550 to $350 a ton between March and it. Given those expectations and the fact that elec- October 2014. Soybeans are the main Argentine toral results in the 2013 midterm elections were export staple and an important source of fiscal rev- not so favorable to the government, it is even enue and dollar reserves. A similar combination of more surprising that Fernández de Kirchner has factors was behind the decline in the world price retained so much political initiative in the waning of oil. Lower oil prices have reduced the attractive- months of her administration without an anointed ness of shale reserves in Patagonia, which the gov- successor. ernment seeks to exploit in association with Chev- ron and a Chinese oil company, hoping to develop ECONOMIC CLOUDS an alternative revenue source. Fernández de Kirchner was reelected in October Printing currency to cover government expen- 2011, a year after the death of her husband, with ditures had inflationary consequences in a coun- 58 • CURRENT HISTORY • February 2015 try where the consumer price index has risen at a could not receive better terms than those who double-digit rate since 2007 (the initial response did: the Right Upon Future Offers (RUFO) clause, of the government was to tamper with its statis- which expired at the end of 2014. tics). The limits of economic policies based on To allay fears of default arising from the weak- price controls, trade restrictions, and a dual ex- ness of Argentine institutions, the government had change rate led the government to seek access to issued bonds in different legal jurisdictions (Eu- credit in international markets, which had been rope, the United States, Japan) during the 1990s. closed to it since the 2001 default on the external Since 7 percent of creditors had not accepted the debt. restructuring offers, the door to litigation in for- By early 2014, Argentina had already paid its eign courts remained open. In 2012, Judge Thomas debt to international financial institutions and ne- Griesa of US District Court in New York City ruled gotiated a deal to pay compensation for national- in favor of one of the holdouts, NML Capital (a izing the Argentine operations of the Spanish oil subsidiary of US hedge fund Elliott Management), company Repsol.