Before returning to Argentina from exile, in 1973, Juan Perón famously said, “It is not that we were good, but those who came after us were so bad that they made us look good.” Perón died in office a year later, during his third Presidential term; he left behind a controversial legacy and a loosely populist movement, known as Peronism, that endures to this day. For nearly a century in Argentina, allegiance to Peronism has been an unwritten condition to completing a full term. Raúl Alfonsín, the first non-Peronist leader to govern the country since its return to democracy, in 1983, left office almost six months early, after surviving three military uprisings. The second, Fernando de la Rúa, resigned in 2001, halfway into his term, fleeing the Presidential palace aboard a white helicopter. The current President, Mauricio Macri, took office in 2015 and is now seeking reëlection, but, after he suffered a disastrous defeat in the primaries earlier this month, many have questioned whether he will prove an exception to the rule.
Primaries in Argentina are intended to whittle down the list of candidates, but they effectively serve as a test of national sentiment. The results of the August 11th vote cast doubt on Macri’s ambitious reform agenda, as he fell fifteen points behind Everyone’s Front, a Peronist coalition led by Alberto Fernández and the former President Cristina Fernández de Kirchner. From the outset, the President, who is a former executive and the scion of a prominent family, had a difficult path to reëlection; Cambiemos, his project to steer Argentina away from economic disarray, has faltered, and many voters believe that their country was in better standing before he took office. The economy has recently contracted, and last year Argentina had to request its twenty-second bailout from the International Monetary Fund (I.M.F.). Because a large part of the electorate has grown wary of his market-friendly approach, Macri chose the Peronist senator Miguel Ángel Pichetto as a running mate. Still, their coalition, Together for Change, hasn’t successfully appealed to Argentines, who have returned to associating Peronism with a prosperous future.
A few months ago, it wasn’t clear how Kirchner would choose to position herself in the election. The former President is a defendant in eleven cases of corruption, but she’s also one of Argentina’s most popular politicians. Kirchner’s reputation is cause for loathing and praise: some accuse her of amassing a fortune in office, of conspiring with Iran, or of orchestrating the murder of a prosecutor who built a case for her arrest; others invoke her inordinate charisma and shrewd politics, or commend her lavish spending on social programs. Proof of Kirchner’s acumen is her choice to run alongside Fernández, as Vice-President—a decision that has prompted skepticism but also relief among those who see her legacy as a disgrace to Peronism. Fernández, a former law professor who served briefly as her chief of staff, may well prove to be a moderating force. He resigned from her cabinet in 2008, seven months after she took office; accused her of “distorting reality”; and opposed her leadership for years. Together, they now purport to right the wrongs that, in their view, Macrism has brought to Argentina.
When Macri took office, a balance-of-payments crisis was imminent, foreign-exchange reserves were dwindling, and inflation levels were so high that Kirchner’s government had altered official statistics. Within hours of his inauguration, Macri lifted capital controls, which sharply limited trade in foreign currency. He went on to cut lavish subsidies to the utility and transportation industries, in order to deal with Argentina’s ballooning fiscal deficit. Macri’s policies, known as gradualism, were intended to steadily restore confidence in the Argentine economy, but some of his critics will argue that they failed because they weren’t all that gradual. Kirchner’s spending on social programs and an overvalued currency had offered a semblance of stability. So, when Macri slashed government subsidies, and bills went up by as much as a thousand per cent, people resented the all-too-real effects. “Fixing such a predicament while avoiding a recession proved very difficult,” Eduardo Levy Yeyati, a former adviser to the administration, told me. “I think the government erred on the side of naïveté in attributing the country’s structural problems to ‘populism’ and assuming that a more market-friendly rhetoric and cast would unlock the animal spirits of investment and growth.”
In fact, foreign investment didn’t arrive arrive as expected or promised. Last year, amid a severe currency crisis, Argentina entered a recession—inflation soared to fifty-five per cent, the peso lost half of its value, and three million people fell into poverty. In the summer of 2018, Macri sought a fifty-seven-billion-dollar bailout from the I.M.F., the biggest in the Fund’s history. Argentina has negotiated dozens of agreements with the I.M.F. in the past six decades, and the institution is widely regarded as a villain, complicit in the country’s recurrent indebtedness. Seeking the Fund’s assistance once again was perceived as a humiliation and an indication that more austerity measures lay ahead. Protesters blocked streets in Buenos Aires and spray-painted messages such as “IMF = HUNGER” or “WITH THE IMF WE’RE GOING BACK TO THE BOTTOM.” The bailout was also a sign of weakness for a President who had committed to bringing inflation down to single digits and leaving Argentina’s recessionary history behind. “We failed to realize how fragile the government and the economy really were on the inside,” a senior Argentine official told me.
One of Macri’s most ambitious campaign goals was his “zero poverty” pledge. Although Kirchner stopped publishing statistics altogether, estimates reveal that roughly a third of the population lived in poverty while she was in power. With the exception of mid-2017, when the poverty rate fell to 25.7 per cent, the numbers haven’t changed much under Macri—if anything, they’ve worsened. Since 2009, Agustín Salvia and a group of researchers at the Catholic University’s Social Debt Observatory have published a yearly report on poverty, which is considered a standard reference in Argentina. Salvia holds the current administration responsible for letting the burden of reforms fall on the poorest. “They found it easy to preserve income transfers, issue more debt, and end consumption subsidies, while waiting for investments to pour in,” Salvia said. “Because investments never reached the desired levels, their model proved to be a failure—the debt burden has become untenable, the public deficit has risen, and stagnation has shattered the project of Cambiemos.”
Macri’s defenders, however, describe his project as a lengthy process and insist that future crises can be averted only by improving Argentina’s standing abroad, a task at which the government has excelled. Whereas Kirchner closed off the Argentine economy and warmed to leaders in Venezuela or Iran, Macri has strengthened ties and negotiated trade agreements across continents. Under his leadership, Argentina hosted the W.T.O. Ministerial, presided over the G-20 Summit, and nearly doubled its currency swap with China. This year, Macri spearheaded negotiations for a historic pact between Mercosur, the South American trade bloc, and the European Union, which had been two decades in the making. His handling of foreign affairs mirrors a defining principle of Cambiemos: that Argentina’s welfare cannot be dissociated from the ebbs and flows of international markets.
Predictably enough, markets panicked in response to the primaries. The day after the election, the peso plummeted more than twenty-five per cent against the dollar, and Argentina’s stocks lost almost half their value, suggesting that investors saw Macri’s defeat in October’s general election as a given. Should a Peronist government return to power, many investors fear that it may default on Argentina’s sovereign debt and try to renegotiate the terms of the I.M.F.’s bailout. This is not an improbable scenario, given that the country has defaulted eight times since its independence, in 1816, and the latest took place during Kirchner’s second term. The lack of predictability has also affected ongoing infrastructure projects, which are a point of pride for the incumbent administration. A Wall Street banker who had been working on a nine-hundred-million-dollar financing package to build highways with the Inter-American Development Bank told me that, after the primaries, he called colleagues to inquire about the project’s fate, only to learn that it had been postponed until further notice.
Meanwhile, ordinary Argentines have seen their savings all but vanish. In the days after the election, people in Buenos Aires rushed to buy pounds of poultry or meat, before the increase in prices made it unaffordable. Some business owners were reluctant to open their doors, seemingly unsure of what price to charge for staples such as flour. Others opened but kept the lights off while there were no customers, to reduce the cost of a looming bill. To mitigate the damage, Macri announced a series of relief measures, including increases in the minimum wage, welfare subsidies, tax cuts, temporary freezes to gasoline prices, and loans for small and medium-sized businesses. It was a distinctly Peronist approach to a crisis—one that favors temporary fixes with little consideration for spending constraints. “ ‘Too little, too late’ is the best synthesis of what Macri is doing right now,” Sergio Berensztein, a political analyst, told me.
If any conclusions are to be drawn from the primary results, the main would be that millions of voters have lost hope in the mandate for change of Cambiemos, but their faith in Peronism has hardly wavered. “Peronists are the governments associated with pulling the country out of crises,” Steven Levitsky, a professor of government at Harvard University, told me. This may well be the reason that all the main Presidential tickets feature a Peronist candidate and why Cristina Fernández de Kirchner is likely to govern again. “Many Argentine voters see Peronists as really the only political force capable of governing the country,” Levitsky said. “Nothing that any non-Peronist government has done since 1983 has changed that perception—it’s only reinforced it.”
Yet, others argue that Macri’s legacy should not be underestimated. “Over the past four decades, Argentina’s economy has been the most unstable in the world, given the frequency of crises, inflationary episodes, recessions, and defaults,” Esteban Domecq, the head of the Argentine economic consultancy Invecq, told me. “Cambiemos placed a limit on fiscal spending, addressed the external deficit, and left us with a competitive exchange rate, effectively driving a process of macroeconomic normalization.” In Domecq’s view, for the current administration to have weathered and tried to overcome such unfavorable conditions is an accomplishment in and of itself. After all, it will take more than three years to right the economy of a country that once was among the richest but is now considered developing. “Although we have yet to see its results, Argentina is halfway through a path of redress,” he added. “The current electoral process now begs a critical question: Will the country ultimately move forward or not?”
At a recent news conference, a journalist urged the President to leave his talking points aside to address the Argentines facing hardship, who go home to an empty fridge or are unable to afford other essentials. In his response, Macri invoked an elderly gaucho who recently appeared in a viral video, expressing his worries about Argentina’s current juncture. The gaucho recalled a childhood episode, when a neighbor asked for his help to get several foals across a wide and choppy stream. Halfway into the stream, he panicked, let go of the horse, and swam back to the bank, only to return home to pick up another foal. Argentines need “to make it to the other side of the river,” Macri implored. “Because if we don’t cross the river, for once and for all, if we go backward, then we’ll have to start all over again.”