Actually, Kirchner is not a complete political stranger. A product of the Peronist party’s “progressive” wing, he railed throughout the campaign against the corruption and free-market economic policies that stamped Menem’s 10-year presidency. That message struck a chord; most Argentines trace the roots of their country’s worst-ever economic crisis to the waning months of Menem’s second term in the late 1990s, when government spending jumped sharply and a deep recession took hold. Kirchner’s projected victory, then, would have less to do with his own popularity than with the voters’ resolve to punish Menem for the mess he left behind.
A proponent of neo-Keynesian economics, Kirchner has invoked some of the Peronist party’s old populist rhetoric. He advocates a greater role for the state in putting Argentina back on the road to recovery. It was no accident that Kirchner, bolstered by a new poll that gave him a 37 percentage-point lead over Menem, flew to Brazil and Chile last week for meetings with the center-left presidents who run those countries. “Kirchner is a 1970s-style Peronist,” says economist Norberto Sosa. “He’s a defender of national interests, and he sees Menem as having betrayed the party’s traditional values.”
Kirchner’s ascent, in large measure, has to do with a bitter vendetta between Menem and outgoing care-taker President Eduardo Duhalde, who took office early last year at the nadir of Argentina’s economic meltdown. Duhalde had a falling out with Menem during the 1990s, and he scoured the Peronist party’s top ranks for a politician who could turn back Menem’s bid for a third term. When Duhalde’s first choice declined the invitation and another ally fizzled in the polls, he settled on Kirchner almost by default. A descendant of Swiss and German immigrants, Kirchner had compiled a respectable record in his 11 years as governor of Santa Cruz province–a remote, oil-rich region of only 200,000 people that occupies the southernmost tip of the continent–but to most Argentines he was “Nestor Who?”
The relationship involves tradeoffs. Duhalde assigned two of his key aides to help run the Kirchner campaign, and he prevailed on the candidate to retain Economy Minister Roberto Lavagna, the government official widely credited with halting the country’s headlong slide into economic chaos last year. That decision has been welcomed by much of the battered middle class as evidence that Kirchner would stay the course charted by his lame-duck benefactor.
Why wouldn’t he? After four straight years of precipitous decline, Argentina’s economy is stirring again. The Argentine peso that was trading at 3.75 to the dollar in September has strengthened by more than 25 percent. Inflation fell to a 15-month low in April; the government has maintained a monthly operating fiscal surplus for nearly a year, and the International Monetary Fund –just revised its economic growth forecast for Argentina in 2003 from 1 to 4 percent. The same country that became a pariah among international bankers for defaulting on its mammoth foreign debt last year is drawing praise from its longtime critic. “Given the macroeconomic outlook, we should be optimistic,” said IMF Western Hemisphere director Anoop Singh earlier this month. “Argentina has sustained the stabilizing trends that began to emerge last year.”
But skeptics warn that the economy’s so-called “little summer” may prove short-lived unless Kirchner carries out the painful reforms that Duhalde put on hold. They include revamping a complex tax code and trimming a bloated public sector. Roughly one in five Argentines is jobless, and over half the population lives below the official poverty line. Tax evasion remains as widespread as ever, and IMF officials have been lobbying the government to lift the freeze on water, electricity and other public utility tariffs. Long-postponed banking reform would require the incoming administration to shell out an estimated $20 billion to help financial institutions recoup their losses when the peso was sharply devalued last year. Kirchner will have to solve all these problems and maintain economic stability to persuade the IMF to extend a temporary accord that lasts only until August. He will also need to renegotiate the country’s $155 billion debt and increase the fiscal surplus that the Duhalde government has been posting since the middle of the last year to meet renewed payments.
To make things worse, even if his actions don’t turn out to match his populist rhetoric, Argentina’s accidental president won’t have anything even remotely resembling a personal mandate. Kirchner carried only seven of Argentina’s 23 provinces in the first-round election. Beyond that, he has few allies in a fragmented National Congress and will have to forge a governing coalition with politicians who answer to others. “Kirchner will be the least powerful president in the history of Argentina,” says pollster Manuel Mora y Araujo. “This is a country without leaders, and Kirchner has no support he can call his very own.” But in a society brought to ruin by a string of elected strongmen stretching from Juan Domingo Peron to Carlos Menem, a weak president may not be such a bad thing after all.
