The end of an era in Argentina

Despite growing protests since 2012, Argentina's outgoing president Christina Fernández de Kirchner, who represented the leftist Justicialist Party, remained defiant till the end. Having reached Argentina's two-term limit as its president, she became ineligible to run for the third time. She campaigned endlessly for Daniel Scioli, her handpicked successor, to win Argentina's presidency on November 22 in a runoff election.
To everyone's surprise, Mauricio Macri, the former mayor   of Buenos Aires from the right-wing party, became the victor and the new head of state. Macri ran on a campaign called, "Let's make a change." Macrci's win from the right-wing party marks the end of an era and the "Kirchnerismo" rule of the past 12 years. An increasingly hostile middle-class voted for the centre-right candidate Mauricio Macri. He was able to convince the voters to discard Kristina Kirchner's left-wing image that was based on mirage than reality.
The Kirchners had held onto power for the last twelve years with combined leadership - first Christina's predecessor and husband Néstor Kirchner and for the last eight years Christina herself. Their party's philosophy is based on the populist "Peronismo" of Juan and Eva Perón which was founded under the dictatorship of Perón.
Argentinian politics has been shaped by the Perons - Juan Perón and his wife Senora Eva Maria de Perón - with "populist overtones and a pronounced authoritarian streak." The charismatic life of the Perons, was idolised in a 1996 Hollywood movie, Evita. To the poor people in Argentina, Eva Maria was one of the most beloved First Ladies. The poor simply called her Evita. The velvet, silk, satin and taffeta gown-wearing Evita, bejewelled in the most expensive and rare stones, was considered as one of them for she was the daughter of a seamstress who worked hard to support her family. Her rural background won the hearts of the poor and the working class. They saw Evita as their personal benefactor, and her support to the poor after she married Colonel Juan Perón had earned her the veneration of a mythical figure.
Long after the Peróns, Argentina's landscape has been dominated by Peronism for seventy years. Since 1989, the leftist party held onto power by riding on the back of the workers by organising labour unions and capitalising on the working class's hatred for the rich, much like Juan and Eva Perón.
The Justicialist Party's philosophy has always been inspired by the Peróns, and Christina Fernández has revered Evita to a point where she had carried her in her political life. Christina, among many things, tried to imitate Evita by supporting the labour unions. Like Evita, for a number of years, Christina was successful in reaching out to the masses by siding with the poor, but she lacked Evita's magic touch. Common people got tired of waiting for Christina to recover Argentina's broken economy. In the recent years they lost faith in her and joined the chorus "Christina must go." Christina is no match for Evita. Sixty-two years after her death, Evita still remains a sacred symbol for her ability to befriend the poor.
Christina in the last couple of years took an antagonistic approach for her party to stay in power. Her message to the Argentinians was simple: "Either you are with us or against us." This sort of ultimatum divided the society as she lost touch with the people. She kept on defending her government on a daily basis with television broadcasts and with incessant aggressive remarks by belittling citizens who didn't support many of her party policies.
However, no one really expected such a dramatic outcome of the election. What favoured Mauricio Macri over Daniel Scioli? Before the elections, all sides knew the government was "spending its foreign reserves to slow a nevertheless rapid decline of the peso and to hold down inflation, which is already over 20 per cent." Many feared "with GDP (gross domestic product) growth coming in well below 1.0 per cent so far in 2015, the odds are that the economy is on the brink of a sharp recession, dragged down by its reliance on slacking Chinese demand, among other factors."
Since the election result shows a sharp change of direction, analysts on South America are predicting that with Macri holding the reins from December 10, transformation for South America's second biggest economy is on its way. Macri's ideology is based on change and his resolve is to solve the great problem of poverty. He won the trust of general masses because he talked about consensus over controversies. Macri thinks he can improve the current inflation rate (which is among the highest in the world), slowing growth and the soaring crime rate. Macri promised to bring down the estimated 30 per cent inflation rate over the last four years to a single digit.  
Argentina has the potential to be a very prosperous country because of its rich natural reserves of oil, steel and soya.
The son of Italian immigrants, Mauricio Macri ran a construction and car manufacturing company before becoming president of the Boca Juniors football club. He led the club through the most successful period in its history. He then was elected mayor of Buenos Aires, and is extensively praised for his infrastructure reforms. Macri grabbed the opportunity to run for president in the midst of Argentina's dwindling economy and ran a campaign on a platform of change which attracted the voters. He has a plan for introducing a well-balanced system which will end the debt dispute with the foreign investors. Many investors left Argentina way before the Kirchners came to power.
With the budget deficit soaring to 7 per cent, Argentina has no choice but to negotiate with the US creditors. Argentina defaulted on its $100-billion debt in 2001, and made separate deals with a group among the bondholders for making smaller payments. There were holdouts, such as Paul Singer's Elliott Management, who went to court demanding full payment. Judge Thomas Griesa of New York sided with these holdouts. The Argentinian government wasn't too pleased with Judge Griesa. Cristina Kirchner called these holdouts (Elliott Management, Aurelius Capital Management), and the judge 'economic terrorists' at times, while financing her spending independently.
The exchange bondholders did not sit idle; they went to UK courts and won a small victory there. They planned to go to the US courts next and persuade judge Griesa that reduced payments by the Argentine government were acceptable, at least to the exchange group. In the meantime, Argentinian government has been essentially shut out of the international bond market. There is no direct foreign investment because of the climate created by the Kirchner administration by raising the interest rate on corporate debt, and discouraging activities in the private sector. Due partly to capital outflows, the foreign currency reserve is under $26 billion (lower than that of Bangladesh) for the first time since 2006. Financing imports, in addition to servicing debts, becomes all the more difficult as the currency reserves get lower.
The annual inflation rate of 25 per cent is another major headache that the Macri administration will have to bring under control. The unofficial estimate is that it was as high as 28 per cent in 2013-14, although the Kirchner government had suggested a tame 11 per cent by clever manipulation of the numbers. Printing money was necessary to finance spending, as the international markets were closed to Kirchner after the default restructurings. Printing money is not necessarily bad, argued the Argentine Central Bank president Mercedes Marco del Pont, as the roots of inflation lay in other causes.
During Kirchnerism, Argentina recovered from any crisis situation by hiking the price of commodities. The government used to take pride in bringing down the unemployment rate down from 20 per cent to 7.0 per cent since 2002, punishing the human rights abusers, approving same-sex marriage, nationalised industries and implementing many social welfare programmes to promote inclusion.
However, there is no dispute now that in the last four years, the economy has slowed down and it will fall on the new president to fix it. According to Macri camp, "The government has manipulated statistics; it's impossible to have an idea about official poverty rates or inflation."
All eyes are on the president-elect: what will he do with regard to the debt dispute, the foreign currency reserve, inflation, among others? Macri has to prove his opponents wrong by not taking a weaker stance on human rights. He will also have to make sure that the neo-liberal polices of the 1990s that had ended with the country's economic collapse will not return under his watch. It remains to be seen how he deals with the challenges that lie ahead with a complicated economic scenario and the US-based hedge funds demanding full payment. He will most probably bring in his business managerial skills to get things done in rescuing Argentina's floundering economy. With his leadership style, the way of governing will undoubtedly be different from his predecessor Christina Kirchner. The Macri victory will have to change Argentina's status in the world by making it a stable economic power in South America.

The writer is a US-based freelancer. She previously taught Middle School children with learning disabilities at Our Lady of Victory in Washington DC.
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