Argentina’s Likely Next President Is Not a Populist. Don’t Make Him One.
From a distance, our political story this year seems simple: Good pro-market guy loses, bad guy wins and populism comes back. It is not.
Until the final vote in October, Argentina in effect has a virtual president-elect, the opposition candidate Alberto Fernández, and a lame-duck president seeking what has become an unlikely re-election, Mauricio Macri. Unlike the leaders who have recently been elected in Latin America, Mr. Fernández is a moderate. But he will face an uphill battle to remain that way.
Mr. Fernández unexpectedly outperformed President Macri by a margin of more than 15 percentage points in a preliminary contest last week meant to weed out the least popular candidates. (In addition to Mr. Fernández and Mr. Macri, four politicians have qualified to compete in the October vote.) Mr. Fernández’s running mate is former President Cristina Fernández de Kirchner, which has raised concerns about a return of a so-called populists who dominated Argentina until 2015.
But Mr. Fernández and Mrs. Kirchner are not one and the same.Argentina is a strong presidential system. The person in that office has an ample margin to get his way over institutional and political checks. Mr. Fernández is a pragmatist whose political principles lean to the center-left, and who has no qualms when it comes topicking the policy tools to pursue them.
He boasts that when he served as chief of staff during Néstor Kirchner’s presidency, Mrs. Kirchner’s late husband, the country enjoyed five straight years of a fiscal surplus. But during his tenure, the country snubbed United States President George W. Bush and scuttled a plan to create a free trade area for the continent, in alliance with Venezuela’s Hugo Chávez and Brazil’s Luiz Inácio Lula da Silva.
The region’s immediate reaction to Mr. Fernández’s almost certain win signaled anxiety over his future positions. The far-right president of Brazil, Jair Bolsonaro, said that if Mr. Fernández becomes president, the “leftist bandits” will set off an Argentine refugee crisis. And Diosdado Cabello, one of the strongmen of Nicolás Maduro’s leftist regime in Venezuela, warned Mr. Fernández that his robust vote tally didn’t reflect support for him, but instead opposition to Mr. Macri’s pro-market polices.
If Mr. Fernández’s presidency is to succeed, he will need to disappoint both the right and the left. Given the gargantuan problems with the country’s economy, the question is whether he will be able to remain a centrist. Since a currency run on the peso in April 2018, Argentina has been one of the weakest links of the global economy: The peso has depreciated 67 percent and the country is now in its second year of recession. The I.M.F. has extended the largest single financial package ever given to a country. The foreign debt will exceed 100 percent of its annual G.D.P. by year’s end and the unemployment rate has risen to 10 percent. Over three in 10 Argentines are now officially poor.
Things are unlikely to improve anytime soon, leaving little room for cash-propelled populism. Mr. Fernández knows that to fulfill his vague campaign promise of “reigniting the economy” he will have to align as much support as possible, both at home and abroad.
Argentina has a history of economic meltdowns that haunts the public and scares investors. Argentines older than 40 have lived through at least two of them: hyperinflation in 1989 and a freeze on bank accounts and the largest sovereign debt default in history in late 2001. The country also has a history of political chaos, including guerrilla terrorism and a brutal military dictatorship during which thousands of citizens “disappeared” in the 1970s.
But even with the recurrent chaos and the leadership’s inability to deliver economic results, this year the country hit 36 years of uninterrupted democracy and its political establishment continues to reinvent itself.
Mr. Fernández is a result of that reinvention. With the economy in tatters, politics was heading toward either a polarization of extremes between the incumbent Mr. Macri and Mrs. Kirchner, or the surge of a maverick outsider. Mrs. Kirchner’s decision to endorse Mr. Fernández and run for vice president effectively united their Peronist party and shifted it toward the center.
Mr. Fernández fiercely criticized Mrs. Kirchner’s second term in office, from 2011 to 2015, and has said he will not lead a return to the past. Still, the dominant Kirchner faction within the party might attempt to push him to the left.
The coalition he leads worked well in the anti-Macri campaign but would be tested in a presidency. Mr. Fernández will need to build solid bridges with players whom Mrs. Kirchner’s followers considered to be “enemies of the people,” including businesses, Wall Street and the White House. His ability to resist the siren call of populism will largely depend on his immediate ability to steer the economy out of the storm.
The country’s international partners have a role to play to be sure. The first thing the next economy minister will have to do is renegotiate the terms of the loans from the I.M.F., which Argentina will likely be unable to repay by the end of 2023. The I.M.F. might feel it has to be tougher on Mr. Fernández than it was on Mr. Macri, but at the peril of alienating its main debtor. The same applies to the Trump administration, which threw its weight behind Mr. Macri but counts on Argentina as a stabilizing factor in a region that risks losing its bearings.
The next president will be walking on a tightrope. He might need a circus net.