Argentina embraces progressive hope with challenges on the horizon

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Source: Council on Hemispheric Affairs – Analysis-Reportage

Op-Ed

Juan Pablo Vacatello
From Washington, D.C.

A few seconds past 9:00 PM last October 27, the outgoing administration of Mauricio Macri announced the first official results of the presidential election. A first reading indicated that the numbers were clear and irrefutable. With 65% percent of the votes cast, the unity ticket formed by Alberto Fernández and Cristina Fernández won by a margin sufficient to avoid a second round of voting, with 47% for the Frente de Todos (Front for All), and 41% for Juntos por el Cambio (Together for Change). With the passage of time the margin only increased, to 48.1% versus 40.37%, with 97.13% of votes cast.[1] Nevertheless, the votes were far from the 15 to 20 percentage points predicted by polls and the results of the open and obligatory primaries conducted last August 12th.

16 million Argentines are poor

We know that this outcome was no small matter. For four years the country has endured a model of exclusion, of the destruction of the nation’s productive capacity, a doubling of unemployment from 5.2% to figures exceeding two digits, 10.6% according to an official survey conducted in September of this year.[2] The productive potential of the country is now 62%,[3] compared to  almost  full capacity in 2015. Out of control annual inflation reached 54.5% in September.[4]  The national currency has been devalued around 85%, from $9.50 pesos to around $60.00 pesos per US dollar.[5] The external public debt has also irresponsibly grown. And above all, poverty has hugely increased  to between four and five million new poor just within the past four years. In 2015, the poverty rate was 29% which represents between 11 and 12 million poor.[6] In 2019, the rate exceeded 35.4%, which translates into 16 million Argentines.[7]

All of this is in economic terms. We are not even talking about the change of course in political terms or the impact on social rights. Under Macri Argentina resumed a strong close relationship with the United States (deja vu of the “carnal” relationship of the ‘90s)[8] and turned its back on the Latin American processes underway during the first decade of the twenty first century. It also joined the rest of the continental right in delivering the coup de grâce to Unasur, shaping the Lima Group and advancing hegemonic power in the region.

The electoral victory is important, fundamental. It was a win over a government with plenipotential power, having under its control public institutions, the mass media, big landowners and banks, the owners of capital. To recuperate the keys of the State is the first step.

A decisive but not easy victory

At the same time, the election  results have a disquieting and concerning dimension. Something is amiss in terms of the classical process where impoverished middle classes under right-wing governments reveal themselves overwhelmly as clear majorities through broad popular mobilization. Given the magnitude of the economic and political disaster, one would have expected an easier victory.

This election raises many questions, and we ought to try to find answers before addressing the process of transforming society. How does one explain why the neoliberal and extreme right-wing candidates garnered 43% of the vote?[9] How does one combat the deceptive discourse of the modern right in times of post-truth? What does one do about the judicial branch, historically controlled by the oligarchy, in times of “lawfare”?[10]

A first approximation tells us that the prevailing powers and deceitful message of the modern right have stolen our “banners.”

Macri leaves the country financially broke

The new government faces a complex situation. The country is broke. The productive capacity destroyed. The prices of commodities deflated.  Interest on the debt acquired with the International Monetary Fund will be very difficult to pay back, and the country is on the brink of default with the private international lenders. Meanwhile, there is an urgent necessity to provide a response to the 16 million poor and indigent with inequality on the rise.

The Fernández team will have  to address the expectations of half of the country which supported a return to a model of inclusion and expansion of social rights and will demand immediate results. At the same time, the team ought to combat the discourse of the hegemonic power supported by the other half of the electorate.

A new model centered on the common good

Difficult times are coming. It is clear that if one wants to transform the prevailing model, one ought to bring about structural changes. It will not be enough to incentivize consumption and reactivate the economy given the already complicated objectives to be achieved at this juncture. Perhaps the first step would be the restructuring of the tax system to make it progressive, taxing high income businesses and individuals, enabling a reduction of the regressive tax on consumption.

It is equally necessary to rethink objectives as a society. The mercantilist neoliberal view of the human being as a consuming subject has taken deep root in Argentine culture. The great challenge of the new government will be to try to modify this model for one where human life in community is at the center of the scene and solidarity with the most needy is the fundamental value and objective. This would involve a real shift in cultural values. As the new vice president elect, Cristina Fernández, said some years ago, “the Homeland is the other.”

Juan Pablo Vacatello holds a degree in Business Administration from the University of Buenos Aires. He specializes in housing public policy and is a member of various boards of non-governmental organizations in the Washington, D.C. metropolitan area.

Translation by Frederick B. Mills


End notes

[1] “Elecciones 2019: Los resultados de las elecciones en todo el país”. https://www.clarin.com/politica/resultados-elecciones-2019-quien-gano-argentina_0_fAmHiiJe.html

[2] “La tasa de desocupación alcanzó el 10,6% en el segundo trimestre del año y afecta a más de 2,1 millones de personas”. https://www.infobae.com/economia/2019/09/19/la-tasa-de-desocupacion-alcanzo-el-106-en-el-segundo-trimestre-del-ano-y-afecta-a-mas-de-21-millones-de-personas/

[3] “Subió a 62% el uso de la capacidad instalada de la industria argentina en mayo”. https://www.telam.com.ar/notas/201907/375705-subio-a-62-el-uso-de-la-capacidad-instalada-de-la-industria-argentina-en-mayo.html

[4] “La inflación argentina repuntó hasta el 4% mensual en agosto”. https://elpais.com/internacional/2019/09/12/argentina/1568310356_760861.html

[5] El Economista América – Argentina. https://www.eleconomistaamerica.com.ar/cruce/USDARS

[6] “Para la UCA, hay 13 millones de personas en la pobreza”, 1 de abril de 2016. http://www.telam.com.ar/notas/201604/141656-uca-pobreza-indigencia.html

[7] “La pobreza subió al 35,4% y ya alcanza a 15,9 millones de argentinos, según el Indec”. https://www.infobae.com/economia/2019/09/30/la-pobreza-subio-al-354-y-ya-alcanza-a-159-millones-de-argentinos-segun-el-indec/

[8] The term was used by Argentine Foreign Minister Guido di Tella during the government of Carlos Saul Ménem to refer to relations between the governments of Argentina and the United States.

[9] As of this article goes to press, with 97.20% of votes cast, the “Together for Change” ticket garners 40.4% of the vote, the “NOS” front (a conservative, anti-abortion platform) 1.7% of the vote, and the “Awaken” front (libertarian right) 1.5% of the vote, a total of 43.6% of voters.

[10] A term used to explain the use of positions of power in the judicial branch as a form of warfare against governments within the parameters of institutional legality.