The future of Kirchnerism in Argentina

December 16, 2013

Argentina’s President Cristina Fernandez, left, embraces Axel Kicillof after he was sworn in as the new Economy Minister at the government house in Buenos Aires, Nov. 20, 2013. (Natacha Pisarenko/Associated Press)

Joshua Tucker: The following is a post-election report on the Argentinian mid-term elections from political scientists Natalia C. Del Cogliano and Mariana L. Prats.

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A little more than two months have gone by since the most recent midterm elections were held in Argentina. Amidst widespread concern over a drop in  foreign reserves, it seems that Cristina Fernández de Kirchner’s government has started to make significant changes to preserve the economic and political model in place while trying to respond to international financial markets’ expectations. Such changes may mean that the polls were heard and that the government could realize the time has come for implementing a different strategy.

While the U.S. government publicly expressed its concern about the significant drop in the monetary reserves, it also recognized Argentina’s will to repair its image in the international financial markets so it could borrow from those markets again. Furthermore, these days, Spain and Argentina have finally been able to reach an agreement on the Repsol-YPF affair. After more than a year of negotiations regarding Repsol’s compensation for the expropriation of its 51 percent stake in YPF, and with the Mexican Pemex serving as a mediator, the offer the Spanish multinational has accepted is less than half the $10.5 billion Repsol originally requested. It is worth mentioning that Argentina, helped by the Mexican minority partner of Repsol, was able to impose the best conditions for these two Latin American countries. But what does this mean at the national and international level?

About a month after mid-term elections where her party lost some significant support, Fernández returned to work after undergoing surgery to remove a blood clot caused by an earlier fall. Immediately after her return, the Cabinet was subjected to a considerable shake-up. This turned out to be a major political and economic signal. Of course, the post-electoral setting had a lot to do with it.

On Nov. 18, Fernández demonstrated that Kirchnerism, as an expression of Peronism, still is flexible enough to adapt to the turning tide. The Chief of Cabinet, Juan Manuel Abal Medina, was removed and replaced by the governor of the northern province of Chaco: Jorge Capitanich. A mainly Kirchnerist cabinet member with an academic background was replaced by a traditional Peronist with his own territorial capital and long executive experience. The former Deputy Economy Minister, economist Axel Kicillof, was promoted to minister. In addition to these two prominent replacements, the Central Bank chief was replaced by a financial expert. Finally, the new Minister of Agriculture is now the former director of the National Institute of Agriculture Technology (INTA) — Carlos Casamiquela.

All of these changes have important political implications and didn’t take attentive Argentinians by surprise. Since the votes were cast in the mid-term election on Oct. 27, it was quite clear that the government, if rational and strategic, had to make some changes. In this regard, a Cabinet shift was expected. The day after the new Cabinet was announced, and when every newspaper was writing about the way the new Economy Minister would handle the relationship with the controversial Interior Commerce Secretary Guillermo Moreno, the latter resigned. He would be transferred to the Argentinian Embassy in Italy. Although these changes signify a ratification of the current economic course of the country, they also account for a redefinition of the government’s political strategy. The government’s decision to continue with its current economic plan but at the same time take into account the concerns of the middle class regarding the ongoing economic model is quite clear. In this regard, Moreno’s resignation can be read as a wink to the middle class, the group most displeased with Fernández’s economic measures, and as a move in the quest for an entire economic course redefinition.

As for the new Chief of Cabinet, it seems the President found a way out of all the mire in the words of the Constitution. Since his appointment, Capitanich has done pretty much what any previous Chief of Cabinet may have wanted to be able to do. This is primarily explained by the Fernández’s decision to delegate authority to him. As a consequence, Capitanich has been acting essentially as the Prime Minister which the Constitutional reformers of 1994, who introduced the Chief of Cabinet figure, had hoped for, inspired by the supposed advantages of the semi-presidential system to avoid governmental instability. This, plus the fact that he himself has a wide base of political and electoral support in his province, allows him to be perceived as the head and executor of the government’s policies and strategies. Moreover, Kirchner’s decision to back off and leave the center stage to Capitanich (of course under her command) seems to be telling of who her future successor could be. In this respect, the President has defined a major issue that seemed to be lacking during the last elections: her succession. One of the major problems Kirchner faced in that election season was the nonexistence of a possible successor. If Capitanich does happen to be her choice for 2015, we may be witnessing an unusual pathway to the presidency in the midst of the resurgence of the power of governors — the ones who have traditionally starred in the Argentine presidential contests. It could be the first time that a governor does not come straight from the province to the presidential contest until he is “tested” nationally, while closely monitored by the President.

The future political outlook given the shifting landscape painted above must be put into the context of the years of Kirchnerismo and the Peronist history of strategic adaptations and pragmatic mutations in Argentina. What does Capitanich’s appointment mean for 2015? Could his potential candidacy indicate a new turn to the right within the Peronist Party (PJ)? Is it time for the PJ’s “conservative wing” to govern? Or would the Kirchnerismo be able to embrace the continuity of the current more “left-wing” model? Only time can answer all these questions. Perhaps the situation facing opposition parties and realignment toward 2015 will provide some relevant clues in this regard.

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James Fearon | December 16, 2013