ARGENTINE UPDATE – Nov 23, 2015 (bis)


7. IN REBUKE TO KIRCHNER, ARGENTINES ELECT OPPOSITION FIGURE AS PRESIDENT (The New York Times)
By Simon Romero and Jonathan Gilbert
23 November 2015

BUENOS AIRES — Argentine voters handed a victory to Mauricio Macri in the country’s presidential election on Sunday, delivering a mandate to an opposition political figure seeking to roll back some of the protectionist economic measures of the departing president, Cristina Fernández de Kirchner.

With votes from 99 percent of polling places counted, Mr. Macri, the mayor of Buenos Aires and a former president of Boca Juniors, one of Argentina’s most popular soccer teams, was leading with 51.4 percent of the vote, according to election officials, against 48.5 percent for Daniel Scioli, a former speedboat racer and vice president under former President Néstor Kirchner, who died in 2010. Mr. Scioli conceded defeat on national television on Sunday night.

Running a largely nonconfrontational campaign in a society that has grown increasingly polarized under Mrs. Kirchner, who succeeded her husband in 2007, Mr. Macri, 56, stunned the political establishment in October by forcing the race into a runoff and maintaining his surge in recent weeks. He ran to the right of his rivals, blending plans to overhaul the economy and promote the tolerance of various points of view on social issues.

Mr. Macri’s relatively narrow victory revealed deep fissures in Argentina after 12 years of governance by Mrs. Kirchner and her husband, with many voters expressing concern over the direction of the economy and frustration with Mrs. Kirchner’s blistering attacks on critics in the news media, business establishments and rival political parties.

”Cristina divided the country and destroyed it morally,” said Dimitri Javakhishvili, 67, an immigrant from Georgia who works as a doorman at a building here in the neighborhood of Recoleta. Mr. Javakhishvili acknowledged that Mr. Macri could face challenges in trying to govern when Mrs. Kirchner’s political movement moves into the opposition.

Still, Mr. Javakhishvili said, ”At least he’s something new; he’s something fresh.”

Not everyone here shares such views. Graffiti and posters have appeared across Buenos Aires demonizing Mr. Macri, outnumbering on many streets the campaign posters expressing support for Mr. Scioli, who balanced lukewarm support from Mrs. Kirchner’s loyal followers with claims that social spending could be sustained despite galloping inflation and declining private investment.

One example of anti-Macri sentiment, alluding to fears that he will govern for a privileged few, simply says ”Macrisis.”

Mr. Macri, the scion of a wealthy family, has tried to combat perceptions that he would reverse the government’s leftist policies, saying he will keep the nationalized companies like Aerolíneas Argentinas and YPF, Argentina’s largest oil company, under state control. His economic advisers have also sought to tamp down fears around contentious economic issues like a potential currency devaluation.

In addition to grappling with inflation and currency controls aimed at curbing capital flight, Mr. Macri will now face the challenge of governing with much of his opposition under the sway of Peronism, the ideologically diverse political grouping that has dominated Argentine politics for decades.

Yet while Mrs. Kirchner’s leftist faction has emerged as a dominant group within Peronism, with the president herself signaling that she planned to remain politically active after stepping down in December, Mr. Macri’s margin of victory will help him in the months ahead, analysts said.

”He will be able to start to work with authority,” said Juan Cruz Díaz, a director at the Cefeidas Group, a political risk analysis firm. But he added that Mr. Scioli’s performance still demonstrated the underlying strength of the Peronist political movement. ”It’s not a devastating margin of difference,” Mr. Díaz said. ”With a fatigued government and an erratic campaign, it’s a good performance. They are far from dead.”

Many political analysts in Argentina doubted that Mr. Macri would make it this far, with skepticism abounding when he began assembling his movement to the right of many rivals more than a decade ago.

He ventured into a part of Argentina’s political spectrum that had previously been associated with conservative Peronists or disgraced figures in the military establishment.

But over time, he honed his negotiating skills as the mayor of Buenos Aires, while insisting during this year’s campaign that he did not plan to roll back popular social programs introduced during the Kirchners’ presidencies, like cash subsidies for poor families and ”Soccer for Everybody,” a government initiative that covers soccer broadcasting fees so people can watch matches free.

Mr. Macri seemed to gain the upper hand after mounting a door-to-door campaign that helped his supporters win important provincial and local races in October, including the prized post of the governor of Buenos Aires Province, now held by Mr. Scioli but won by María Eugenia Vidal, a top adviser to Mr. Macri and deputy mayor who focused largely on antipoverty programs in the municipal government.

Many voters have also expressed fatigue with Mrs. Kirchner’s governing style and reports of corruption among her prominent supporters.

Signaling that she may not plan to remain subdued after leaving office, Mrs. Kirchner issued a torrent of messages on Twitter on Sunday celebrating her foreign and domestic policies. One message even seemed like a warning to Mr. Macri, who has vowed to improve Argentina’s strained ties with the United States and review a contentious deal with China to build a nuclear reactor.

”The person with the responsibility of leading the homeland should know the right place of the Argentine republic in a multipolar world,” Mrs. Kirchner wrote.

Mr. Macri’s ”wager wasn’t an easy one,” the Argentine writer Martín Caparrós wrote in the Spanish newspaper El País. But Mr. Macri’s ambitions were aided, Mr. Caparrós said, by ”12 years of rule by a couple that spoke as if from the left but acted in their own interests.”

Some voters, however, said that their fears over the threats to the government’s antipoverty programs outweighed criticism of the Kirchners or concerns that Mr. Scioli, viewed as friendlier to the business establishment, was not as radical as they had hoped.

”I’m voting for the lesser of two evils,” said Teo Levín, 25, a medical student who explained that he was voting for Mr. Scioli with gritted teeth. ”I understand that Scioli will adopt come conservative economic policies, but he won’t destroy the political model. Macri will. He’s the worst thing in the world.”

Back to contents

8. UPSTART’S RISE HAS ARGENTINA CONSIDERING POLITICAL SHIFT (The New York Times)
By Simon Romero and Jonathan Gilbert
21 November 2015

HUMAHUACA, Argentina — Winding down a presidential campaign that is upending this country’s politics, Mauricio Macri dutifully chewed on coca leaves, a symbol of the resilience of indigenous culture in this remote corner of northern Argentina. Raising his voice barely above a murmur, he asked Mother Earth for the wisdom to guide Argentina down the ”righteous path.”

With a sphinxlike smile, Mr. Macri deflected questions about the depth of the adjustments to economic policy he plans to make if he wins the election on Sunday.

This scene on Thursday would have been nearly unthinkable just a month ago, when Daniel Scioli, President Cristina Fernández de Kirchner’s preferred successor, was expected to glide into the presidency. But after mounting a frenetic campaign that crisscrossed Argentina and pushed the race into a runoff, taking him into what were believed to be Mrs. Kirchner’s strongholds, Mr. Macri is emerging as the front-runner.

”Everything is possible in politics, especially when those in power wield their influence with arrogance,” said Aída Villalpando, 49, a community activist who traveled from the provincial capital, San Salvador de Jujuy, to show support for Mr. Macri, the mayor of Buenos Aires. Ms. Villalpando said Mrs. Kirchner’s supporters had intimidated voters, and she cited their actions as among the main reasons she planned to vote for Mr. Macri.

With polls showing Mr. Macri in the lead, the possibility that he could win has many gauging the impact of such a shift in Argentina. Since 2003, the country has been under the sway of Mrs. Kirchner, one of its strongest leaders in decades, and her husband, Néstor Kirchner, who died in 2010. Under them, Argentina recovered from an economic crisis as the authorities asserted more control over the economy, deepened energy subsidies and clashed with the news media.

Mr. Macri, 56, has vowed to roll back such policies, pointing to galloping inflation and intensifying political divisiveness, while running a largely nonconfrontational campaign seeking to soften his patrician image as the scion of a wealthy Argentine family.

His opponent, Mr. Scioli, 58, a former speedboat racer and the departing governor of Buenos Aires Province, has increasingly gone on the offensive, calling Mr. Macri ”a snob from Barrio Parque,” one of the most exclusive neighborhoods in Buenos Aires.

Mr. Scioli accuses Mr. Macri of concealing plans to put in place market-oriented policies, which many Argentines blame for an economic crisis in 2001 and 2002, and of cozying up to international financial institutions from which Mrs. Kirchner has distanced the country. ”Don’t let them fool us under the slogan of ‘change,’ ” Mr. Scioli said Thursday in a closing campaign speech. ”Because it’s a lie; it’s structural adjustment and a pact with the International Monetary Fund.”

Stunning a political establishment that had grown accustomed in recent years to blistering attacks on critics by Mrs. Kirchner and her supporters, Mr. Macri has largely avoided such tactics during his campaign. In an interview with journalists here in Jujuy Province on Thursday, he spoke in a low monotone.

”I’ll have a balanced economic cabinet,” Mr. Macri said of his choices for top economic policy posts, declining to say who would fill them while drawing a contrast with previous governments on the left and the right in which star economists have wielded substantial power over other ministers.

Dressed in a blue shirt without a tie, Mr. Macri greeted other questions with the barest of smiles while sitting in a hotel lobby. At the end of a long campaign, he seemed neither exhausted nor dazed, resembling instead someone who might have emerged from a session of meditation.

Hewing to his plan to restore investor confidence in the economy, Mr. Macri calmly criticized what he views as the unreliability of official statistics in Argentina. He avoided mentioning Mrs. Kirchner or Mr. Scioli by name. Touching for a moment on a politically delicate subject, he said he planned to review a deal with China to build a nuclear reactor in Argentina.

Some political analysts question how a Macri presidency would deal with Peronism, the ideologically diverse political grouping that has long dominated Argentine politics. Still, other analysts say that Mr. Macri has made strides in reshaping Argentina’s political landscape, especially with the victory of a rising star in his party, María Eugenia Vidal, who was recently elected to the coveted governorship of Buenos Aires Province, a Peronist stronghold. Ms. Vidal’s triumph, they said, has lifted a veil of doubt about Mr. Macri’s ability to govern beyond the city of Buenos Aires, a pocket of relative prosperity enclosed by poorer sprawl not covered by his administration. Those surrounding areas are home to nearly a quarter of Argentina’s population. Crucially, mayoral races across the province were also won by Mr. Macri’s candidates, easing fears of struggles between Ms. Vidal and influential Peronist power brokers.

”The geography of Argentine politics has changed,” said Julio Burdman, an Argentine politics professor.

Some are even suggesting that the only issue at play on Sunday is Mr. Macri’s margin of victory. A poll by Elypsis, a political research firm that accurately predicted the first-round result, gave Mr. Macri 47 percent of the vote, against 39 percent for Mr. Scioli, with 11 percent undecided. The survey, taken on Nov. 16 and 17 in interviews with 2,200 people around the country, had a margin of sampling error of plus or minus three percentage points.

A small margin of victory may not be enough to give Mr. Macri a mandate, wrote Carlos Pagni, a political commentator, in the newspaper La Nación. ”Macri needs a conclusive victory to carry out reforms that would allow him to relaunch the economy,” Mr. Pagni wrote.

Still, others questioned the reliability of the polls when so many failed to predict Mr. Macri’s strong showing in the first round. The race remained volatile even after the candidates formally wrapped up their campaigning on Thursday, with Mr. Scioli contending that he had the support of Pope Francis, who is from Argentina and ranks among the country’s most popular figures. Francis has urged his countrymen ”to vote according to their conscience.”

Jaime Durán Barba, an Ecuadorean campaign strategist for Mr. Macri, disputed Francis’ importance, speaking in favor of decriminalizing abortion and telling reporters on the sidelines of Mr. Macri’s coca-chewing ritual that ”a pope doesn’t influence more than 10 votes in a country.”

Mr. Macri reacted on Twitter, saying Mr. Durán Barba’s statements ”do not represent my thinking.”

Back to contents

9. ARGENTINA ELECTS CENTER-RIGHT PRESIDENT, REPUDIATING FERNANDEZ DE KIRCHNER (Los Angeles Times)
By Andres D’Alessandro and Chris Kraul
November 22, 2015

Riding a wave of voter discontent over a stagnant economy, Buenos Aires Mayor Mauricio Macri won Argentina’s presidential runoff election Sunday as voters repudiated the policies of the departing president, Cristina Fernandez de Kirchner.

With roughly two-thirds of the country’s ballots counted, Macri, a center-right candidate, was leading with 54% of the vote, giving him a comfortable margin over Daniel Scioli, Fernandez’s handpicked candidate, who had 46%.

Scioli conceded defeat shortly before 10 p.m. and Fernandez called Macri to congratulate him and arrange a meeting on Tuesday.

“The popular will has shown itself by electing a new president, Mauricio Macri,” Scioli said in an appearance at his campaign headquarters in Buenos Aires. “I called him to wish him success for the benefit of the country.”
All major exit polls had Macri winning. A final tally is expected Monday.

A former president of a professional soccer club, Macri, 56, is mayor of the country’s capital and largest city. He has promised to jettison much of Fernandez’s left-leaning economic policies, which critics say have led to 28% inflation, stagnant growth and a drying up of foreign investment.

“This is an enormous joy and I feel that we are living a historic day that will change our lives,” Macri said after voting with his wife at a school in the capital’s Palermo district. “I hope Argentina is about to enter a new stage.”

Recent voter preference polls gave Macri, who heads the center-right PRO coalition, leads of up to 12 percentage points against Scioli, who as Victory Front party leader is the governor of Buenos Aires state and a former professional boat racer who lost his right arm in a racing accident.

In the first round of voting on Oct. 25, Scioli tallied 37% of votes cast, ahead of Macri’s 34%. Congressman Sergio Massa finished third at 21%. Although Massa declined to throw his weight behind either of the top two finishers, a majority of his support had been expected to go to Macri.

Voters were reacting to 12 years of “kirchnerismo” – the interventionist policies of Fernandez, who has been in office since 2007, and those of her late husband and predecessor, Nestor Kirchner, who served a four-year term starting in 2003.

A sign of Fernandez’s waning electoral strength was the loss of the Buenos Aires governorship in October to opposition candidate Maria Eugenia Vidal, who will succeed Scioli. It was the first election since 1987 that a Peronist –the name given to followers of populist President Juan Peron and his wife Eva – has not won the country’s most populous state.

Macri has been vague on specific proposals but has said he would make government more “intelligent” and reduce a fiscal deficit that is expected to reach 7% this year, a reflection of Kirchner’s election-year spending.

Macri has said the three priorities of his administration would be “zero poverty, fighting drug traffickers and improving institutions,” a reference to Fernandez’s purported use of the judiciary and regulatory agencies to thwart opposition legislation.

Macri said he will “adjust” currency controls that have fed much of the country’s double-digit inflation. While the government maintains an official exchange rate of about 9.5 pesos to the dollar, the black market rate is currently around 14.5 pesos to the dollar.

Fernandez’s populist policies have included restricting imports, a heavy hand in farm policy and subsidies of energy and transportation prices that are popular with poor constituents. She is constitutionally barred from running for a third term.

Fernandez also expanded the country’s social safety net by augmenting elderly care, education spending and pensions. She has reduced poverty by paying out monthly stipends to families to improve their children’s school attendance and regular medical treatment.

After voting in her southern city of residence, Rio Gallegos, Fernandez described the election as “historic.” She said that Argentina has had 12 years of “economic constancy and progress” following a crisis that included a 2001 bond default and devaluation.

“The streets in peace, people working and taking vacation — we have never had a period of government with this reality of economic stability and progress,” Fernandez said.

In the final weeks of the campaign, the president’s son, Maximo, who heads kirchnerismo’s La Campora youth movement, sent out social media messages warning supporters that Macri, if elected, would discontinue the social programs expanded by his mother.

Macri responded by criticizing what he called scare tactics. “Social plans are not a gift but a right and we are not going to discontinue them,” Macri said at a campaign event last week

Back to contents

10. MAURICIO MACRI WINS ARGENTINA PRESIDENTIAL ELECTION (Financial Times)
By Benedict Mander in Buenos Aires
November 23, 2015

Mauricio Macri, the centre-right mayor of Buenos Aires who has vowed to bring change to Argentina, won presidential elections on Sunday, marking the beginning of a new political era for South America’s second-largest economy.

“Today is a historic day. It is the change of an epoch,” Mr Macri told a crowd of jubilant supporters waving flags and balloons on Sunday night, before breaking into an energetic dance on stage. “It is here, it is now, let’s go Argentina!” he roared.

The 56-year-old son of an Italian construction magnate won 51.6 per cent of the vote, leaving Daniel Scioli, the government-backed governor of the province of Buenos Aires, on 48.3 per cent, with more than 97 per cent of the vote counted.

“People opted for a change. May God illuminate Macri so that this change is a winning one,” said Mr Scioli as he conceded defeat.

The victory for the former president of Boca Juniors, one of Argentina’s most popular football clubs, brings an end to 12 years of populist rule by the outgoing leftist president, Cristina Fernández, and her late husband and predecessor, Néstor Kirchner, who took power in 2003 in the wake of a devastating economic crisis.

The shift to the right in Argentina comes as many leftwing leaders in Latin America, especially in Brazil and Venezuela, are suffering plunging popularity ratings and tanking economies as the resource-rich region adjusts to the end of a decade-long economic boom spurred by high commodity prices.

Mr Macri himself will inherit a complicated economic scenario, including a widening fiscal deficit, double-digit inflation and an acute scarcity of dollars thanks to Argentina’s isolation from the international capital markets since its 2001 sovereign debt default, at the time, the largest in history.

Foreign exchange reserves are running so low that the central bank ordered banks on Saturday to sell two-thirds of their dollar holdings in order to boost its foreign currency liquidity so that it can continue to support Argentina’s heavily overvalued currency. Many expect a sharp devaluation after Mr Macri becomes president on December 10. He has pledged to start removing strict capital controls on his first day of office.

A party atmosphere filled Mr Macri’s campaign headquarters, where euphoric supporters celebrated a victory that just a month ago had seemed almost out of reach. But an unexpectedly strong performance by his coalition in the first round of the presidential elections on October 25 forced the run-off vote on Sunday.

Despite the economic challenges facing Mr Macri, many Argentines celebrated a peaceful and democratic handover of power in a country that has been plagued by military coups and economic crises that have toppled numerous governments over the last century.

“At long last! We’ve been waiting formacri this moment for too long,” cried Alfonso Zamora, excitedly honking his car horn at a traffic light on a busy intersection in the upscale district of Palermo in the capital city shortly after local media first declared that Mr Macri had won. “Argentina is going to become a different country.”

Back to contents

11. MAURICIO MACRI’S CHOICE FOR ARGENTINA: SHOCK TREATMENT OR GRADUAL CHANGE (Financial Times)
By John Paul Rathbone, Latin America editor
November 23, 2015

Latin America’s pink tide ebbs further with victory of Buenos Aires mayor

The election of Mauricio Macri on Sunday as Argentina’s new president marks the end of an era for the country and, indeed, for the region as a whole. The bounty that accompanied the commodity boom of the past 12 years is over; leaner times will require more prudent and orthodox economic management. That is as true of the economic populism that characterised the two administrations of Cristina Fernández, Argentina’s outgoing president, as it is of other South American countries with out-of-favour leftist governments, such as in Brazil.

There will also be less populist grandstanding of the sort that Ms Fernández is known for. The centre-right Mr Macri, the son of a wealthy businessman and currently the mayor of Buenos Aires, is certainly a business-like figure. In addition, the commodity price crash has cut down to size the popular appeal of charismatic leaders, such as Ms Fernández, who modelled herself on Evita Perón.

The failures of her populist model, and a widespread weariness with her sharp-tongued and confrontational style, saw to that. The same is true of other recent political movements in South America, such as Chavismo in Venezuela, Lulismo in Brazil and perhaps Evo Morales’ rule in Bolivia.

South America’s so-called “pink tide” is receding.

Still, Mr Macri’s electoral success last night is unusual. He promised change; indeed, his coalition is called “Let’s Change”. That promise helped propel him from a supposedly distant second in the polls just a month ago, to victory last night with 51.4 per cent of the vote. But change to what, exactly; in which areas; and, how?

The economy is the most pressing issue that Mr Macri must address. Inflation is running at double-digits, foreign reserves have collapsed, there are currency controls, the exchange rate is overvalued, the government is shut out of international markets by its long-running court case with holdout creditors, the central bank is printing money to finance the fiscal deficit and the domestic economy suffers from a web of domestic distortions — including energy subsidies that can shrink a household’s monthly energy bills to the price of a cup of coffee.

The hard call that Mr Macri must make is whether to address these macroeconomic distortions in one go — via a shock treatment package of the kind that Argentines have come to know and fear — or more gradually. Both courses have their merits, and Mr Macri’s team of well-regarded economic advisers is reportedly divided on the issue.

Certainly, Argentina will need to have recourse to multilateral financial support at some point — including, presumably, the International Monetary Fund, even though the IMF is indelibly associated in Argentine minds with the country’s calamitous 2002 debt default and devaluation. So far, Mr Macri has said only that he would start to remove capital controls immediately after his inauguration on December 10.

Mr Macri also faces considerable political challenges. He lacks a majority in Congress, although this may not present an insurmountable barrier to the passage of legislation.

In the lower house, with 257 seats, his coalition has more than 90 deputies, and he may be able to count on the support of over 30 dissident Peronists to carry a majority. Mr Macri also lacks a majority in the Senate. But senators traditionally take their lead from Argentina’s powerful state governors who in turn negotiate directly with the president. So, on important issues, such as solving the holdouts issue, Mr Macri should be able to build the support he needs. He has form here, too. As mayor of Buenos Aires, Mr Macri managed to pass laws through the local legislature even though he also lacked a majority there.

Perhaps the biggest area where Mr Macri needs to effect change, though, is in Argentina’s investment climate. Financial investors have cheered Mr Macri’s rise and Argentine stocks and bonds have rallied on the prospect of change. But this rally has been a trader’s plaything. Mr Macri’s job is to convert Argentina into a destination for real money and foreign direct investment rather than a hedge fund speculation. For now, that is only a hope as it would mark a decisive change for a country that, during the past 100 years, is unique in having lost its former “rich nation status”.

But even in Argentina, as Ms Fernández remarked ruefully on her Twitter account last night, “nothing lasts forever.”

Back to contents

12. THE ULTIMATE POLITICAL GOAL (Financial Times)
By Simon Kuper
November 20, 2015

‘Macri struck me as a man of destiny: rich, intelligent, funny. But none of it could have happened without football’

One day in 2001, an Argentine football club chairman came to Oxford to explain how he planned to parlay his success with Boca Juniors into a political career. “The first thing that helps,” Mauricio Macri told our small gathering of academics and strays in his perfect business English, “is that I don’t have to invest any capital to be known. I have 98 per cent recognition.” Better, he added, Boca’s triumphs had given him a reputation for competence. He claimed that even fans of rivals River Plate often said: “The only thing we envy from Boca is the chairman.”

My record of that day in my notebook is headed “Nov. 22”. Tomorrow, exactly 14 years later, centre-right leader Macri is expected to be elected Argentine president in a runoff vote. My only surprise is that he didn’t get there sooner. In Oxford, and at a later meeting in Buenos Aires, Macri struck me as a rather obvious man of destiny: rich, intelligent, handsome, funny, and extraordinarily clear about where he was heading. But none of it could have happened without football.

In Oxford, after a lunch of soggy chops, Macri trampled on centuries of Oxfordian tradition by rigging up a laptop and a slide projector to explain his path. His Italian-born dad, Franco, was a wealthy entrepreneur with many government contracts. Macri had worked for the family company until, aged 36, he was elected Boca’s president. On the slide explaining this move, the first line read: “Independence from my father.”

It sounded like the then American president, George W Bush, who had also lived in his father’s shadow until, aged 42, he became managing general partner of the Texas Rangers baseball club. Bush used his new visibility to get elected governor of Texas, and took it from there. Similarly, Silvio Berlusconi glided from running AC Milan football club to running Italy.

Almost all political language is populist, but that’s particularly true in Argentina. Look at Macri’s compatriot, Pope Francis, now possibly the most popular politician on earth: an aged virgin with 1.2 billion followers, he drives a small Fiat, talks about his beloved San Lorenzo football club, and ends up looking like a regular guy.

Boca was the ideal club to equip rich daddy’s boy Macri with populist credentials. A common phrase says Boca are supported by “50 per cent plus one of all Argentines”. The club’s stadium, the Bombonera, is a stage for mass emotions. As Macri said: “We are so near the players that we generally joke and argue with them during matches. If Freud could come back to earth and go to Boca for an hour, he would say, ‘I have to revise my theories.’”

Macri seems always to have viewed the football circus with a cool outsider’s eye. In Oxford he presented himself as an unabashed manipulator of less rational beings. “The football environment is very primitive,” he told us. “The directors are very contaminated by the microclimate and by internal conflicts.” Macri’s strategy was to steer other people’s vanity and emotion. Early in his reign at Boca, he and coach Carlos Bilardo got rid of several popular players. The fans weren’t pleased, said Macri. “But fortunately we could put most of the damage on Bilardo, because he was a very big figure. He paid the cost. That was very important.” Coaches, Macri explained, function as “fuses — when you lose three matches in a row, you fire them”.

Boca under Macri experienced “its most spectacular cycle in 100 years”. Trophies piled up, and the footballers became vain prima donnas (while always remaining under their agents’ thumbs, noted Macri). Every Monday after another victory, Macri’s marketing people would put out posters mocking River fans as “chickens”. For instance, the chickens might be shown heading for the airport. Why did Boca do that? “This creates craziness,” Macri explained, and craziness sold match tickets.

I left Oxford that day thinking Macri could soon be mayor of Buenos Aires. A month later Argentina’s peso collapsed, and I thought he could be president. In April 2002 I flew to a stricken, terrified Buenos Aires to interview him in a mansion in the wealthy Palermo neighbourhood. Macri was triumphant. He said that crisis-hit Argentines had rejected the “total leadership class” — except Boca’s president. “I am seen as having done a serious and accountable job. My experience has come from the business sector. That is what I applied in the Boca Juniors period, and with results.”

By then he had begun campaigning as a politician. Voters would often ask him about Boca’s planned transfers, or launch spontaneously into the club chant, “Dale Boca!” In 2005 he was elected congressman, and in 2007 mayor of Buenos Aires. Last month, after his surprisingly good performance in the first round of the presidential elections, supporters chanted, “Argentina, Argentina!” as if in a football stadium.

The only thing Macri still lacks is his father’s approval. Franco, now 85, said recently that his son had “the brain to be president, but not the heart”. That was my impression too.

Back to contents

13. ARGENTINES ELECT OPPOSITION CANDIDATE MACRI AS PRESIDENT (USA Today)
By Greg Toppo
November 22, 2015

Argentines on Sunday handed left-leaning President Cristina Fernandez a symbolic defeat by electing opposition leader Mauricio Macri in a historic runoff election.

With most of the votes counted, Macri had 53%, compared to 47% for rival Daniel Scioli, Fernandez’s close ally and chosen successor, the BBC reported. Scioli conceded defeat late Sunday, telling supporters that he had called Macri to congratulate him, The Associated Press reported.

Macri’s victory represents the first time in more than a decade that Argentina’s center-right opposition has wrested the presidency from the center-left Peronists.

Loud cheers erupted at Macri’s campaign headquarters after television exit polls suggested he had won, BBC reported.

Macri, the mayor of Buenos Aires, Argentina’s capital, campaigned on promises to reform and jumpstart Argentina’s economy. He emerged as the front-runner in the race after an Oct. 25 first round of voting that forced a runoff against Scioli, governor of Buenos Aires province. In that round, Macri lost to Scioli, 36.7% to 34.5%. But neither candidate won outright, forcing Argentina’s first-ever runoff.

Macri promised to lead with “21st century development,” as opposed to “21st century socialism,” a term used by supporters of the late Venezuelan President Hugo Chavez and his successor, Nicolas Maduro.

Macri, leader of the Cambiemos (Let’s Change) coalition, is the son of one of Argentina’s richest men.

Scioli, who had initially been expected to win by 10 or more points in last month’s six-candidate election, has said a Macri victory would subject Argentina to the market-driven policies of the 1990s, a period of deregulation that many Argentines believe set the stage for the financial meltdown of 2001-2002.

“This government has helped a lot of people with the social welfare plans,” Carlos Mercurio, a 55-year-old newsstand owner who voted for Scioli, told AP. “I’m afraid of what Macri might do.”

The election comes at a time when Argentina’s economy, Latin America’s third largest, has stalled. Inflation is around 30%, gross domestic product growth is just above zero and many private economists warn that the Fernandez administration’s spending is not sustainable.

Macri had promised to address the economic problems and to shake things up regionally. He said he would push to expel Venezuela from the South American trade bloc known as Mercosur because of the jailing of opposition leaders under Maduro. That would be a huge change for a continent where many countries, including neighbors Chile, Brazil and Bolivia, have left-leaning democratic governments that have maintained close ties with Venezuela.

Macri promised to lift unpopular controls on the buying of U.S. dollars and thus eliminate a booming black market for currency exchange. Doing that would likely lead to a sharp devaluation of the Argentine peso, AP reported.

With low foreign reserves, the government would desperately need an immediate infusion of dollars. Those could come from many different places, but ultimately would require structural changes to a largely protectionist economy, solving the debt spat and developing warmer relations with other nations, including the United States.

Election officials said 74% of registered voters, or about 24 million people, went to the polls. Voting in Argentina is obligatory, but there are exceptions for senior citizens and people who are traveling and can’t get to a polling place, among others.

Back to contents

14. OPPOSITION CAPTURES ARGENTINE ELECTION, ENDING ‘KIRCHNER ERA’ (San Diego Union-Tribune)
23 November 2015

Opposition captures Argentine election, ending ‘Kirchner era’

BUENOS AIRES, Argentina

Opposition candidate Mauricio Macri won Argentina’s presidential election on Sunday, marking an end to the left-leaning and often-combative era of President Cristina Fernandez, who along with her late husband dominated the country’s political scene for 12 years and rewrote its social contract.

Ruling party candidate Daniel Scioli, Fernandez’s chosen successor, conceded late Sunday and said he had called Macri to congratulate him on a victory that promises to chart Argentina on a more free-market, less state-interventionist course.

“Today is a historic day,” said Macri, addressing thousands of cheering supporters as horns were heard blaring across Buenos Aires. “It’s the changing of an era.”

With 98 percent of the vote counted, Macri had 51.45 percent support compared to 48.55 percent for Scioli.

The victory by the business-friendly Macri, who gained a national profile as president of the popular Boca Juniors soccer club, comes after he did better than expected in the first round on Oct. 25. The close first round forced a runoff with Scioli, the governor of the vast Buenos Aires province.

Macri, the outgoing mayor of Buenos Aires, hails from one of the country’s richest families. On the campaign trail, he sometimes talked about being kidnapped in the early 1990s, an experience he said helped him understand the needs of others and he credits with pushing him into politics.

As mayor of Argentina’s most important city, he was known for a technocrat manner that stressed efficiency over style.

He campaigned for president on promises to reform and jump-start the South American country’s sagging economy. He also pledged to lead by “listening more and speaking less” than Fernandez, something he frequently said on the campaign trail.

“I’m so happy,” said Julia Juarez, a 66-year-old retired teacher who was one of thousands watching the returns at Macri’s bunker. “Argentines are tired of this government. Tired of the corruption. We are ready for something new.”

Scioli, who had been expected to win by 10 or more points in last month’s six-candidate first round of voting, tried to regain momentum before Sunday’s runoff by frequently attacking Macri. He said a Macri win would subject this nation of 41 million people to the market-driven policies of the 1990s, a period of deregulation that many Argentines believe set the stage for the financial meltdown of 2001-2002.

Macri’s win signals a clear end to the era of Fernandez, who along with her late husband and predecessor, Nestor Kirchner, rewrote the country’s social contract, gaining both rabid followers and fierce critics along the way. People often refer to their combined years in power as the “Kirchner era.”

The power couple spent heavily on programs for the poor, raised tariffs to protect local economies and passed several progressive laws, including the legalization of gay marriage in 2010.

The Dec. 10 change of power will come at a time when Argentina’s economy, Latin America’s third largest, has stalled. Inflation is around 30 percent, gross domestic product growth is just above zero, and many private economists warn that the Fernandez administration’s spending is not sustainable.

Back to contents

15. WARNING SIGNS ON THE ROAD TO ‘CHANGE’ IN ARGENTINA (The Huffington Post)
By Mark Weisbrot
November 20, 2015

Imagine a U.S. presidential candidate who met with the Russian government and repeatedly accused them of being “too soft” on President Obama. A candidate who told Russia’s foreign minister of the “need to set limits” on the White House’s “misbehavior,” and that the Russians’ “silence” on the “abusive mistreatment it [Russia] suffered” at the hands of the Obama administration “had encouraged more of the same.”

Would Americans trust such a candidate? OK, that’s a rhetorical question. But in Argentina, it’s real.

Mauricio Macri, a right-wing businessman from one of the country’s richest families, is running for president in elections this Sunday. According to leaked documents from the U.S. Embassy, published by WikiLeaks, this is the conversation he had with the U.S. ambassador and the U.S. State Department official in charge of Latin America. He was very concerned that Washington was “too soft” on Argentina and was encouraging “abusive treatment” of the U.S. at the hands of the Argentine government.

The analogy is not perfect, since the current Russian government has never played a major role — or any role, for that matter — in wrecking the U.S. economy and creating a Great Depression here. But the U.S. Treasury Department, which was the IMF’s decider during Argentina’s severe depression of 1998-2002, did indeed exert an enormous influence on the policies that prolonged and deepened that depression. Argentines are not holding a grudge, but neither would they want the U.S. to again play a major role in their politics or economic policy.

But there are other reasons to worry about Macri’s intentions that hit closer to home. In his conversations with U.S. officials, in 2009, he referred to the economic policies of the Kirchners — Néstor Kirchner, who was president from 2003-2007, and his wife Cristina Fernández de Kirchner, who was elected in 2007 — as “a failed economic model.” He has made similar statements during the campaign, and although he has often been vague, he has indicated that he wants something very different, and considerably to the right of current economic policy.

It is worth looking at this much-maligned record of the Kirchners, especially since Daniel Scioli, who is the candidate of Cristina Fernández de Kirchner and her “Front for Victory” alliance, represents some continuity with “Kirchnerismo.” Macri’s coalition is called “Cambiemos,” or “Let’s Change.”

From 2003-2015, according to the IMF, the real (inflation-adjusted) Argentine economy grew by about 78 percent. (There is some dispute over this number, but not enough to change the overall picture.) This is quite a large increase in living standards, one of the biggest in the Americas. Unemployment fell from more than 17.2 percent to 6.9 percent (IMF). The government created the largest conditional cash transfer program in the Americas for the poor. From 2003 to the second half of 2013 (the latest independent statistics available), poverty fell by about 70 percent and extreme poverty by 80 percent. (These numbers are based on independent estimates of inflation.)

But these numbers do not describe the full magnitude of the achievement. As I describe in my book, Failed: What the ‘Experts’ Got Wrong About the Global Economy (Oxford University Press, 2015), Néstor Kirchner took office as the economy was beginning to recover from a serious depression, and it took great courage and tenacity to stand up to the IMF and its allies, negotiate a sustainable level of foreign debt (which involved sticking to a large default), and implement a set of macroeconomic policies that would allow for this remarkable recovery. It was analogous to President Franklin D. Roosevelt’s leadership during the U.S. Great Depression, and like Roosevelt, Kirchner had the majority of the economics profession against him — as well as the media. Cristina Fernández de Kirchner also had to fight a number of battles to continue Argentina’s economic progress.

In the last four years, growth has slowed, inflation has been higher, and a black market has developed for the dollar. Some of this has been due to a number of unfavorable external shocks: the regional economy will have negative growth this year (Argentina’s will be slightly positive); Argentina’s biggest trading partner, Brazil, is in recession and has seen its currency plummet; and in 2014 a New York judge of questionable competence made a political decision to block Argentina from making debt payments to most of its creditors. So, despite the overall track record of 12 years of Kirchnerismo delivering a large increase in living standards and employment, and successful poverty reduction, there are significant problems that need to be fixed.

In 1980, Ronald Reagan ran for president of the United States in the midst of a recession and inflation passing 13 percent. He, too, promised change and he delivered it — and ushered in an era of sharply increased inequality and other social, political, and economic maladies from which America is still suffering. Just look at his proud progeny in the Republican presidential debates.

Macri probably does not have Reagan’s talent as an actor and communicator to radically transform Argentina and reverse most of the gains of the last 13 years. But it seems likely from the interests that he represents, and his political orientation, that Argentina’s poor and working people will bear the brunt of any economic adjustment. And there is a serious risk that by following right-wing “fixes” for the economy, he could launch a cycle of self-defeating austerity and recession of the kind that we have seen in Greece and the eurozone.

The Kirchners also reversed the impunity of military officers responsible for mass murder and torture during the dictatorship, and hundreds have been tried and convicted for their crimes. Macri has dismissed these unprecedented human rights achievements as mere political showmanship. His party also voted against marriage equality, which was passed anyway, making Argentina the first country in Latin America to legalize same-sex marriage.

“Let’s Change” is an appealing slogan, but the question is “change to what?”

Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington, D.C., and the president of Just Foreign Policy. He is also the author of the new book “Failed: What the ‘Experts’ Got Wrong About the Global Economy

Back to contents

16. MACRI TOPPLES ARGENTINA’S PERONISTS, TOUGH REFORMS AHEAD (Reuters News)
By Richard Lough
Nov 23, 2015

Conservative challenger Mauricio Macri turned Argentine politics on its head on Sunday, kicking the ruling Peronist movement out of power with a promise to liberalize the ailing economy and end a culture of divisive politics.

Macri, the son of an Italian-born construction magnate, won the election by tapping into frustration over anemic growth, high inflation and corruption, and will become only the third non-Peronist leader since the end of military rule in 1983.

The other two failed to finish their terms, however, a reminder of the difficulties that Peronist labor unions, state governors and opponents in Congress could cause Macri if he is unable to get the economy growing quickly.

After an unpredictable campaign that pitted poorer Argentines grateful for generous welfare programs against others exasperated with state shackles on the economy, Macri will need to deliver on pro-business reforms without hurting the poor.

“We’ve been saying from Tierra del Fuego in the south to Jujuy in the north that we have to build an Argentina with zero poverty, and that’s what we’re going to do together,” Macri told his jubilant supporters on Sunday night.

Argentine sovereign debt rose on Monday on news of his election, with the 2033 dollar discount bond hitting its highest level since April 2007 US040114GL81=R. While Argentina’s stock market was not yet open for business, the Frankfurt-listed American Depository Receipt of Argentina’s Grupo Financiero Galicia (GGALyb.F) jumped 6.28 percent.

Macri defeated leftist ruling party candidate Daniel Scioli as voters punished outgoing President Cristina Fernandez for her handling of the economy and her abrasive style of leadership.

The 56 year old faces a number of economic challenges. Slow growth is driven by unsustainable spending, inflation is at well above 20 percent and capital controls have backfired to leave foreign reserves at nine-year lows.

The country is also mired in a messy debt default that is blocking access to global credit markets.

Macri, who served two terms as mayor of Buenos Aires, has promised to dismantle a web of currency controls and trade restrictions that have deterred investors and hobbled growth.

Policy changes such as eliminating hefty taxes on grains exports and revamping economic data long viewed as manipulated by Fernandez’s government will be quick hits to underscore his intent to bring change.

But elsewhere he will have to move carefully.

Removing capital controls that have curbed access to dollars and unifying a multi-tiered exchange rate may lead to a sharp devaluation which, while needed to restore trade competitiveness, will likely feed into consumer prices.

In the final stages of campaigning, Macri indicated he favored a more staggered lifting of currency curbs.

“We cannot solve all the problems that this government is leaving behind on the first day,” Macri said ahead of the run-off vote on Sunday.

He is expected to scale back energy and transport subsidies in his first year in order to narrow a yawning fiscal deficit.

Economists estimate about 20 percent of government spending is on subsidies, but weaning Argentines off cheap power and transport may prove unpopular.

HARD TRANSITION AHEAD

“The transition from failed country to global power is likely to be both bumpy and slow,” said Roberto Lampl, Head of Latin American Investments at Alquity Investment Management. “Macri will have to undo twelve years of damage but looks set to prioritize the economy and growth.”

“Today there is an optimism in Buenos Aires which hasn’t been seen for over a decade, change has finally come to Argentina.”

Scioli, a moderate Peronist, had the support of Fernandez loyalists but he failed to convince others he would restore investor confidence at a time when Argentina seeks to exploit vast shale oil and gas reserves.

Even so, his warnings that Macri’s pro-market policies will put the interests of big business ahead of workers, erode salaries and destroy pensions have laid down possible battle lines between Macri and his opponents over the next four years.

“If Macri devalues then people could go out into the streets and protest,” said Scioli voter Ana Marchessi, a 56-year-old lawyer.

Macri’s margin of victory was less than 3 percentage points and his challenge will be to show an economic recovery is taking root by late 2016 or he could face a hammering in a mid-term Congressional elections the following year.

The past two non-Peronist leaders since democracy was restored in 1983 failed to complete their terms.

Both were from the Radical Party. Raul Alfonsin stepped down six months early in 1989 as hyper-inflation raged, and Fernando de la Rua fled the presidential palace in a helicopter during the 2001-02 depression.

Lacking a majority in Congress, Macri is likely to move quickly with his reform agenda during an expected early honeymoon period and try to draw on cross-party support.

He is expected to court the backing of lawmakers loyal to centrist Sergio Massa, who placed third in the first round of the presidential election last month, and other smaller parties to outmaneuver Fernandez hardliners.

Control over discretionary transfers that boost provincial budgets, meanwhile, will give Macri leverage over governors and in turn their senators in the upper house.

His “Let’s Change” alliance will control Argentina’s three main bases of power: the federal government, the populous Buenos Aires province that traditionally was a Peronist stronghold, and the capital city.

“This is a huge shift for Argentine politics,” said Juan Cruz Diaz, head of the Cefeidas Group.

“For years the opposition, controlled by an unsuccessful Radical Party, claimed it was impossible to govern with Peronism in opposition. Macri has a big opportunity to prove that wrong”.

Back to contents

17. ARGENTINA IN FOR A RADICAL POST-ELECTION GRAINS OUTPUT INCREASE (Reuters News)
By Hugh Bronstein
23 November 2015

BUENOS AIRES (Reuters) – By the end of President-elect Mauricio Macri’s first four-year term, Argentina will have doubled wheat shipments and surpassed Russia and Brazil as a corn exporter, by some estimates, as the abandonment of years-long trade restraints unleashes the full potential of the country’s vast Pampas farm belt.

Opposition leader Macri beat ruling party candidate Daniel Scioli in Sunday’s election, effectively ending the eight-year, production-sapping feud between farmers and outgoing President Cristina Fernandez, who clamped down on shipments of food-related grains in a bid to damp double-digit inflation.

Macri, who won the backing of the farm lobby with a broad free-market platform, has promised to eliminate corn and wheat export taxes and ditch the quota system that controls international shipments of both crops. He also wants a more competitive exchange rate.

As a result, farmers are likely to begin alternating more often between soybeans and the other crops, not only boosting corn and wheat output, but nourishing the soil as well, aiding soybean yields in the process.

Soy currently grows on 62 percent of Argentina’s cropland compared with about 25 percent in the United States, according to local analyst estimates.

“I planted only about a third of the wheat and corn that I would have liked to this year,” said Santiago del Solar, who manages thousands of hectares in the bread basket province of Buenos Aires. “And this has happened for the last eight years.” He said improved soil thanks to better rotation should allow for soybean output to rise along with that of other crops. Corn and wheat leave mulch behind, which combats erosion.

“We can lower the risk of erosion to almost zero if we rotate crops the way we want to,” del Solar said.

Corn will see the fastest planting area growth next season thanks to a projected improvement in profitability under Macri’s policies, said agronomist Pablo Adreani, who has analyzed Argentina’s grains sector for more than three decades.

He expects farmers will increase their corn acreage from 3 million hectares this season to 4 million in the 2016/17 crop year. Argentina’s corn exports could surge by 44 percent over the next three years to 23 million tonnes, which would make it the world’s biggest supplier after the United States.

Wheat exports may rise from 4.3 million tonnes this season to 11 million by 2018/19, which would be equivalent to about 6.8 percent of global wheat trade, Adreani said.

Even shipments of soy and its derivatives should rise from 45 million tonnes to 52 million in 2018/19, he says.

Argentine farmers and officials across the political spectrum have whole-heartedly embraced genetically modified soy technology, despite controversy over possible health effects.

Modified seeds have contributed to the explosion of soy production on the Pampas over the last two decades and are expected to remain popular with growers well into the future.

IMMEDIATE ABOLITION

Under Fernandez, who is barred by law from seeking a third consecutive term, the country collects a 23 percent export tax on wheat and a 20 percent levy on corn shipments. Exports of soybeans, of which Argentina is the world’s third-largest supplier, are taxed at 35 percent, a levy Macri vows to cut by 5 percentage points per year starting sometime in 2016. In a bid to ensure ample domestic food supplies and keep prices low, Fernandez established a moving export quota system on wheat and corn, which growers say cuts competition among buyers and generates oversupply of the local market. Macri says he will ditch the quota system immediately after his Dec. 10 inauguration. The term is four years with the possibility of one immediate re-election. Macri’s farm policy team sees a 30 percent rise in Argentine grain and oilseed output to 130 million tonnes by the end of his first term in 2019. “The changes could reposition Argentina as a corn producer, with an exportable surplus second only to the United States, as opposed to now, as fourth behind the United States, Brazil and Russia,” said Gustavo Lopez, head of consultancy Agritrend. Factoring in Macri’s policy platform, Lopez said Argentine corn production is set to rise 57 percent to 33.7 million tonnes by the 2024/25 crop year from 27 million in 2013/14. He projects wheat production to leap 54 percent to 18.3 million tonnes from 9.5 million during the same period, and soy to soar 63 percent higher to 72 million tonnes. A WEAKER PESO

Whether the world will crave those increased supplies is another question. International prices are down as grains reserves climb.

Global corn, soybean and wheat ending stocks are projected by the USDA to be the largest ever by the end of the 2015/16 season, following record or near-record crops in the U.S. and South America.

But Argentina’s farmers may be better placed to compete next year thanks to Macri’s pledge to allow the overvalued peso to devalue.

Just as the strong U.S. dollar has made doing business more expensive for U.S. farmers, a cheaper peso would help their Argentine counterparts. “Competitiveness will be restored over the medium- and long- term with the modification of the exchange rate,” said Ernesto Ambrosetti, economist with the Argentine Rural Society (SRA), which represents the country’s biggest farms. He said SRA members are counting on Macri to not only reduce export taxes and ditch the quota system, but to help the sector by reducing Argentina’s double-digit inflation rate and eliminate crop transport bottlenecks by improving highways and paving rural roads that wash out when it rains. “Corn and wheat will start occupying a bigger area,” Ambrosetti said. “That rotation will set the stage for sustainable productivity.”

Back to contents

18. ARGENTINA ELECTIONS: MAURICIO MACRI POISED TO BE NEXT PRESIDENT (CNN)
By Catherine E. Shoichet, CNN
Sun November 22, 2015

(CNN)—Opposition candidate Mauricio Macri is poised to become Argentina’s next President after a runoff vote that marks the end of a political dynasty.

“Thank you for believing in me. … I am here because you have decided,” a triumphant Macri said from his campaign headquarters Sunday night as throngs of supporters erupted in cheers.

“Today is a historic day,” he said, “a new era.”

Macri spoke shortly after Daniel Scioli, Argentine President Cristina Fernandez de Kirchner’s hand-picked successor, conceded defeat.

With more than 98% of votes counted, Macri of the Let’s Change coalition had won 51.4% of votes, while Scioli had garnered nearly 48.6%, elections officials said.

Closely watched vote

For Fernandez, who’s slated to leave office in December after eight years at the helm, Sunday’s closely watched vote was a test of whether her populist political legacy would endure.

For a region where leftist movements have played a growing role, it’s an election that could shift the balance of power.

And for the finance world, it’s a long-awaited moment that could change how the South American country handles its debt problems and interacts with Wall Street.

The election of Macri, a center-right candidate who’s mayor of Buenos Aires and the former president of the Boca Juniors football club, could signal a conservative shift for Argentina. Macri has said he wants to rewrite the playbook on Argentina’s economy — a campaign promise that made him popular on Wall Street and drew sharp criticism from his opponents.

In his victory speech Sunday night, Macri promised he’d work to eliminate poverty in Argentina and change the way business is done.

“I also want to say to our Latin American brothers and our brothers around the world, that we want to have good relationships with all countries,” he said. “We want to work with everyone. We know that the Argentine people have much to bring to the world, and we hope to find an agenda of cooperation.”

Scioli:

As she tried to convince voters to support Scioli, Fernandez noted her family’s legacy, referring to her two terms as President and the four years her husband, the late Nestor Kirchner, served as Argentina’s leader.

“We have never had a period of government of 12 and a half years with this social and economic stability and of constant progress,” she said.

And Scioli, who many had been expecting to sail to an election victory during the first round of voting in October, launched attack ads against Macri in the days leading up to the runoff and invoked the name of Pope Francis as he encouraged voters to head to the polls Sunday.

Their efforts to drum up a surge in support weren’t enough to give Scioli the victory he was seeking.

In a somber speech from his campaign headquarters as votes were still being counted Sunday night, Scioli acknowledged that the margin between him and his opponent was too large to overcome. But he vowed to keep pushing for the ideals Fernandez and her husband espoused.

“I have given the best in me, with passion, as I usually do, convinced that our proposal to the Argentine people was the best option. The people, in this runoff, have chosen differently,” he said. “Now I, from wherever it may be, will still defend an ideal, a country project that started 12 years ago.”

The state-run Telam news agency reported late Sunday that Fernandez had congratulated Macri for his election win and planned to meet with the president-elect Tuesday.

Back to contents

19. WHY WALL STREET CARES A LOT ABOUT ARGENTINA’S ELECTIONS (CNN Wire)
By Patrick Gillespie
22 November 2015

NEW YORK (CNNMoney) — Wall Street hedge funds have been waiting years for this day.

Argentina elected a new president Sunday. The change in government could finally end a decade-long battle between the hedge funds and Argentina over huge debt payments.

Cristina Fernandez de Kirchner, and her predecessor and late husband, Nestor, have governed the country for 12 years. They’ve refused to pay the hedge funds the entire time.

That fight was a major issue heading into Sunday’s elections.

Both candidates, Mauricio Macri and Daniel Scioli, suggested they would resolve the debt problems with the hedge funds.

Late Sunday night, Scioli conceded defeat after early results placed Macri in the lead.

The two candidates offered different solutions to the debt crisis. Scioli said he would have maintained some of Kirchner’s policies, while Macri vowed to rewrite the playbook on Argentina’s economy.

But settling with the holdouts, along with implementing new reforms, will likely hurt Argentina’s economy in the short term, expert say.

“Argentina appears to be at a crossroads,” says Win Thin, head of emerging markets currency strategy at Brown Brothers Harriman. “After years of economic mismanagement, the people could finally vote for a change of government but the economic adjustment will be painful.”

The unresolved debt debacle has shut out Argentina from much of the global economy while it has suffered from massive inflation, declining cash reserves and meager economic growth.

Wall Street was rooting for Macri to win. He has promised major economic reforms and appears most likely to settle with the holdouts.

Macri was in second place during the first round of voting in October, behind Scioli. But the results, which surprised many, were too close in the first round, prompting Argentina’s first ever runoff election. And after the October election, Macri gained favor in the polls.

Argentina’s record-breaking default and the ‘vultures’

The hedge funds, led by the billionaire Paul Singer, want about $1.5 billion from Argentina.

Argentina broke the record books when it defaulted on $95 billion of debt in 2001.

Singer’s fund, NML Capital, and others scooped up the nearly-worthless debt soon after the default, then waited while the debt gained value and now they want full repayment.

Over the years, the Kirchners renegotiated terms with 92% of its creditors so that they would accept a huge discount, or “haircut,” on debt payments.

These hedge funds are called vultures for picking up cheap, worthless debt of developing countries, then suing them afterward for much more money.

Argentina has offered to pay creditors 30% of the face value of the debt. Singer doesn’t want that, even though his fund already stands to profit from the rising value of the debt.

Singer wants full repayment. And a New York judge, Thomas Griesa, agrees with him.

In fact, Argentina tried to pay the creditors that agreed to the lower amount, but Griesa blocked the payment last year. The judge said that Argentina has to pay the holdouts and other creditors at the same time. Negotiations between Argentina and NML last year failed to reach an agreement.

Until Argentina settles with the holdouts, its economy essentially can’t grow much because it can’t get access to foreign investment.

Another problem is that Argentina, under Kirchner, has manipulated its currency, started massive spending programs and lost the trust of many independent economists inside and outside the country.

Investors can’t wait for a new president but they clearly prefer Macri. Argentina’s stock index, Merval, is up 66% so far this year, and experts say the rally is largely driven by optimism that the next president will resolve the dispute and open up Argentina’s economy to foreign investment.

“If [Macri] prevails, the outlook for the economy would undoubtedly brighten,” says Edward Glossop, an emerging markets economist at research firm Capital Economics. “The prospects for reform are higher now than at any point over the past decade.”

Back to contents

20. ARGENTINA ELECTS PRO-BUSINESS PRESIDENT; BIG CHANGE EXPECTED (Bloomberg News)
By Charlie Devereux
November 23, 2015

* Mauricio Macri, mayor of Buenos Aires, promises rapid shifts
* Plans to lift currency controls, cut taxes, deal with debtors

Argentina voted for deep change on Sunday, electing the center-right opposition leader Mauricio Macri to be president in a decisive end to 12 years of leftist populism, setting the stage for economic liberalization, a warming of relations with the U.S. and political reverberations across Latin America.

The candidate of the ruling party, Daniel Scioli, conceded defeat and called Macri to congratulate him. With more than 98 percent of the ballots counted, Macri had 51.5 percent, while Scioli followed with 48.5 percent, according to the National Electoral Council.

At Macri’s headquarters late on Sunday, cumbia music boomed, balloons were released and supporters danced and cheered for “Macri Presidente.” Ernesto Sanz, a lawmaker and ally, said, “Argentina won’t be the same starting tonight.”

“A wonderful new stage begins for Argentina,” Macri told his supporters in his victory speech.

The 56-year-old mayor of Buenos Aires is a wealthy businessman and former head of one of the country’s most popular soccer teams. He has promised to lift currency controls and negotiate with hedge fund creditors to boost investor confidence amid the lowest reserves in nine years. He will also focus on cutting inflation, fixing the largest fiscal deficit in 30 years and luring back international investment dollars.

In anticipation of a Macri victory, bond yields fell to an eight-year low and the local stock market rallied to a record high. The rally continued after the vote. The benchmark securities due in 2033 gained to a price — which includes interest owed since last year’s default — of 114 cents on the dollar, an eight-year high. The Global X MSCI Argentina ETF rose 0.5 percent in German trading.

’Savage Capitalism’

Scioli and his supporters have warned that such policies, which they dismiss as “savage capitalism,” will erode vital social welfare programs on which the poor depend and create an economy that caters to the rich. Macri will govern with a minority in both houses of Congress, although he is bolstered by the surprise capture of Buenos Aires province in last month’s election.

He also will have the support of many of the country’s 32 million voters — 81 percent of them took part on Sunday — who say they are tired of the rule of President Cristina Fernandez de Kirchner which they consider often dishonest.

“The government is constantly saying we live in paradise,” said Santiago Canedo, 28, a law student who voted for Macri. “They say one thing and then do the next. I’m optimistic that things will change.”

Argentina, under Fernandez and her deceased husband Nestor Kirchner for the past dozen years, has stood shoulder-to-shoulder with other leftists in the region, including the Castro brothers in Cuba, Nicolas Maduro in Venezuela and Rafael Correa in Ecuador. Macri calls his approach the opposite of Venezuela’s “21st century socialism”: “21st century development.” He has threatened to have Venezuela ousted from regional bodies over its anti-democratic policies and human rights abuses.

Regional Swing?

Those countries, as well as Brazil, rode a wave of commodity price highs — in oil, corn, soybeans — leading to a string of leftist victories. They are now suffering from the collapse of those prices and Macri’s victory in South America’s second largest economy could augur a rightward regional swing, including stepped-up pressure to impeach President Dilma Rousseff of Brazil. Legislative elections are due in Venezuela on Dec. 6 and the opposition is leading in all polls.

Fernandez, who will hand over power to Macri on Dec. 10, has used a number of levers to promote her policies, including seizing pension fund assets and the nation’s largest energy company while increasing welfare programs and battling U.S. hedge funds over defaulted debt.

There is skepticism in some quarters about Macri’s ability to govern. This is because he will not have a congressional majority and because he is not from the Peronist movement which has, in effect, ruled Argentina for most of the past seven decades using populist tactics of both right and left. One result of this election will be a crisis within Peronism as the movement charts its next moves.

Painful Changes

“The first months, as a way of showing what’s to come, are going to be very important to assuage some sectors that have doubts over Macri’s capacity to govern,” observed Lorena Moscovich, a political scientist at the University of San Andres in Buenos Aires. She said he needed to move quickly during his honeymoon period to push through the most painful changes. No non-Peronist has finished his term in office since the movement was founded in the 1940s by Juan Peron.

Scioli, who during his campaign pledged to maintain several of Kirchner’s policies, won the first round on Oct. 25 with 37 percent to Macri’s 34 percent. But he had been expected to do far better, with many forecasting he would take the presidency with the 10-percent spread required by law to avoid a runoff. Instead, Macri nipped at Scioli’s heels and then stole the momentum that sent him to the presidential palace known as the Casa Rosada, or pink house.

Investors continued to express enthusiasm about Argentina’s economic future.

“It’s probably the most obvious country in the world to make the transformation from where it is to where it could be to reach its potential with the least amount of struggle,” remarked Tim Love, investment director of GAM, an asset management firm. “You’ve got it all and you’ve got a working democracy. This is a lay-up compared to the other frontier markets I deal with in the world.”

Back to contents

21. SCIOLI HANDS VICTORY TO OPPOSITION’S MACRI IN ARGENTINE RUNNOFF (Bloomberg News)
By Charlie Devereux
November 22, 2015

* Macri has 53.1 percent with 74 percent of votes counted
* Macri has vowed to end currency controls, cut export taxes

Argentina’s ruling party candidate conceded defeat to Mauricio Macri, even before official results from Sunday’s runnoff election were released, as exit polls gave victory to the opposition.

“The popular will has chosen a new president, Mauricio Macri. The people have elected an alternative,” Scioli told supporters in his campaign headquarters.

The win for Macri, who has vowed to unravel Argentina’s currency controls and trade protectionism, ends 12 years of rule by Cristina Fernandez de Kirchner and her late husband.

The son of a construction tycoon who went on to become president of Boca Juniors soccer club before serving two terms as mayor of Buenos Aires, Macri has also said he will end Argentina’s financial isolation following the 2001 default by resolving a legal battle with creditors.

Investors had anticipated a victory for Macri, with bond yields falling to an eight-year low and the local stock market rallying to a record high last week.

Back to contents

22. ARGENTINA FEVER IS BACK FOR INVESTORS AFTER WAIT OF 14 YEARS (Bloomberg News)
By Katia Porzecanski
November 23, 2015

* Kirchner rival, Macri, defeats pro-government candidate Scioli
* Zucaro: “We’re super positioned here, long and strong”

Sunday’s election of opposition candidate Mauricio Macri marks a moment investors have been waiting for in Argentina for a long time.

In the 14 years since the country carried out the biggest default the world had ever seen, international investors watched an economy that had long been one of their favorites turn into a pariah in global capital markets. Under the Kirchners — first Nestor and then his wife, Cristina — Argentina became best known for its byzantine foreign-exchange system, the seizure of privately-owned assets and the under-reporting of inflation.

All that could change now. Macri, a 56-year-old Buenos Aires native, is pledging to quickly reverse much of the Kirchners’ policies and open up an economy that’s posting back-to-back years of almost zero growth.

Investor excitement is tangible, a rarity nowadays in a region that’s suddenly fallen out of favor.

Companies, including Germany’s BayWa AG and Brazil’s BRF SA, are prepping to expand their presence in the country and Argentina’s benchmark stock index soared 30 percent in the past three months as traders anticipated a Macri victory. Even the country’s defaulted debt — the government fell back into default last year on legal grounds stemming from the 2001 debacle — has been rallying, with prices on benchmark bonds climbing well over par value. Eager to reinsert the country in foreign markets, Macri has said that settling the old debts will be a top priority after he’s sworn in as president on Dec. 10.

“We are optimistic,” said Jody LaNasa, the founder of the $1.5 billion hedge fund Serengeti Asset Management, which owns Argentine securities. “The question is whether this is going to be something like the rebirth of Argentina or another failed dream that people get excited about, but then they can’t overcome the challenges.”

The challenges indeed are substantial: foreign reserves are at a nine-year low; prices on the country’s commodity exports are depressed; the budget deficit is soaring to the widest in three decades; and inflation, as tallied by private economists, is running at an annual pace of more than 20 percent.

Macri’s victory over the pro-government candidate, Daniel Scioli, is seen in part as an expression of Argentines’ frustration with the economy under the Kirchners. With 98 percent of the ballots counted, Macri, a two-term mayor of Buenos Aires and wealthy businessman, had 51.5 percent of the votes while Scioli took 48.5 percent. Minutes after Scioli conceded the race, Macri addressed his supporters, telling them that “a wonderful new stage begins for Argentina.”

Argentine bonds extended their rally. The benchmark securities due in 2033 gained to a price — which includes interest owed since last year’s default — of 114 cents on the dollar, an eight-year high. The Global X MSCI Argentina ETF rose 0.5 percent in German trading.

The return to growth that his backers, and foreign investors, are anticipating won’t be immediate. If anything, analysts are warning that things could get worse initially as the new president implements the kind of tough measures — cuts to the budget, a devaluation of the peso — that figure to further choke off consumer demand. Oxford Economics says gross domestic product will likely contract the next two years before rebounding to post growth of more than 5 percent by 2019.

This is not the first time, of course, that foreign investors have piled into Argentina. In a country that was once one of the world’s richest (back around the turn of the 20th century), there have been countless booms and busts. Most recently, the nation became the darling of the investing world in the 1990s, when President Carlos Menem tamed hyperinflation, sold off state assets and opened up the economy.

At the height of that boom, Argentina posted back-to-back years of growth topping 10 percent. But mistakes were made too and the go-go days wouldn’t last. By the late 1990s, the rigid currency peg system that had worked so well in taming inflation years earlier was undermining economic growth.

Hamstrung by the recession and unnerved by bloody protests sweeping Buenos Aires, the government defaulted on $95 billion of bonds in 2001 and devalued the peso weeks later.

The collapse fueled resentment toward free-market policies and propelled the Kirchners into office. That sentiment lasted long enough to allow Cristina Fernandez de Kirchner to succeed her husband in 2007 (and win re-election in 2011) but would ultimately fade too. Despite a surge in overseas prices for Argentine commodities during much of the past decade, the peso lost 70 percent of its value under their rule.

Now it’s Macri’s turn.

There’s no shortage of big-name investors — George Soros, Daniel Loeb and Richard Perry, to name a few — betting on him successfully resolving the debt dispute and regaining access to international credit markets. To pull that off, Macri will have to reach a settlement with the billionaire hedge-fund manager Paul Singer, who’s long refused to relinquish his bonds from the 2001 default at the deep discount that Argentina imposed on other creditors.

While the Kirchners couldn’t get themselves to negotiate with Singer, their long-time nemesis, most expect Macri to show no hesitation in initiating talks. What may ultimately prove a tougher test is trying to get a divided congress to back the austerity measures he wants to implement.

“I just worry about the political machine,” said Ray Zucaro, chief investment officer at RVX Asset Management, a Miami-based investment firm. Still, Zucaro said he’s optimistic. “We’re super positioned here, long and strong.”

Back to contents

23. ARGENTINA ELECTS PRO-BUSINESS PRESIDENT; BIG CHANGE EXPECTED (Bloomberg News)
By Charlie Devereux
November 23, 2015

* Mauricio Macri, mayor of Buenos Aires, promises rapid shifts
* Plans to lift currency controls, cut taxes, deal with debtors

Argentina voted for deep change on Sunday, electing the center-right opposition leader Mauricio Macri to be president in a decisive end to 12 years of leftist populism, setting the stage for economic liberalization, a warming of relations with the U.S. and political reverberations across Latin America.

The candidate of the ruling party, Daniel Scioli, conceded defeat and called Macri to congratulate him.

With more than 98 percent of the ballots counted, Macri had 51.5 percent, while Scioli followed with
48.5 percent, according to the National Electoral Council.

At Macri’s headquarters late on Sunday, cumbia music boomed, balloons were released and supporters danced and cheered for “Macri Presidente.” Ernesto Sanz, a lawmaker and ally, said, “Argentina won’t be the same starting tonight.”

“A wonderful new stage begins for Argentina,” Macri told his supporters in his victory speech.

The 56-year-old mayor of Buenos Aires is a wealthy businessman and former head of one of the country’s most popular soccer teams. He has promised to lift currency controls and negotiate with hedge fund creditors to boost investor confidence amid the lowest reserves in nine years. He will also focus on cutting inflation, fixing the largest fiscal deficit in 30 years and luring back international investment dollars.

In anticipation of a Macri victory, bond yields fell to an eight-year low and the local stock market rallied to a record high. The rally continued after the vote. The benchmark securities due in 2033 gained to a price — which includes interest owed since last year’s default — of 114 cents on the dollar, an eight-year high. The Global X MSCI Argentina ETF rose 0.5 percent in German trading.

’Savage Capitalism’

Scioli and his supporters have warned that such policies, which they dismiss as “savage capitalism,” will erode vital social welfare programs on which the poor depend and create an economy that caters to the rich. Macri will govern with a minority in both houses of Congress, although he is bolstered by the surprise capture of Buenos Aires province in last month’s election.

He also will have the support of many of the country’s 32 million voters — 81 percent of them took part on Sunday — who say they are tired of the rule of President Cristina Fernandez de Kirchner which they consider often dishonest.

“The government is constantly saying we live in paradise,” said Santiago Canedo, 28, a law student who voted for Macri. “They say one thing and then do the next. I’m optimistic that things will change.”

Argentina, under Fernandez and her deceased husband Nestor Kirchner for the past dozen years, has stood shoulder-to-shoulder with other leftists in the region, including the Castro brothers in Cuba, Nicolas Maduro in Venezuela and Rafael Correa in Ecuador. Macri calls his approach the opposite of Venezuela’s “21st century socialism”: “21st century development.” He has threatened to have Venezuela ousted from regional bodies over its anti-democratic policies and human rights abuses.

Regional Swing?

Those countries, as well as Brazil, rode a wave of commodity price highs — in oil, corn, soybeans — leading to a string of leftist victories. They are now suffering from the collapse of those prices and Macri’s victory in South America’s second largest economy could augur a rightward regional swing, including stepped-up pressure to impeach President Dilma Rousseff of Brazil. Legislative elections are due in Venezuela on Dec. 6 and the opposition is leading in all polls.

Fernandez, who will hand over power to Macri on Dec. 10, has used a number of levers to promote her policies, including seizing pension fund assets and the nation’s largest energy company while increasing welfare programs and battling U.S. hedge funds over defaulted debt.

There is skepticism in some quarters about Macri’s ability to govern. This is because he will not have a congressional majority and because he is not from the Peronist movement which has, in effect, ruled Argentina for most of the past seven decades using populist tactics of both right and left. One result of this election will be a crisis within Peronism as the movement charts its next moves.

Painful Changes

“The first months, as a way of showing what’s to come, are going to be very important to assuage some sectors that have doubts over Macri’s capacity to govern,” observed Lorena Moscovich, a political scientist at the University of San Andres in Buenos Aires. She said he needed to move quickly during his honeymoon period to push through the most painful changes. No non-Peronist has finished his term in office since the movement was founded in the 1940s by Juan Peron.

Scioli, who during his campaign pledged to maintain several of Kirchner’s policies, won the first round on Oct. 25 with 37 percent to Macri’s 34 percent. But he had been expected to do far better, with many forecasting he would take the presidency with the 10-percent spread required by law to avoid a runoff.

Instead, Macri nipped at Scioli’s heels and then stole the momentum that sent him to the presidential palace known as the Casa Rosada, or pink house.

Investors continued to express enthusiasm about Argentina’s economic future.

“It’s probably the most obvious country in the world to make the transformation from where it is to where it could be to reach its potential with the least amount of struggle,” remarked Tim Love, investment director of GAM, an asset management firm. “You’ve got it all and you’ve got a working democracy. This is a lay-up compared to the other frontier markets I deal with in the world.”

Back to contents

24. CHANGE COMING TO ARGENTINA AS POPULIST POLICIES RUN OUT OF STEAM (Bloomberg News)
By Charlie Devereux
November 20, 2015

* Opposition’s Macri has solid lead over ruling party’s Scioli
* Economic changes expected even if race goes in unpredicted way

Four weeks ago, it was widely expected that the next president of Argentina would be the candidate of the ruling party. But in a first-round election that stunned the nation, opposition leader Mauricio Macri stole the momentum, and as voters return to the polls on Sunday the presidency looks like his to lose.

Macri is the more market-friendly candidate and global companies are lining up to invest, persuaded that the country will reopen for business since he is leading the ruling Peronist party’s Daniel Scioli by 6 to 8 percentage points. Up to a tenth of voters remain undecided, however, and polls were off a month ago, so there is room for surprise.

A central plank of Macri’s policies is the immediate lifting of currency controls to boost investor confidence amid the lowest reserves in nine years. Scioli says Macri’s plan would lead to a massive devaluation that would destroy purchasing power and fuel inflation already running at 24 percent.

In reality, the state of the economy will dictate austerity measures from either candidate, said Diego Ferro, co-chief investment officer at Greylock Capital Management.

“Argentina unfortunately doesn’t implement changes when it should, only when it has to and there is no doubt that next year they will have to implement changes regardless of who wins,” Ferro said by phone from New York.

Elephant In The Room

Neither candidate has addressed the elephant in the room: the reforms needed to reduce inflation, fix a fiscal deficit of 7.2 percent of gross domestic product – the largest in over 30 years – and lure back investment dollars which have stayed away due to currency controls, a lack of regulatory predictability and a decade-long dispute with holdouts from the 2001 default.

The men have put forth different images, with Scioli claiming the populist mantle. Campaigning on Thursday, he said the election is between Macri, whom he called “an arrogant guy from Barrio Parque,” an exclusive neighborhood in Buenos Aires, and him, the son of a worker who understands the needs of the people.

Both candidates will nonetheless probably prescribe a similar recipe, albeit with distinct dosages, analysts predict.

Macri says he will seek to end the holdout conflict that caused Argentina to default once again last year. He will eradicate tariffs on grain exports and reduce the 35 percent tax on soybeans, Argentina’s largest source of export revenue, by 5 percent a year. He also pledges to bring inflation to below 10 percent in two years and to restructure the statistics agency after the International Monetary Fund censured Argentina for misreporting economic data.

Scioli, while defending the legacy of President Cristina Fernandez de Kirchner, is promising similar changes in the agricultural sector while saying inflation will take a full four-year term to tame. Seeking to contrast himself to Macri, he says he will continue to protect Argentina’s industrial sector by sticking with the policy of a peso whose exchange rate is administered by the central bank.

Markets React

Markets have already reacted to a likely Macri win, cushioned by the knowledge that a Scioli victory would also be an improvement on the status quo.

The stock market is at a record high, bond yields are at their lowest in eight years and Morgan Stanley is advising soybean producers to sell their stock now in anticipation of a post-electoral glut.

Both candidates will not only change economic policy but the way that the government handles its trade partners, its opponents and its communications, said Juan Gabriel Tokatlian, of the University of Torcuato Di Tella. What will differ is the pace.

Fernandez’s eight years have been characterized by standoffs — with farmers over export taxes, international trade partners over import restrictions and the country’s middle class over access to buying dollars. All of those will likely ease, irrespective of who wins. The fact that 12 years of rule by Fernandez and her deceased husband Nestor are ending is creating a buzz of possibility.

Argentina’s prospects are promising but getting there will not be a smooth ride. The transition will be challenging for the next government, Mauro Roca, chief economist at Goldman Sachs & Co wrote in a note to clients Thursday. Macri’s aggressive approach risks an overshooting of the exchange rate and spike in inflation while Scioli risks missing the boat if he delays the necessary corrections for too long, Roca said.

“Whereas there is some consensus about the promising medium-term economic prospects, there is less clarity about the challenging transition,” Roca said. “Due to the magnitude of the necessary corrections and inevitable political restrictions, policy reforms will be subject to significant implementation risks.”

Both candidates will face challenges in finding consensus to implement changes. Macri will govern with a minority in both houses of Congress, although he is bolstered by the surprise capture of Buenos Aires province in last month’s election which has caused fractures in the Peronist alliance. Scioli will have to distance himself from the rhetoric of continuity that has dominated his campaign, said Greylock Capital’s Ferro.

“There is no ambiguity in the case of Macri and that’s one of the reasons why the market was so happy, because we know that from moment zero there will be a coherent plan to get Argentina out of its problems,” Ferro said. With Scioli, “we will get there but it will take longer.”

Back to contents

25. GOOD MORNING MACRI: WHAT ARGENTINA’S NEW DAWN MEANS FOR INVESTORS (Forbes)
By Chris Wright
November 23, 2015

It’s official. Mauricio Macri made harder work of it than polls had expected, but he achieved just over 51% of the votes in last night’s run-off compared to just under 49% for Kirchner candidate Daniel Scioli. He is the new elected president of Argentina. So now what?

“Regardless of the tight margin, the elections send a strong message that a majority of Argentinians favour a change,” says Alejandro Hardziej, fixed income research analyst at Julius Baer. “Macri recognises the need to boost the competitiveness of the corporate sector and exports, and has promised business-friendly reforms to spur investments.”

Macri is seen as a pro-business leader, and some of his intended priorities include lifting capital controls and liberalising the exchange rate (to a point, anyway), which Hardziej says in practice means depreciating it by between 20 and 50% to a level closer to the unofficial exchange rate through which most Argentines access dollars anyway.

But it is not going to be easy. “Many of his adjustments will be unpopular and hard to implement as the central bank has very limited international reserves, the government is running a large deficit and private estimates place annual inflation above 25%,” Hardziej says. Low commodity prices don’t help, and not just in Argentina: they are making an already bad situation worse in Brazil, which is Argentina’s main trading partner.

Nevertheless, the fact that it’s going to be a tough road has not stopped fund managers from reacting brightly. “Argentina has voted for change and today marks an excellent first step in finally achieving this goal,” says Roberto Lampl, head of Latin American investments at Alquity Investment Management. Lampl doesn’t hide his views on the Kirchner era, calling it “12 years of disastrously toxic Kirchernismo”, and says the new government “can offer Argentina a brighter future.”

Still, he’s not expecting fast change either. “The transition from failed country to global power is likely to be both bumpy and slow,” he says. But he doesn’t think the inevitable currency devaluation will hinder progress – clearly better for exports, for a start – and believes that Macri will normalise relations with the capital markets, “and start attracting the all-important foreign investors.”

That, of course, means concluding the long-standing dispute over Argentina’s default in 2001, whose fractious recent manoeuvres you can read about here and here. Resolution would allow Argentina access to the international capital markets once again, which would bring a host of benefits not just to the sovereign but to every bank and corporate that would price against its curve.

“The nation remains resource rich and Argentina still boasts vast agricultural resources as well as a highly educated population,” says Lampl. “Today there is an optimism in Buenos Aires which hasn’t been seen for over a decade. Change has finally come to Argentina and not a moment too soon.”

Back to contents

26. WITH A NEW PRESIDENT ARGENTINA MIGHT GET A DECENT ECONOMIC POLICY AGAIN (Forbes)
By Tim Worstall
November 23, 2015

Argentina hasn’t been doing well economically recently. This is because economic policy has been the usual disastrous interference with markets and prices common to the left in Latin America. Too much of that and you get Venezuela. Have just a little bit and you get the situation in Argentina: where they seriously threatened to jail some economists for privately trying to work out what the real inflation rate was. The results of yesterday’s election are now in and it’s the Conservative who won, Macri, and the country might finally get more reasonable, sensible even, economic policy.

“ Mauricio Macri, the Conservative opposition candidate, won Argentina’s presidential election on Sunday after promising business-friendly reforms to spur investment in the struggling economy.

Quite how silly the current policy is can be seen here:

“ Macri, 56, has promised to get rid of the nation’s controversial price control system, which applies to more than 400 supermarket items.

Price fixing just doesn’t work well as that Venezuelan example shows. Because prices shift so as to balance supply and demand. If you price fix below that market clearing price then there will be less supply than there is demand: shortages. And that’s what people do do when they price fix. So, when we have price fixing we get shortages. There’s nothing mysterious about this, there’s no plotting, no cabals of the capitalists exploiting the situation. It’s simply reality: the market price is the market clearing price and trying to change that through legislation just leads to the market not clearing.

“ Under Kirchnerism, the state has exercised greater control over the economy, imposing heavy taxes on agricultural exports. Macri has said he wants to reduce the state’s role in the economy. He has promised more pro-business policies, as well as a realignment of Argentina’s foreign policy away from Venezuela and Iran and closer to the USA.

He also wants to scrap currency controls and make it much easier for Argentines to change their local pesos into U.S. dollars —that would likely require the country’s central bank to increase its currency reserves.

All entirely sensible things. And they will help. For there’s absolutely no real reason why Argentina shouldn’t be a rich country. Back a century it was: about as rich as the US was then. And for much the same reason, vast amounts of fertile land and a well educated population to exploit it. The only reason that the country has been slipping down the wealth rankings since has been that it has been cursed with a near century of bad economic policy.

Back to contents

27. CHALLENGER WINS ARGENTINE RUNOFF (Dow Jones Institutional News)
By  Juan Forero  and  Taos Turner
23 November 2015

BUENOS AIRES — The conservative mayor of Buenos Aires, Mauricio Macri, was elected president of Argentina on Sunday, in a win seen as a rejection of departing leader Cristina Kirchner’s interventionist economic policies and a turn to the right after 12 years of leftist rule.

With 90% of votes counted by the electoral authority on Sunday night, Mr. Macri, the candidate of the Let’s Change opposition coalition, had 52.2%, ahead of ruling-party candidate Daniel Scioli with 47.8%. Mr. Scioli acknowledged “the will of the people” in a dramatic speech late Sunday.

Minutes later, Mr. Macri, in a victory speech before euphoric crowds, said, “Today is a historic day,” adding, “We need to build an Argentina with zero poverty. A marvelous phase is beginning for Argentina.”

The winner’s platform resonated with an electorate weary of a stagnant economy and high inflation. Mr. Macri, 56 years old, promised to revive the economy after a drop in commodities prices halted growth and rising government spending fueled inflation. The country faces recession next year, according to the International Monetary Fund.

“He will open up the economy and be very welcoming to foreign investors and domestic investors,” said Susan Segal, president of the New York-based Council of the Americas, a policy group that closely follows business issues here. She offered praise for Mr. Macri’s economic advisers. “They understand the world and they understand why it is important for Argentina to be integrated into the global economy.”

Mr. Scioli came out on top in the first round of voting on Oct. 25, but didn’t get enough support to win outright. Just before the first-round vote, pollsters had predicted he could win the final runoff as well. But Mr. Macri received far more support than expected in the first round, triggering a runoff. He then took the momentum from Mr. Scioli.

Mr. Macri has signaled that he aims to improve frayed ties with the U.S.

“We want to have good relations with all countries,” he said. “We expect to build an international agenda based in cooperation.”

He said he would seek to have Venezuela expelled from the Mercosur trading block because of political prisoners jailed in that country, a position that would make him the first Latin American leader to call for tough action against Venezuelan President Nicolas Maduro. Other countries in the region — most of them led by leftist governments — have remained silent about alleged rights abuses of Mr. Maduro’s opponents.

Mr. Scioli, 58, governor of Buenos Aires province and Mrs. Kirchner’s choice to succeed her, had said he would maintain the various social programs — from pensions for poor laborers to support for worker cooperatives — created by the Kirchner administration.

But pollsters said Argentines were disillusioned by rising crime and weary of what they see as a combative government that had polarized this country of 40 million.

Carlos Salcedo, 54, who described himself as a common laborer, said corruption — frequently covered in newspapers — as well as high food prices and crime were among his main concerns.

“They just think of themselves,” he said of the ruling Victory Front coalition. “That is why I voted for change.”

Mr. Macri, a wealthy businessman who for 12 years headed the famed Boca Juniors soccer club here, will have to confront a host of economic problems.

Central-bank reserves are at a nine-year low. Argentina can’t access international credit and inflation is the second-highest in Latin America. Mrs. Kirchner recently added loyal ruling-party members to a government payroll that economists say is bloated. She has also encouraged the sale of U.S. dollar derivatives by the central bank to contain rising demand for greenbacks, a move Mr. Macri’s advisers say could cost the country billions.

While voting, Mrs. Kirchner defended the administration’s accomplishments since her late husband and predecessor Nestor took over the presidency in 2003.

“There has never been a period in government with such tangible economic progress,” Mrs. Kirchner told reporters at a polling station in her Patagonian hometown of Rio Gallegos. “It would be painful to see these achievements being eroded.”

Mrs. Kirchner’s allies in her Peronist movement have warned that the coming of Mr. Macri would mean deprivation, unemployment and economic disaster, assertions he denied.

They also reminded voters that under non-Peronists — in 1989 and 2001 — Argentina was rocked by economic calamity and social turmoil.

Buenos Aires schoolteacher Laura Lemes recalled budget cuts by Mr. Macri in his time as mayor.

“Teachers in the capital went through a lot of suffering,” she said. “We had to stage a very tough fight to secure wage increases. He thinks we are ranch hands.”

Mr. Macri, who has been sharply critical of Mrs. Kirchner’s handling of the economy, has promised extensive changes. He has said he would negotiate with foreign bondholders who have sued Argentina for failing to repay billions of dollars — a plan Mrs. Kirchner has publicly criticized. He also vowed to scrap currency controls that have generated a thriving black market for dollars.

Mr. Macri’s victory would have been a surprise just a month ago. Some pollsters then had predicted Mr. Scioli could win the first-round vote on his way to succeeding Mrs. Kirchner, who steps down Dec. 10.

He still could have won in this round. But in a debate between the two men in mid-November, Mr. Scioli failed to score the victory analysts said he needed to kick-start a faltering campaign.

Polls show that the high disapproval rate that had long dogged Mr. Macri, who was derided by some voters for his patrician background, dissipated in recent weeks.

Mr. Macri also avoided discussing specific policy adjustments, which scare Argentines concerned that broad overhauls of the economy will hurt them. Instead, he had focused on how he would bring efficient government and economic growth.

“We can live in an Argentina without poverty, where we can all aspire to have our own homes with running water and a sewage system,” Mr. Macri said on Thursday at his last campaign event.

The messages appealed to people like Leon Tobal, 52.

“I got tired of this government, especially the lack of security,” he said, speaking of Mrs. Kirchner’s government. He said the shop he runs has been robbed three times in a month and that he had seen increased poverty, leading him to vote for Mr. Macri.

Another voter, Nestor Shenkis, 33, said he chose Mr. Macri, too, because of the inflation.

“They gave me a raise in January, but the costs nearly doubled,” he said. “Yesterday I went to buy bread and it rose 20%” over the previous week.

More than 60% of voters believed that Mr. Macri had “moved his platform to the center,” according to a recent poll by Buenos Aires-based Consultora Wonder. That helped attract voters who are traditionally close to Argentina’s Peronist movement.

Back to contents

28. ARGENTINA’S MARKET RALLIES AHEAD OF SUNDAY ELECTION (Investor’s Business Daily)
By Alan R. Elliott
23 November 2015

Optimism ran cautiously higher in Argentina last week, as the country approached Sunday’s runoff election for president. The Buenos Aires exchange’s benchmark Merval index ran nearly 3% higher Friday, giving it a 7.3% gain for the week. The market has rallied 25% since Argentina held its general election on Oct. 25.

That election returned a strong showing for business-friendly challenger Mauricio Macri, vs. Daniel Scioli — the candidate groomed by outgoing president Cristina Fernandez de Kirchner. Optimism that Fernandez’s populist, top-down policies may give way to a more market- and export-driven economy has, in the interim, buoyed investor sentiment.

The country’s investors have often been wrong. The market rallied on expectations of regime change in October 2010, after Fernandez’s husband, Nestor Kirchner, died of a heart attack. President of the country from 2003 to 2007, he had remained an influential actor after his wife’s election in October 2007. Despite the market’s optimism, Kirchner was re-elected by a strong majority in October 2011.

This time around, at least for agricultural exporters, any change is welcome.

Both Macri and Scioli say they will ease tariffs and taxes on agricultural exports, most importantly, soybeans. Both also promise to attack rampant inflation, but with Scioli taking more of a slow-burn approach.

Macri pledges to undo currency curbs that have severely limited overseas interest in Argentina’s economy, tamped consumer spending and hamstrung financial institutions.

He also aims to dismantle the concerns caused by the debt standoff that followed the country’s 2001 default.

The Merval has had a roller-coaster year. It rose 44% to mid-July, then fell 25% through September. It was up 32% for the year when it began its October rally, and now holds a 66% year-to-date gain.

Among Argentina-based issues trading on U.S. markets, bank holding company Grupo Financiero Galicia (NASDAQ:GGAL) jumped 9% this week to a new high. The stock cleared a 26.23 cup-base buy point in late October.

Banco Macro (NYSE:BMA) spiked 9%, also to a new high.

Online marketplace MercadoLibre (NASDAQ:MELI) and oil producer Petrobras Argentina (NYSE:PBR) each traded 3% higher for the week.

Back to contents

29. ARGENTINES HEAD TO POLLS TO DECIDE PRESIDENTIAL RUN-OFF (NPR: Weekend All Things Considered)
22 November 2015

MICHEL MARTIN: More politics now, this time in Argentina. Argentines voted today in the country’s first-ever runoff presidential election. Two candidates are facing off in this second round of voting. We’re expecting to hear the results soon, as the polls have closed for the day. And at stake is the leadership of the country with Latin America’s third-largest economy. NPR’s South America correspondent Lourdes Garcia-Navarro will tell us more. Hi, Lulu.

LOURDES GARCIA-NAVARRO: Hi there.

MARTIN: So do you want to tell us about what neighborhood you’re in and what people are saying?

GARCIA-NAVARRO: Yeah, I’m in Buenos Aires. It’s a really lovely, almost summer day here. And we’ve been seeing people going to the polling stations all day. The sitting president, Cristina Kirchner, she just cast her vote. And she did not stay quiet. She spoke for almost half an hour to the press, calling it a historic election which was made possible by her government’s economic and political policies – so of course, campaigning to the last – even though she is not up for re-election. Her chosen successor who’s running today is behind in the polls, and the people I spoke to who are going to vote for the opposition and the right-of-center candidate say they want change.

MARTIN: Tell us a little bit more about her. She has a favorite candidate in the race, so tell us a little bit about him, and then tell us about the frontrunner.

GARCIA-NAVARRO: Yeah. Daniel Scioli is the anointed successor of Cristina Kirchner. He’s former governor of the province of Buenos Aires. He’s promising continuity with Kirchner’s policies. And that means, you know, social spending, spending on programs that have targeted the poor. But the fight right now is between people who want change or continuity. The right-of-center candidate is Mauricio Macri. He’s the son of a wealthy construction magnate. He’s the former president of a famous soccer club here. He cut his political teeth as the mayor of Buenos Aires. So what makes his candidacy so electrifying for many is that he comes from sort of outside the political ideology of Peronism. And that’s been the sort of overwhelming philosophy in Argentina since the 1940s. And this really could mean that we will see some profound political changes if he wins.

MARTIN: So talk a little bit more about that. People are calling this – and you mentioned that the current president – the outgoing president – is noting how important this election is. People have been calling it the most important vote in a generation. Why is that?

GARCIA-NAVARRO: Yeah. You know, the Kirchners – Christina and her late husband Nestor – have been these overwhelming powers in politics in Argentina for the last twelve years. They even have sort of a movement named after them – Kirchnerism. They call her Queen Cristina here. She is just this sort of larger-than-life figure. And we now see opposition politicians in many key political positions inside Argentina for the first time in a long time, and they are right of center. So if the right of center takes the presidency, we’re going to see some drastic changes, say analysts. You have to remember Argentina’s economy is in trouble right now. People really remember only 15 years ago, there was a big economic crisis that plunged 60 percent of the population into poverty, so there’s a lot at stake. And people are really, really concerned about the future of Argentina. And so there is a real sense that the vote matters because these two candidates represent two very different paths for the country.

MARTIN: Before we let you go, one assumes then that there are implications for U.S. policy. Can you talk a little bit about that?

GARCIA-NAVARRO: Yeah. I mean, you know, Argentina under Cristina Kirchner has not had a good relationship with the United States. She’s been a vocal critic. And Mauricio Macri – the right-of-center candidate who might win – he’s already said that he’s going to be taking a lot harder line against Venezuela and its leftist leadership, for example. And analysts say he will be a much better ally of the United States.

MARTIN: That’s NPR’s Lourdes Garcia-Navarro in Buenos Aires. Thank you.

GARCIA-NAVARRO: You’re welcome.

Back to contents

30. FACTBOX: ARGENTINA’S PRESIDENTIAL CANDIDATES AND THEIR POLICIES (Reuters News)
22 November 2015

BUENOS AIRES (Reuters) – Argentines vote in a presidential election on Sunday billed as a choice between continuing free-spending leftist populism or a swing toward free markets to fix the South American country’s ailing economy. [L1N13G0G8]

The front-runner is opposition challenger Mauricio Macri, a two-term mayor of capital city Buenos Aires and founder of the “Let’s Change” alliance, who promises pro-business reforms and an end to the confrontational leadership style of outgoing President Cristina Fernandez.

He faces candidate Daniel Scioli, a moderate Peronist from the ruling Front for Victory Party who talks of the state maintaining a strong role in Latin America’s No. 3 economy while promising gradual changes to improve the investment climate.

Fernandez is barred by law from seeking a third straight term.

Below are key facts about each of Sunday’s candidates:

DANIEL SCIOLI

* A 58-year-old former power-boat champion who lost an arm in a crash in 1989, Scioli is the two-time governor of Buenos Aires, Argentina’s most populous province. He is married to an ex model.

* A former vice-president to Nestor Kirchner, Fernandez’s late husband and predecessor, Scioli had been favored to win the election in the first round. But Macri’s surprisingly strong showing dealt him a hammer blow from which he has struggled to recover, trailing Macri in the opinion polls.

* Scioli has portrayed the run-off as a choice between a strong state as the guarantor of prosperity or a weak state that favors free markets and austerity. He depicts Macri as a right-winger who puts corporate interests before workers’ rights.

* He rejects the idea of an abrupt currency devaluation and defends the central bank’s management of the official exchange rate. He vows to keep generous energy and transport subsidies.

* Nonetheless, Scioli is viewed as more investor-friendly than Fernandez. He talks of gradual monetary reform and denies the country faces a crunch on foreign reserves.

* In public, Scioli says negotiating a deal with U.S. “holdout” creditors suing over unpaid debt is not a priority. But in private his close advisors acknowledge Argentina needs access to financial markets and say Scioli would tap global credit markets once an agreement is reached.

* In a flurry of last-minute policy pledges, Scioli has promised to increase pensions, send in the army to fight narco-gangs and restore credibility to the government’s economic statistics agency.

MAURICIO MACRI

* Macri, 56, the son of an Italian-born construction magnate, became a household name in the 1990s as president of the fabled Boca Juniors soccer club. He cites his kidnapping in 1991 – his father reportedly paid a multi-million dollar ransom – as a trigger for a career in public service.

* Macri founded and leads the center-right Republican Proposal party (PRO). After eight years as mayor of the capital, he is popular for cutting traffic, improving waste collection and sprucing up parks.

* Macri has campaigned on a platform of change. He promises to begin dismantling capital controls on his first day in office to win investor confidence and bring hard currency into the dollar-starved economy. He will eliminate export taxes on corn and wheat and gradually reduce duties on soy shipments.

* Other campaign pledges include restoring the independence of the central bank and judiciary, tackling corruption and nepotism in public offices and revamping the discredited national statistics agency.

* Macri has won increasing support in low-income urban neighborhoods, traditional bastions of Peronist support but where some voters have become frustrated with decaying infrastructure and rising crime.

* He has criticized Fernandez’s failure to settle with Argentina’s creditors in the United States. A deal with the holdouts would be a priority, his advisors say, although he would haggle hard.

Back to contents

31. COULD A SOLUTION BE CLOSE FOR ARGENTINA’S STANDOFF WITH HOLDOUT FUNDS? (Business News Americas)
20 November 2015

A group of international banks led by JP Morgan is exploring strategies to resolve the stalemate between Argentina’s government and holdout funds – called “vulture funds” by detractors – which would allow the country back to international capital markets and open the door for other deals.

Also taking part in the initiative are HSBC, Citibank and Deutsche Bank, according to local paper La Nación, although JP Morgan declined to comment.

“The idea is to propose something similar to what the local banks had put forward, but which broke down at the last moment,” a source was quoted as saying by La Nación. “This time international banks will really commit money to tempt the holdouts to negotiate, and also include the me-too bondholders,” the unnamed source added.

JP Morgan may be considering offering the next Argentine government a “negotiation package”, which would include a US$5bn loan and the option of an additional US$10bn from other lenders. With international reserves running out, the incoming government will need US dollar-funding soon, even if negotiations with the holdouts take months.

Investment bank Goldman Sachs could also be looking for alternatives, according to La Nación: “Argentina will need the money in the short term. The banks know that arranging a solution with the holdouts is the key for larger deals”.

A solution to the holdout funds’ demands is calculated to require debt restructuring or issuances for at least US$20bn.

Whoever wins in the election runoff this Sunday November 22 is expected to begin a new approach to the debt dilemma. Daniel Scioli’s advisors have reportedly confirmed that Argentina must negotiate with holdouts and close the issue, while Mauricio Macri, the favorite, said: “we have to go and negotiate so they can’t say that you don’t pay your debts.”

Back to contents

32. 6 BIG WATER PROJECTS AWAITING SCIOLI OR MACRI (Business News Americas)
20 November 2015

Whoever wins Argentina’s runoff election – Mauricio Macri or Daniel Scioli – the next president will be required to look at various water supply projects, some of which have stalled due to financing issues, while others require intergovernmental support, and in one case, a dialogue with neighboring Chile.

The following projects are water systems under construction or planned for construction in Argentina in 2016, requiring total investment of approximately US$2.9bn. The projects can be found in BNamericas’ projects database.

COLORADO WATER SYSTEM

Budgeted at US$184mn, the project involves the construction of a 120km pipeline to draw water from the Colorado river to supply the cities of Bahía Blanca and Punta Alta in Buenos Aires province.

The Colorado system has been under planning since 2011, while Latin American development bank CAF approved a US$150mn loan for the project in late 2014. The federal and provincial governments indicated they would cover the balance, although the project has stalled in the lead-up to the election.

Outgoing President Cristina Fernández announced in June that planning was underway for a second phase of the Colorado system, signaling an investment of 1.4bn pesos (US$142mn)

RECONQUISTA WATER SYSTEM

The Reconquista water system consists of a 350km distribution network, a water treatment plant and water intake infrastructure.

Phase I works were put out to tender in 2011, while tenders for phases II and III came later as Sante Fe province had to line up external financing from the Opec Fund for International Development and the Kuwait Fund for Arab Economic Development (KFAED).

Budgeted at 385mn pesos, phase III received five bids in June although the contact has yet to be awarded.

TULUM WATER SYSTEM

The long-delayed Tulum water system has been in the works since early 2011, with San Juan province having had difficulty securing financing for the US$100mn project.

The 16km pipeline will double water supply for San Juan city.

San Juan officials have been meeting to coordinate public works plans, while Sergio Uñac is to assume as governor in December.

Tulum is also to receiving KFAED financing.

RIBERA-TIMBUÉS

The project consists of a 40km water pipeline that would benefit roughly 420,000 residents in an area between the cities of Santa Fe and Rosario.

Design studies have been carried out although financing for the project has yet to be secured.

Local elected officials had sought to finance the projects with a KFAED loan, although the financing ultimately was directed towards other water projects, including the Reconquista system.

SANTA CRUZ-FORMOSA WATER SYSTEMS

In October, Argentina’s planning ministry and Formosa province announced two major water projects, the 10bn-peso Formosa water development system and the 11.7bn-peso Santa Cruz water system.

The Santa Cruz system entails two water pipelines totaling 538km, with water intake infrastructure to be built at lake Buenos Aires, which is shared with Chile where it is known as lake General Carrera. Understandably, some in Chile have challenged the project while President Michelle Bachelet is said to have personally requested information on the plans.

The Formosa system (pictured) entails 500km of underground piping to draw water from the Paraguay river at provincial capital Formosa. The system would supply approximately 200,000 residents and provide irrigation for around 150,000ha.

Both projects are due to be in the tendering phase by December, while Chinese and Russian firms are expected to win the contracts given that the works are being partially financed through credit agreements reached between Argentina, China and Russia.

Back to contents

33. ALBERTO NISMAN CONSPIRACY THEORIES FLY AS ARGENTINE ELECTION NEARS (NPR: All Things Considered)
By Lourdes Garcia-Navarro
20 November 2015

ARI SHAPIRO: NPR’s Lourdes Garcia-Navarro is in Argentina to cover Sunday’s presidential election there, and she’s found conspiracy theories still swirling around the death of Alberto Nisman. He was the prosecutor found dead with a bullet to his head right before he was to give what he said would be explosive testimony about Argentina’s president. Lourdes sent this report on the status of that case.

LOURDES GARCIA-NAVARRO: It wasn’t so long ago the tens of thousands of people took to the streets in Buenos Aires calling for clarity in the death of Alberto Nisman. Ask anyone these days about him though, and this is typical of the reaction you’ll get…

MARTIN BOHMER: Uh, Nisman…

GARCIA-NAVARRO: That’s Martin Bohmer, a lawyer who knew Nisman. There’s a simple reason for his sigh of frustration. It’s been 10 months since the prosecutor died and there still has been no ruling on whether he was killed or he committed suicide.

BOHMER: All that I can say is that there’s a lot of suspicion.

GARCIA-NAVARRO: Here’s a quick refresher on the case. Alberto Nisman was the lead prosecutor investigating a deadly terror attack on a Jewish community center in 1994. Nisman believed that Iran was behind the attack, and he was working to prove it. Right before his death, he was about to present what he said was evidence to Congress that charged that the President Kirchner and her ministers were trying to cover up Iran’s involvement in return for lucrative trade deals.

ROMINA MANGUEL: (Foreign language spoken).

GARCIA-NAVARRO: Romina Manguel is an investigative journalist who’s been closely following the Nisman saga. She says there’s a huge battle right now between the prosecutor’s office investigating Nisman’s death and Nisman’s family.

MANGUEL: (Foreign language spoken).

GARCIA-NAVARRO: “The two sides are looking at the same forensic reports,” she says, “the same evidence, and one says it’s black and the other says it’s white.” She says the prosecutor’s office is leaning towards calling Nisman’s death a suicide. The family claims it was cold-blooded murder.

MANGUEL: (Foreign language spoken).

GARCIA-NAVARRO: Manguel says there are many unexplained aspects to the case. For example, there are missing instant messages that were wiped from Nisman’s phone.

“Who wiped them and when?” she asks. Also she says a video surfaced showing police and investigators contaminating the crime scene and sloppily collecting evidence. She says she suspects that the investigation has dragged on because his death is so politically loaded.

MANGUEL: (Foreign language spoken).

GARCIA-NAVARRO: “Any investigator will tell you the first 24 hours after a death,” she says, “is key to the investigation. It’s now 10 months later. It’s like sand in our hands,” she says. “Everything we might’ve known is slipping away.”

MANGUEL: (Foreign language spoken).

GARCIA-NAVARRO: Manguel says, “in that vacuum, a lot of other interests start muddying the waters. So this is the latest twist. Not only is Nisman’s death being investigated, but so now is Nisman himself. Bank accounts in his name have been discovered with substantial sums that were undeclared. Where did that money come?”

Manguel says focusing on his finances is part of a campaign to discredit him and therefore make solving his death less vital, but others say this shows Nisman was far from being an altruistic seeker of truth.

JORGE ELBAUM: (Foreign language spoken).

GARCIA-NAVARRO: Jorge Elbaum is a former director of one the most powerful Jewish organizations in Argentina. He’s now a vocal critic of Nisman. He says Nisman was in the pay of right-wing Jewish groups allied with the U.S. Republican Party to scupper the nuclear deal with Iran. Elbaum contends that is why Nisman was intent on blaming Iran for the Jewish community center bombing.

PABLO GITTER: (Foreign language spoken).

GARCIA-NAVARRO: Pablo Gitter is the head of one of the groups for the victims of that Jewish community center bombing. He thinks the Nisman money comes from slush funds run by Argentina’s intelligence apparatus.

So pretty much all we know for certain, almost a year later, is that Alberto Nisman is dead. Lourdes Garcia-Navarro, NPR News, Buenos Aires.

Back to contents

34. ARGENTINA TEMPTS BIG MONEY MANAGERS AGAIN; STOCKS AND BONDS HAVE RALLIED AHEAD OF PRESIDENTIAL ELECTION ON HOPES OF MORE STABLE ERA FOR INVESTORS (The Wall Street Journal Online)
By Christopher Whittall
20 November 2015

After years of neglecting Argentina, some of Europe’s biggest money managers are returning to the country ahead of a presidential election this weekend that some hope will usher in a more stable era for investors.

Argentina has long been the preserve of speculative and distressed-debt investors amid a stagnant economy and a continuing dispute with international bondholders that has locked Buenos Aires out of international debt markets.

But stocks and bonds in Argentina have rallied sharply since the business-friendly mayor of Buenos Aires, Mauricio Macri, won enough votes in late October to secure the first presidential runoff in the country’s history this Sunday.

Various polls have since indicated that Mr. Macri is the front-runner in the race over Daniel Scioli, the ruling party’s candidate. This has boosted the hopes of foreign investors that the country can move on from 12 years of rule by President Cristina Kirchner and her late husband, Néstor, which, they say, have hurt the economy.

Some of the managers in emerging market investment centers, like London, now hope Mr. Macri will reverse Kirchner administration policies of aggressive money printing, currency controls and high government spending.

“A Macri victory…will be a real break from the Kirchner years and the poor policy decisions we’ve seen across the board,” said Denise Prime, a London-based emerging-market investment specialist at Swiss money manager GAM Holding, which oversees 124 billion Swiss francs ($122 billion) in assets.

Ms. Prime said her firm has recently increased its investments in Argentina by buying some local-currency debt, which has a yield of around 80%, for the first time since before the 2008 financial crisis.

GAM has also bought American depositary receipts, a type of stock certificate issued by non-U.S. companies on U.S. exchanges, in Pampa Energia, the county’s largest electricity country. The investment is a bet that a Macri victory should lead to a repeal of cap on domestic electricity costs, Ms. Prime said.

A handful of hedge funds, including Brevan Howard Asset Management, Redwood Capital Management LLC and Perry Capital LLC, have also put money into the country.

But big-name institutional funds returning to Argentina is a sign that longer-term money is making the same bet.

To be sure foreign investors also believe there is much to remain concerned about in Argentina.

The Argentine economy has barely grown in recent years and the International Monetary Fund expects its gross domestic product to contract 0.7% next year. The country has significant economic problems, including one of the world’s highest inflation rates of around 25%. Investors are also expecting Buenos Aires to devalue its currency, with analysts estimating the peso to be around 40% overvalued against the dollar.

A failure to strike a deal with holdouts from a 2001 debt restructuring, meanwhile, has blocked Argentina’s access to international bond markets to raise more money.

But some investors have been slowly building up positions in Argentine stocks and bonds despite the concerns.

Argentina’s main stock index, the Merval, has risen by more than 25% over the past month.The gap between the yield on dollar-denominated Argentinian government bonds and U.S. Treasurys has narrowed from a recent peak of 7.6% in early 2015 to 4.8% as of November 19, according to the Argentina subindex of the J.P. Morgan Emerging Markets Bond Index Global, a level last seen in early 2011.

“They obviously have spent a lot of time in default, but their economy is not as messy as some of their neighbors’,” such as Venezuela, said Viktor Szabo, a fund manager at Aberdeen Asset Management, which oversees £307 billion ($469 billion).

“In Argentina you have a private sector that can stand alone without government support,” he added.

Mr. Szabo started buying dollar-denominated government debt in 2014 on hopes that a deal with bond holdouts would be reached.

A U.S. court has barred Argentina from making payments to international bondholders until it has paid a small group of hedge funds that didn’t consent to a restructuring after the country’s 2001 debt default.

Mr. Szabo has recently increased his investment in Argentine debt, and switched out of bonds governed by local laws into riskier U.S. law bonds on the expectation a deal will be reached by mid-2016.

Earlier this year Claudia Calich bought bonds issued by the Province of Buenos Aires and state-run oil company YPF SA for her fund at M&G Investments. The bonds have been one of her best returning investments so far in 2015.

The outcome of the weekend’s elections will be very important, said Ms. Kalich, whose firm manages £248 billion in assets.

Still, “anybody that comes in is going to be better than the existing government,” she added.

Back to contents

35. QUIET DATA CRUNCHER AIMS TO BRING SENSE TO RAUCOUS ARGENTINE RACE (The New York Times)
By Jonathan Gilbert
22 November 2015

BUENOS AIRES — With his fusty corduroy blazer, diffident mien and unpolished website, Andy Tow, an anonymous civil servant with a flair for data crunching, is emerging as an unlikely rock star of Argentina’s election season.

Mr. Tow, 45, spends his days assisting a congressman, often performing mundane tasks like answering phones or booking flights. But in the evenings, he morphs into a prodigious statistician who tells the complicated stories of domestic politics by turning raw data into online graphics. This rare pursuit has been winning Mr. Tow influence — and some ire — among scholars, pundits and, now, even voters.

”It’s an addiction; I do it all for artistic love,” he said over lunch at a coffee shop opposite the congressional palace here. ”It used to be more underground. I never gave it much publicity. I’m just mad about computing and numbers.”

As Argentines muse on a tight race for the presidency before they go to the polls for a runoff election on Sunday, Mr. Tow’s passions and, more recently, his Twitter account are catapulting him beyond his usual niche audience to a wider public.

”I like the way he uses scientific criteria to analyze the progress of the election race,” said Lisardo Versellino, 56, an administrative worker who discovered Mr. Tow on Twitter. ”It contrasts with the mainstream news media, which trivializes and simplifies the dispute for power.”

Many Argentines are now turning to Mr. Tow and his digital maps demonstrating voting trends for help deciphering the political landscape. Peers have described his work as ”titanic,” and fan mail litters his inbox.

”It’s like he’s clearing a path through the election season’s din of opinions,” said Jimena Cufré, 23, a university student who first learned of Mr. Tow when she saw him on television.

Mr. Tow’s rise to prominence reflects paradigm shifts over recent years in political science and other fields, like business, where demand has boomed for the harnessing of computers’ growing sophistication to pick out trends from abundant data.

In Argentina, however, political scientists have lagged in this respect. There is a preference among scholars here for philosophical discussion, according to Ernesto F. Calvo, an Argentine politics professor at the University of Maryland.

”There’s an enormous deficit of systematic statistical analysis in Argentina,” Mr. Calvo said. ”He’s the only one filling the gap.”

This recognition is a long way from the prolonged lull Mr. Tow experienced about 13 years ago when he was sent to work assisting an idle congressional committee that investigated cash outflows from Argentina.

”I spent many hours alone in the office waiting for something to happen,” he said. ”I wasn’t going to waste my time or watch pornography when I could be doing something useful.”

By 2008, Mr. Tow said, a map he produced, which depicted patterns of road blockades by farmers protesting moves to raise taxes, was being cited by the local news media. He would later help build a popular website revealing how Argentina’s federal lawmakers have voted on various issues. Mr. Tow also worked for more than a decade unraveling and visualizing voting data as he compiled a so-called electoral atlas — but it received only muted applause.

These days, Mr. Tow has no trouble attracting attention to his work. His graphics have become so highly regarded this election season that when he restricted access to his website’s archive this year, he received 4,000 emails requesting the password. And a political news website recently paid him more than $2,000 to syndicate his charts and maps.

The dynamics of the presidential election campaign, including President Cristina Fernández de Kirchner’s stepping down because of term limits and the opposition’s momentum, have also fueled wide interest in his work.

His success has come even as statisticians here have been stymied by faulty official data, especially unreliable economic data like inflation measures for which Argentina was scolded by the International Monetary Fund, and unavailable poverty estimates.

This month, Mr. Tow started an election simulator, which allows Argentines to permute the distribution of the more than seven million swing votes that Daniel Scioli, the candidate for Mrs. Kirchner’s governing party, or Mauricio Macri, who is leading the opposition, must win in the runoff.

Some users of the simulator have found it captivating enough that one popular pundit, Juan Pablo Varsky, equated it to an addictive drug. It even spawned spin-off versions.

Like many other posts on Mr. Tow’s website, the idea came to him while he was loafing about at home.

”I created the simulator because I was bored on Saturday night,” said Mr. Tow, a politics graduate and self-taught computer programmer.

He said he was inspired by a similar tool that was popular during France’s runoff election in 2012. ”I remembered that and thought, ‘Why don’t we try one now?’ ” he said.

But it was a poll aggregator, called La Borra, that thrust Mr. Tow into the spotlight. He started it as Argentines obsessively debated whether Mr. Scioli would beat Mr. Macri by a large enough margin in a first round of elections, held last month, to avoid the runoff.

Mr. Tow, whose full first name is Andrés, collated the results of more than 20 pollsters, regularly updating La Borra as new polls were released. The aggregator quickly became popular among politics buffs and economists.

In the past, Mr. Tow, a timid man, had relished calculating algorithms and researching mapping systems from the obscurity of his living room, accompanied by his cat.

When he did promote his work, it was among a devoted following of bloggers or at local meetings of data journalists and computer programmers.

However, public acclaim gradually seduced Mr. Tow. Soon enough, he was appearing more frequently on television and radio programs.

”Unmasking the data is the thing that drives me,” Mr. Tow said.

”But there’s also a little bit of going after glory, prestige, fame and popular approval.”

The pinnacle came last month when Horacio Verbitsky, one of Argentina’s most influential journalists, gave lengthy mention of Mr. Tow and La Borra in a newspaper column, praising his work as ”meticulous.”

But Mr. Tow’s fast rise left him susceptible to a precipitous fall. And his poll aggregator, La Borra, fell hard. It had suggested a first-round victory for Mr. Scioli, but Mr. Macri upended predictions by taking the election to a runoff.

Political commentators had placed so much emphasis on La Borra that when it failed, Mr. Tow faced a barrage of abuse.

”I had a very rough time,” Mr. Tow said. ”There were lots of accusations that I was a fraud.”

Mr. Tow said that Argentines misunderstood La Borra, and that it had, in fact, been successful in highlighting the perils of being shepherded by polls, especially after they proved misguided in other elections this year in Britain, Israel and Greece.

He pointed to the tool’s name, a Spanish term for ”dregs,” which he chose after dining at an Armenian restaurant here. Traditionally, the thick dregs of a post-meal Arabic coffee would be interpreted to offer clues about the future.

”I thought, ‘This can’t be used to predict anything with precision,’ ” he said, referring to the poll aggregator. ” ‘It should be read like coffee dregs.’ I didn’t want people to clutch at it.”

Despite the heavy criticism, Mr. Tow’s work is still followed closely, and he received a grant to build an application based on La Borra for the region.

His efforts have gotten heightened attention in the final stretch of the campaign, but he has played down perceptions that he is fast becoming the premier statistician of Argentine politics.

”All the information is public,” Mr. Tow said.

”The only thing I do is gather the pieces and assemble the jigsaw.”

Back to contents

36. FROM THE BEAGLE CHANNEL TO BUENOS AIRES, ARGENTINA IS LAND OF VIVID CONTRASTS (The Philadelphia Inquirer)
By Toby Zinman
22 November 2015

TIERRA DEL FUEGO, Argentina – Literary pilgrimages are the kind of journey I find thrilling: climbing dark stairs in St. Petersburg to see the desk where Dostoevsky finished The Brothers Karamazov just before he died; seeing the “snotgreen sea” of Ulysses from Joyce’s Martello tower in Dublin; sitting on the same stone seats on which Sophocles sat watching a play at the amphitheater at Epidaurus; gazing at the plum tree in Hampstead under which Keats wrote “Ode to a Nightingale”; adding a pebble to the many on Kafka’s tombstone in Prague; walking five miles – after the bus dropped me off – along a country road to reach Yeats’ Tower, where he wrote The Tower; visiting Liszt’s dusty living room, nearly filled by a piano, in Budapest; standing in the ruins of Tintern Abbey on a misty morning in Wales, a copy of Wordsworth clutched in my hand.

My recent trip to Argentina took me to its vibrant capital, Buenos Aires, where I had been invited to give a university lecture. It also took me almost 1,500 miles farther south, through the windswept wilds of Patagonia to the archipelago Tierra del Fuego, the end of the inhabited world. The name means “Land of Fire” after the Yamana, Yaghan people who wore no clothes but kept fires lit everywhere, even in their canoes, and who warmed themselves by rubbing their skin with seal blubber. Last I heard, one Yamana woman was still alive.

In the port city of Punta Arenas in neighboring Chile, I boarded the larger of two small luxury ships, the Stella Australis, capacity 200 passengers. But this was offseason, so there were only 80 of us and a crew of 64, creating a wonderfully coddling four-day voyage.

These two are the only cruise ships permitted to sail in the Beagle Channel, so nature is visible in all its unoccupied glory. The channel – named for the HMS Beagle survey bark that carried naturalist Charles Darwin through there in 1834 – is a notoriously dire strait. I was prepared with patches to prevent seasickness, but the waters were remarkably calm.

My pilgrimage paid homage not only to Darwin, but also to Ferdinand Magellan, the 16th-century Portuguese explorer who circumnavigated the globe and for whom the Straits of Magellan are named. In a rare opportunity, we landed a Zodiac inflatable boat and walked on Cape Horn, a rock rising 1,400 feet above the sea where the Atlantic and the Pacific meet. It is farther south than the Cape of Good Hope in Africa (on which I have also stood). If you took a boat from Cape Horn, you could go around the planet and find nothing but water.

Buenos Aires, a lively, crowded city of nearly three million, has both a splendid opera house and a charming 19th-century Café Tortoni, where one orders hot chocolate with churros (divine, crispy, deep-fried dough) at a table next to the one where the great Argentine author Jorge Luis Borges customarily sat. There is the goofy, colorful pedestrian neighborhood called La Boca, and stately, wide, traffic-filled boulevards.

I gave the lecture on Samuel Beckett’s Waiting for Godot at Universidad de Buenos Aires. The campus looked, as somebody said, like Paris in 1968: political graffiti, posters of Che, makeshift bookstalls selling used philosophy books and homemade sandwiches. When the bare lecture hall lacked sufficient chairs, people sat on the floor.

Worth noting: All education in Argentina is free, from kindergarten through medical school.

Buenos Aires stands in amazing contrast to the endless empty miles of pampas, the huge ranches called estancias, desolate land punctuated by an isolated tiny house where a gaucho – the Argentine cowboy – lives.

In another contrast, Ushuaia on Tierra del Fuego, the southernmost city in the world, is a resort boom town. From its beginnings as a prison colony, it now is full of overpriced shops and apartment buildings, with snow-peaked mountains looming above.

Food. Argentina’s obsession with beef is matched only by its sweet tooth. There is a lovely caramel goo called dulce de leche, which is everywhere, even sandwiched between two rich brownies and classic cookies called alfajores.

In Patagonia, the berry of a plant named calafate is used for jam and ice cream and liquor, a sweet, potent beverage we drank at the edge of a glacier from plastic cups, with chunks of 500-year-old ice in it. And there is always Malbec, the famous Argentine dark-red wine. And for Argentines, there is always maté, a tealike beverage sipped through a silver straw from a special leather-bound cup.

Politics. Argentines talk politics all the time. I was there during the acrimonious presidential primary election. But the politics of the past are still present. The face of Evita Peron, still idolized, overlooks the wide boulevards, and admirers leave flowers at her mausoleum.

The Grandmothers of the Plaza de Mayo, a human rights organization established during the Argentine military regime’s “Dirty War” from 1976 to 1983, are a presence, as well. The women’s mission is to find their lost daughters and “disappeared” babies, memorialized by white scarves painted on the city’s central square.

The war with Britain 33 years ago over the Falkland Islands, which Argentines call the Malvinos, remains a sore topic; protesting veterans occupy a campsite in the middle of the Plaza de Mayo. And the almost-war with Chile over a shared border more than 3,000 miles long still has life; Patagonia is split between the two nations.

Weather. Argentina’s seasons are opposite to ours, so in October in Buenos Aires, spring was just around the corner. But in Patagonia, the fierce wind makes it snow sideways, and legend has it that it forced pioneering aviator Antoine de Saint-Exupery’s little mail plane to fly backward. Most of the trees lean at a radical tilt.

Nature. Glaciers calve – a thrilling moment when a big chunk falls off into the water, making a loud rumbling sound like thunder. The Perito Moreno glacier is as big as Buenos Aires: two miles wide and 16 miles deep. It rises 210 feet from the surface of Los Glacieres National Park’s Argentino Lake, which is 300 feet deep. The southern icefield is the third-largest in the world, after those in Antarctica and Greenland.

There are plenty of guanacos – undomesticated relatives of camels that spit at you if you come too close – and once in a while you see a rhea, a giant, flightless bird that looks like a bush running on long legs with big feet.

For birders, there are falconlike caracaras, cormorants, condors, black-necked swans, and flamingos. Best of all, there are Magellanic penguins that trot their goofy walk around the coast.

People. In Buenos Aires, everybody looks and dresses like people in any big American city. But in Patagonia, the gauchos wear boinas – dashing berets – and carry knives tucked into their waistbands.

Pope Francis is a rock star in this Catholic country, but most interesting are the folk saints, especially the 19th-century Gauchito Gil. The custom is to pour an offering of beer at one of the roadside shrines to ask for a good journey (he’s a favorite of truck drivers) and again at the end, as our guide did, to give thanks.

Kicks. The tango lives in milongas (tango dance clubs) and tango shows. There, you can see both old-school (a very macho, very sexy, traditional look, men with hair slicked back, hands in suit pockets, women in skirts with slits up to here) and modern (very acrobatic, with gender equality, women in see-through costumes that leave them nearly naked).

However they do it, it’s terrific. Singers wail their ballads, musicians ply their accordions, and Argentine passion – nicely divided between tango and futbol – lives on.

Unlike Bruce Chatwin, famed travel writer and author of In Patagonia, I didn’t roam through Argentina on my own. I traveled with Overseas Adventure Travel. The guides were outstanding, and of the 20 people in the group – two ex-CIA agents, seven Ph.D.s, a dentist, and a retired Air Force colonel, among others – all were well-traveled and fun and, for a bunch of senior citizens, vigorous hikers.

The orientation meeting in Buenos Aires broke the ice with a tango lesson. Nothing like throwing your leg over a stranger to make friends.

Back to contents

37. BUENOS AIRES STREET ART IS CRYING TO STOP OIL DRILLING (GlobalStream)
21 November 2015

BUENOS AIRES, Argentina — Artists have taken the global fight against environmental degradation and climate change to the streets in Argentina’s capital.

From endangered species to river pollution, melting glaciers and deforestation, street artists in Buenos Aires are using their brushes to paint a planet threatened by mankind.

Environmental damage from mining and fossil fuel drilling in particular is a crucial issue for activists in this South American country. They worry about fracking for resources in the gigantic oil and shale gas formation discovered in 2010 in the southern Patagonia region.

This deposit called Vaca Muerta (Dead Cow in English) is estimated to hold the world’s fourth largest shale oil reserves.

The murals’ stark warnings especially target Shell, the Dutch energy giant, which in August won rights to exploit two Vaca Muerta oil areas for the next 35 years.

Click to view image.

The messages dot the vista of this picturesque city just when voters are about to vote for president on Sunday.

Both center-right opposition candidate Mauricio Macri and the left-wing candidate Daniel Scioli, the chosen successor of the current government, see Vaca Muerta’s riches as an economic opportunity for Argentina. Polling front-runner Macri said he would create a business-friendly environment in Argentina to bring in more foreign investment and exploit the country’s oil and gas wealth.

Up-and-coming street artists here are taking advantage of lax rules about painting buildings to spread their messages. No official authorization is needed — just a property owner’s consent.

“It’s much easier to get permission to decorate buildings and walls here than in many other cities, which makes it very attractive for foreign street artists to come and paint,” says Matt Fox-Tucker, founder of Buenos Aires Street Art, an organization that supports local urban art in the Argentine capital.

“I think Buenos Aires has one of the most exciting street art scenes in the world right now with lots of large scale murals,” he adds.

Some of the works were created by individual artists and some were the work of collective groups. In one example of the latter, in August 100 artists and volunteers painted a 1,000-foot mural on Juan B. Justo Avenue, in the high-end neighborhood of Palermo, to raise awareness of the Arctic’s environmental contamination.

Back to contents

38. PRESIDENTIAL ELECTION PROMISES CHANGE IN ARGENTINA, BUT HOW MUCH? (World Politics Review)
By Jason Marczak
Friday, Nov. 20, 2015

Argentina’s presidential vote this Sunday, Nov. 22, is one of its most consequential elections in recent history. After 12 years of Kirchnerismo, the next president will bring change to a country in need of an economic and political jolt. That much is certain. But how swiftly and how deeply will any transformations take place? That will depend on Sunday’s vote.

In the days leading up to the first round of voting on Oct. 25, it seemed a fait accompli that President Cristina Fernandez de Kirchner’s electoral alliance, the Front for Victory, or FPV, was in the driver’s seat to hold onto power. In the August primary, an open and mandatory vote seen as a bellwether for first-round results, Daniel Scioli, the FPV candidate and currently governor of Buenos Aires province, outperformed the opposition Cambiemos coalition’s candidate, Mauricio Macri, the mayor of Buenos Aires, by over 8 percentage points. Momentum was so much on Scioli’s side that he even decided to skip Argentina’s first-ever presidential debate three weeks before the primary vote, thinking he had nothing to gain by discussing policy head-on with opponents trailing him.

Opinion polls corroborated this logic. Most predicted he would trounce Macri by at least 10 percent and beat the third candidate, Sergio Massa, by a slightly larger margin. The inevitability of a resounding victory led to the slight possibility that Scioli could win either the 45 percent of the vote outright, or the 40 percent with a 10 percent cushion over Macri or Massa, to avoid a run-off.

“Whatever the outcome in Argentina, at stake is far more than just some tinkering on the margins of current policy.”

But that thinking failed to account for the fluidity of the presidential race; polls are also notoriously unpredictable in Argentina. For one, the first-round voters were not the same as those in the primary. Over 1 million more Argentines went to the polls in October, with the majority, surprisingly, opting for Macri. But Macri’s strong showing, coming within 2 percentage points of Scioli, was also a reflection of doing well in key provinces, as well as benefiting from some weak FPV candidates down the ticket. In Buenos Aires province, for example, Kirchner’s current Cabinet chief lost the gubernatorial election to a little-known candidate from Macri’s coalition. In Congress, the FPV will still have the most seats in both chambers, but it lost its outright majority in the lower Chamber of Deputies.

Now, ahead of Sunday’s vote, a Macri victory is likely. One recent poll gives the Cambiemos candidate 55.5 percent of the vote, with Scioli trailing at 44.5 percent. But nearly 11 percent of respondents say they haven’t yet made up their minds or could change them before Sunday. The margin of error and undecided voters once again show that anything can happen at the polls.

Whatever the outcome, at stake is far more than just some tinkering on the margins of current policy. Kirchner leaves office on Dec. 10 with Argentina descending into an economic hole. Technically in default since July 2014 due to an impasse with holdout hedge funds in New York City, Argentina is shut out of international credit markets. Its fiscal deficit is ballooning; its trade surplus is at the lowest level in nearly 15 years; and annual inflation, though officially at 14 percent, may actually be double that. With few options, China has stepped in to provide Argentina with some stability, though on Beijing’s terms.

The commodity-boom policies of the Kirchner years have clearly run their course. But Argentina can still once again revive its economy. It has the human capital and the resources to shed the economic baggage imposed by the outgoing government. Both Scioli and Macri agree that change is on the horizon—and that the future will bring a new era of economic growth. Where they differ is on how to achieve it.

For Macri, the economic answer is a quick about-face. He has pledged to immediately lift capital controls and export restrictions and move the country in a more market-friendly direction. Negotiations with the holdout hedge funds would also be on the table. Scioli has called for a gradual shift in certain aspects of economic policy, but has pledged to continue with the overall economic framework of the current government.

And that is the issue dominating the campaign, especially in the weeks leading up to the second round. Scioli is attempting to sow fear among Argentines that a vote for Macri is a vote for devaluation and inflation—two phenomena that they thought were in the past. The neoliberal economic policies of the 1990s are seen as having sparked the last crisis; the International Monetary Fund, with which Scioli accuses Macri of colluding, is viewed as the primary instigator.

The divisions were on clear display during the Nov. 15 televised debate where Scioli sought to portray a Macri victory as leading to economic calamity. For Macri, meanwhile, a Scioli victory would be a relative continuation of policies that are running the economy into the ground. Both candidates have pledged to largely continue the many popular social programs introduced during the governments of Kirchner and her late husband and presidential predecessor, Nestor. Though again resorting to scare tactics, Scioli used the highly anticipated debate to accuse Macri, who has indicated that some current programs may need to be tweaked to get the country’s fiscal house in order, of preparing to make significant cuts that threaten peoples’ basic livelihoods.

The repercussions of Sunday’s vote will not be limited to domestic affairs. Both candidates would seek to revive Argentina’s icy relationships with the United States and Europe, take a second look at budding relations with China and Russia, and reinforce ties with Brazil and Mercosur, the regional bloc headquartered next door in Uruguay. But clear differences exist. Macri, unlike Scioli, would look to reopen and possibly revise Chinese and Russian agreements, including those on nuclear energy advanced at the recent G-20 meeting. However, what divides them most is the thorny regional issue of Venezuela. Kirchner’s government is friendly to the Venezuelan regime and forcefully supported its inclusion into Mercosur. On day one, Macri has said he would ask to have Mercosur’s democracy clause invoked, which could lead to Venezuela’s expulsion, if Caracas does not release imprisoned opposition leaders, who are, in effect, political prisoners. Scioli, by contrast, is quiet on his Venezuela policy.

Sunday’s vote will yield far-reaching implications for Argentina’s future well beyond the next four years. Although differences between the two leading candidates loom large, no matter who wins, change is on the horizon. The question is how much and how quickly.

Jason Marczak is deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Back to contents

Responder Responder a todos Reenviar Más

Responder

Introduce tus datos o haz clic en un icono para iniciar sesión:

Logo de WordPress.com

Estás comentando usando tu cuenta de WordPress.com. Cerrar sesión / Cambiar )

Imagen de Twitter

Estás comentando usando tu cuenta de Twitter. Cerrar sesión / Cambiar )

Foto de Facebook

Estás comentando usando tu cuenta de Facebook. Cerrar sesión / Cambiar )

Google+ photo

Estás comentando usando tu cuenta de Google+. Cerrar sesión / Cambiar )

Conectando a %s


A %d blogueros les gusta esto: