Archive for the ‘ARGENTINE UPDATE’ Category


2 noviembre, 2015











By Larry Neumeister
October 30, 2015

NEW YORK — Argentina cannot pay some bondholders while refusing to pay $6.1 billion in claims by creditors who refused to swap their bonds for steeply discounted replacements in the South American nation after it defaulted in 2001 on $100 billion in bonds, a judge said Friday.

U.S. District Judge Thomas Griesa’s written ruling means Argentina would owe about $8 billion to creditors who refused the swaps that were accepted by about 93 percent of Argentina’s bondholders in 2005 and 2010.

Griesa said the republic must pay all bondholders who refused to swap their bonds if it chooses to pay those who did. With the bond swaps, Argentina invited creditors to exchange their old bonds for newly issued bonds worth between 25 percent and 29 percent of the original bonds’ value.

The Manhattan judge said Argentina has violated its promise to treat the $6.1 billion in bonds equally with bonds distributed during the discounted swaps.

“The republic has made clear its intention to defy any money judgment issued by this court, and plaintiff has no other means to enforce its rights,” Griesa said.

An Argentina lawyer did not immediately comment.

But in court papers, lawyers for the republic had urged Griesa to reject adding the $6.1 billion in claims to money owed by Argentina, saying it would raise to a “staggering amount” of $8 billion the amount owed to bondholders who refused the swaps and would threaten the nation’s Central Bank reserves.

“Those reserves are vital to maintaining the healthy functioning of the Republic’s economy, and the requested orders would subject the Republic to an unacceptable degree of catastrophic risk,” the lawyers said.

After the 2001 default, U.S. hedge funds including NML Capital scooped up Argentina’s bonds, but refused the swap offers, choosing to sue to enforce the contracts they signed.

In a statement Friday, NML lawyer Robert Cohen said Griesa’s ruling does not change Argentina’s obligations but instead confirms that Argentina must treat its creditors equally.

By Andres Oppenheimer
31 October 2015

Here’s a scenario that seemed highly unlikely only a few weeks ago, but that has a 50 percent chance of happening in light of the political earthquakes that are rocking Argentina, Brazil and Venezuela, and that could mark the end of a 15-year-old leftist populist cycle in South America.

It would go like this:

Argentina’s center-right opposition leader Mauricio Macri, bolstered by his unexpectedly strong performance in the Oct. 25 first-round presidential elections, wins the Nov. 22 runoff elections. Macri would lure an avalanche of foreign investments and spur hopes of a dramatic economic recovery after several years of economic downturn.

An open critic of populist authoritarian regimes, Macri has said that if elected, he would demand that Venezuela abide by regional commitments to democratic rule. His election would make big headlines everywhere, and turn him into an important regional figure.

(A milder version of this scenario would take place in the event of a victory by Argentina’s government-backed candidate Daniel Scioli. He is more moderate than outgoing president Cristina Fernández de Kirchner, and would not be as close to Venezuela as she is.)

Meanwhile, in Brazil, prosecutors might link beleaguered President Dilma Rousseff, whose popularity has sunk to 9 percent, to the Petrobras oil company corruption scandal. Congress might decide to impeach her, and the country would plunge into a constitutional succession, or early presidential elections. Brazil would shift toward more market-friendly economic policies, and take greater distance from Venezuela and its leftist allies.

(A less dramatic version of this scenario would be if Rousseff decided to weather the storm by convening a “national unity” government with opposition parties to remain in office during the remainder of her term.)

These major changes in South America’s political map would have a major impact on Venezuela’s key Dec. 6 legislative elections. They would deprive Venezuelan President Nicolás Maduro from the support of the region’s biggest countries if he decided to rig the vote. With the economy shrinking by 8 percent this year, a 200 percent inflation rate — the world’s highest — and widespread food shortages, Maduro’s party would almost surely lose a free election, pollsters say.

In recent Venezuelan elections, Brazil and Argentina had immediately accepted official results, which were disputed by Venezuela’s opposition. That may not happen this time around.

Maduro, who has refused to allow electoral observers from the European Union or Organization of American States, could call for an urgent presidential summit of UNASUR, an Ecuador-based South American group that has often supported him, to validate a rigged election result on election night. He could still count with Argentina’s outgoing president Fernández, whose term expires Dec. 10.

But moderate UNASUR members, such as Chile and Colombia, would most likely schedule such a meeting for after Dec. 10, once the outgoing Argentine president is out of the picture. Without unconditional support from Argentina and with a skeptical Brazil — whose electoral tribunal has already announced that it will not send electoral observers to Venezuela because of concerns over that country’s electoral process — the Venezuelan government would only count with the support of smaller allies such as Bolivia, Ecuador and Nicaragua.

If Maduro’s party loses the Dec. 6 election and he refuses to concede, there could be enough consensus within the OAS to invoke the group’s Democratic Charter, which calls for the collective defense of democracy in the region.

Diego R. Guelar, head of Macri’s party’s international relations office, told me that a Macri administration would not validate a fraudulent election in Venezuela. Furthermore, it would seek to team up with Brazil to sign a free-trade deal with the European Union and the Pacific Alliance made up of Mexico, Colombia, Peru and Chile.

Macri’s election “would mark a significant regional shift, and end of our region’s isolation from the world’s biggest trading blocs,” Guelar said.

My opinion: An opposition victory in Argentina’s runoff vote would change Latin America’s political map, ending 15 years of corrupt leftist populist governments that have left their countries bankrupt. I’m not yet willing to bet that this regional scenario will come true, but there’s an even chance that it will.

By John Paul Rathbone
November 1, 2015

Volatile times ahead in region as popular expectations remain high

The commodity supercycle ended and in the Americas the political repercussions have followed swiftly. Almost everywhere, the status quo is being upended. Citizens are agitating for change. Their ends are sometimes revolutionary.

In Argentina, pro-business presidential candidate Mauricio Macri may well end 12 years of populist rule at an electoral run-off on November 22. In Brazil, Dilma Rousseff, elected president last year, is now the most unpopular leader in national history, while her Workers Party is in disgrace.

In Venezuela, the long-ruling socialist party will likely be trounced in December’s mid-terms; the only question is by how much. In Guatemala, a television comedian with no political experience has been elected president while his predecessor has been indicted for corruption.

The list of political reversals goes on. Nor is this only a Latin phenomenon: it extends to Anglo-Saxon commodity countries in the hemisphere, too.

Stephen Harper, Canada’s prime minister, was toppled from office last month. Like his Latin counterparts, Mr Harper had happily ridden the commodity super-cycle. During his election campaign, he imagined a fourth term. Instead, voters swung against his divisive “prairie conservatism” and unexpectedly chose the inexperienced social democrat Justin Trudeau instead.

What is going on? Are there common themes linking these events?

In South America, it seems that voters have grown tired of a decade of mostly leftist rule, the so-called “pink tide”, and are now moving back to the centre. But in Canada the pendulum has swung the other way. That suggests more complex underlying reasons.

One common theme is that the stability of the recent past is now associated with stagnation. Another is popular disgust with incumbents who overstayed their time in power, becoming arrogant and often corrupt. Brazil’s $2bn corruption scandal at Petrobras, the state owned-energy company, is a striking example. But it is far from the most venal. For that look to Venezuela; its government has become a byword in the region for intransigence and criminality.

This new middle class has lofty personal aspirations and high expectations of what government should be: modern, transparent and open to creating opportunity. These are reasonable goals but many are also quick to mobilise in pursuit of them, especially the young

What is striking is how citizens now feel empowered to challenge the status quo. Sometimes that is testament to stronger institutions, especially the judiciary. But it may also be due to Latin America’s “new middle class”, which has doubled to 200m people since 2001, according to the World Bank.

This new middle class has lofty personal aspirations and high expectations of what government should be: modern, transparent and open to creating opportunity. These are reasonable goals but many are also quick to mobilise in pursuit of them, especially the young.

This can have positive outcomes, but not always. Sometimes it just generates “corrosive social conflict, government paralysis and political instability”, notes Moisés Naim of the Carnegie Endowment.

That is especially so now that economic growth has slowed, discontent is rising and governments are looking for ways to re-ignite growth. Some policies are easy to discern: more investment in decayed infrastructure (one of Mr Trudeau’s promises for Canada); and improved productivity (a central plank of Mr Macri’s pro-business agenda in Argentina.) Less easy is how to maintain the social gains of the recent past while also balancing government books.

Argentina dramatises this tension, which is why its election is such an important harbinger. Outgoing president Cristina Fernández doubled state-spending in only five years. That bout of free-spending populism explains her relatively high popularity.

But it also leaves behind a mess that will be politically difficult for her successor to fix, especially as austerity is associated with “neoliberal” policies that led to Argentina’s economic collapse and debt default of 2002.

Cynicism clouds the debate. In Brazil, former president Luiz Inácio Lula da Silva has criticised needed spending cuts. But his criticism may have less to do with social concerns, and more to do with rallying his political base amid the Petrobras probe. Last week, police raided the offices of one of his sons; the week before, another was accused of receiving Real2m ($518,000) in kickbacks.

In South America, popular expectations remain high. There are also fewer means to meet them. That makes for a dangerous mix. Volatile times surely lie ahead.

By Bob Van Voris and Katia Porzecanski
October 30, 2015

* Default bondholders must be paid before restructured debt
* U.S. judge has blocked payments on $28 billion in new debt

Holders of more than $6.1 billion of defaulted Argentine debt were added by a U.S. judge to a group of bondholders who must be paid before the South American country can pay its restructured debt.

The ruling Friday by U.S. District Judge Thomas Griesa in Manhattan puts additional pressure on Argentina to settle with holders of the defaulted debt, led by Paul Singer’s NML Capital. The decision means Argentina must reach a deal or pay $7.9 billion in defaulted bonds before it can resume interest payments on $28 billion of restructured debt.

Argentina claimed Griesa’s decision would make it harder to negotiate a settlement with bondholders.
At a hearing Wednesday, Carmine Boccuzzi, a lawyer for Argentina, had argued that adding to the list of investors blocking payments on the restructured debt would mean “spreading the veto power among hundreds of bondholders.”

A lawyer for NML argued that Argentina has showed no interest in discussing a possible settlement.

Record Default
Argentina defaulted on a record $95 billion in sovereign debt in 2001. It restructured most of the debt in 2005 and 2010. The holdouts, which include U.S. hedge funds, sued for full payment, citing an equal treatment — or “pari passu” — clause in the bond documents, which prevents Argentina from favoring later bondholders.

Griesa blocked Argentina from paying the restructured bondholders before holders of $1.7 billion of its defaulted debt, triggering the nation’s second default in 13 years in July 2014, when President Cristina Fernandez de Kirchner refused to comply. A group of 530 so-called me-too bondholders asked Griesa to add their claims to the group that must be paid in full.

“Today’s decision does not change the size of Argentina’s obligations,” Robert Cohen, an attorney for NML, said in a statement. “It merely confirms Argentina’s promise under the pari passu clause to treat its creditors equally.”

Argentina’s bonds have surged on the expectation that Fernandez’s successor, whose term is to begin in December, will resolve the holdout dispute and bring the country back to international capital markets.

Argentina’s presidential elections on Oct. 25 deepened investors’ optimism when Mauricio Macri, who has publicly vowed to settle the litigation, surprisingly finished in a near-tie with the ruling party candidate. The two are now slated to face each other in a runoff on Nov. 22.

The case is NML Capital v. Republic of Argentina, 14-cv-08601, U.S. District Court, Southern District of New York (Manhattan).

By Jonathan Stempel
Oct 30, 2015
The U.S. judge overseeing litigation stemming from Argentina’s $100 billion default in 2002 ordered the country to pay holders of several billion dollars of its defaulted bonds whenever it pays holders of bonds issued in two debt restructurings.

U.S. District Judge Thomas Griesa in Manhattan ruled on Friday in favor of plaintiffs in 49 lawsuits seeking the same relief as holdout bondholders, including Elliott Management Corp’s NML Capital Ltd, which won a court ruling that directed Argentina to pay it $1.33 billion plus interest.

Argentina has not complied with that ruling, and defaulted again in July 2014 as a result. The additional plaintiffs are known as “me-too” plaintiffs because their bonds are similar to those owned by the holdouts.
Carmine Boccuzzi, a lawyer for Argentina, did not immediately respond to requests for comment.

Argentina swapped 92 percent of its defaulted debt at a steep discount in 2005 and 2010 restructurings. But it has refused to pay holdout bondholders, who it calls “vultures” for seeking full payment on their unswapped bonds.
Like the holdouts, the “me-too” plaintiffs’ bonds contain a clause requiring Argentina to pay them whenever it pays investors who own bonds that were swapped.

Griesa said that clause must be enforced, saying it was in the public interest, and citing Argentina’s having “escalated its scheme” to pay holders of restructured bonds even as it refuses to pay holders of unrestructured bonds.
He also rejected Argentina’s argument that an injunction requiring equal treatment could impede settlement talks with the holdouts, overseen by court-appointed mediator Daniel Pollack.

“The Republic’s reluctance to entertain meaningful settlement discussions before the special master should not prevent plaintiffs from vindicating their rights,” Griesa wrote. “If anything, the equities cut the other way.”

Argentinians voted on Sunday to choose a successor to President Cristina Fernandez, a leading critic of the holdouts. A runoff between ruling party candidate Daniel Scioli and opposition candidate Mauricio Macri is scheduled for Nov. 22.

By Andrew Scurria
Oct 30, 2015

Argentina’s recovery from a 2001 debt default is still tangled up in court, stymied by a determined group of hedge funds who broke with other creditors and refused to take a negotiated haircut. Now, states and cities facing unsustainable pension costs across the U.S. are facing their own holdout problem.

For municipal bond issuers stretching from Chicago to Rhode Island, Atlanta to Dallas, cost-saving pension deals hammered out with public unions are in jeopardy because of legal challenges by small, dissenting employee groups.

Pensioners enjoy strong legal guarantees under many state constitutions, so prying concessions loose at the bargaining table represents the only way of getting out from under crushing retirement bills without turning to Chapter 9 bankruptcy. But legal precedent in states like Illinois and Pennsylvania make it nearly impossible to bind workers to a pension cut they don’t want.

The objectors pushing these lawsuits are drawing ire not just from their government employers but also from their fellow workers, leaving policymakers searching for a way to silence them.

Chicago became the highest-profile victim in July when a judge struck down a pension agreement forged in 2013 by Mayor Rahm Emanuel. Municipal market watchers expect more to come.

“Even if there are changes that are not wholesale diminutions of people’s pensions, but just tweaking to safeguard the financial risk or somehow make it a little more financially sound, it’s going to get challenged by someone and it’s going to end up in the courts,” said Alaine Williams, a labor attorney with Philadelphia-based Willig Williams & Davidson.

Consider Chicago. Faced with two retirement systems scheduled to go broke before 2030, the mayor convinced 28 of the city’s 31 municipal labor unions to accept benefit cuts for both midcareer and future workers; in exchange, the city took on new pension funding mandates and empowered the unions to force those payments in court.

Much to the chagrin of the proponents, three unions would not play ball. Their subsequent legal victory came in part because Chicago did not negotiate through collective bargaining, likely because city officials were not sure they would prevail on a straight worker vote, according to sources involved in the litigation.

Judge Rita Novak found “no evidence that, in reaching an agreement with the city, the union officials followed union rules and bylaws in such a way as to bind their members as true agents.” The city has since appealed to the Illinois Supreme Court.

Submitting the deal for a stakeholder vote would have made a holdout challenge harder because the holdouts may have been bound by the collective bargaining process, said Karol Denniston of Squire Patton Boggs;. The objectors theoretically could have claims against their bargaining units, but not against the city.

In Illinois, the problem has some reconsidering the very idea of negotiated pension deals. There may be ways to reduce liabilities outside of the group setting, but the parade of lawsuits has kept those ideas in their infancy. One, introduced this month by Illinois Rep. Mark Batinick, would offer a voluntary pension buyout to individuals. Those who take the up-front payment would receive less than the full present value of their accrued benefits, with the savings accruing to the state.

Making the buyout optional, not forcible, avoids some of the constitutional problems that doomed the state’s last stab at pension reform.

The next holdout fight could be in Pennsylvania, where Governor Tom Wolf (D) is furiously horse-trading with Republicans who want pension reforms baked into an overdue 2016 budget. Alas, unlike Pennsylvania cities, the state itself is barred from bargaining with its workers over pensions. Rounding up support from 100% of the affected workers is impossible, and without some binding process in place the holdouts will continue to have the upper legal hand. When the stalemate breaks, as it always seems to, it will only take one worker and one lawyer to send the state back to square one.

By Belén Marty
October 30, 2015

Mariano Obarrio: Mauricio Macri Promises Critical Boost for International Commerce

Opposition leader Mauricio Macri shocked the nation with his performance in the Argentinean presidential election this past Sunday. The days following the polls were filled with celebrations and media appearances, but now Marci must prepare to face the ruling Front for Victory coalition candidate, Daniel Scioli, in a runoff on November 22.

Scioli won the first round on October 24, but by a much narrower margin than expected. Heading into the runoff, Scioli promises to be “more Scioli than ever,” and plans to debate Macri on November 11, even though he refused to take part in the first debate prior to the initial round of voting.

As we near the final stage of the election, internal divisions threaten to undo the ruling coalition. During Sunday’s polls, the radical Kirchnerist faction of the party, La Cámpora, did not show up to Scioli’s campaign headquarters, and instead rallied behind President Cristina Kirchner’s candidate for the governorship of Buenos Aires, Aníbal Fernández. Nevertheless, Fernández lost the election to opposition candidate María Eugenia Vidal.

The PanAm Post sat down with Argentinean political journalist Mariano Obarrio to discuss the internal collapse of Kirchnerist forces, how a change in leadership may affect Argentina’s foreign relations, and the virtues and deficiencies of the two competing presidential candidates.

Why did pro-Kirchner youth group La Cámpora withdraw its support for Scioli? Will it affect his chances of winning the runoff?

Within La Cámpora, there were conflicting views. Its leader, national Congressman Andrés Larroque, and Máximo Kirchner, the president’s son, were more against Scioli than Wado De Pedro, secretary general to the presidency, and Mariano Recalde, president of state-owned Aerolíneas Argentinas.

The reasons were ideological: they don’t share Scioli’s political goals and view him as an economic-establishment figure. They didn’t like Scioli distancing himself from President Kirchner, but most importantly, they are certain that Scioli wouldn’t give them a single government position, and that he may very well fire many state employees who are members of La Cámpora.

La Cámpora won’t sway the results one way or the other; they don’t seem to hold that kind of power. Yet, they could damage Scioli by causing his supporters to withdraw financial support, as well as generating conflicts which would do nothing to help his cause. They are punishing Scioli.

If he wins, what would be the virtues and defects of a Macri administration?

As for virtues, his government would be more rational, conservative, with economic ideas more akin to capitalism with industrial development. He would negotiate with the holdout bondholders, lower government spending, let the economy adjust to reality, address inflation, and encourage investment.

As for defects, he has little political experience, lacks a majority in Congress, and has a tendency to disregard proposals or ideas not coming from his “narrow circle” of allies. He would need to come to an agreement with other parties to ensure governance, and he has very few political agents to negotiate controversial topics with the Peronists.

How would Macri shift Argentina’s foreign relations? What about Argentina’s stance regarding Venezuela and Leopoldo López’s incarceration?

Macri has been very critical of López’s arrest and conviction.

He has no allegiance to Chavismo, and is a strong critic of populist regimes in Latin America.

He would improve relations with Mercosur, the United States, and the European Union, especially Italy and Spain, since Argentina has let these relations grow cold.

How would Macri improve the economy without assuming the political cost of readjustment? Will he lift foreign-exchange controls?

As announced, he would immediately lift all foreign-exchange controls.

He would seek large sums of US dollars via reductions in export taxes and, although he hasn’t admitted it, a renewal in exchange rates, which would improve the nation’s fiscal profile.

He would also attract investors and credit using a comprehensive pro-market and pro-investment plan.

Why couldn’t Scioli win outright in the first round? Was it the internal conflict among pro-Kirchner groups, or his inability to win Buenos Airies?

It was, without a doubt, a combination of the two. However, in order of relevance, I would list the following:

1.Cristina Kirchner’s grave mistakes in appointing candidates for Congress.

2.His support for Aníbal Fernández for governor of Buenos Aires, a candidate with a bad public image who faces accusations of drug
trafficking; he’s even been questioned by the Church, and you must remember that the current pope is Argentinean.

3.Naming Carlos Zannini as his running mate, which moved him away from an independent candidacy and linked him to hard-line Kirchnerism.

4.President Kirchner’s overwhelming presence in his campaign, with dozens of national TV broadcasts that saturated the public airwaves, many of which with Scioli at her side.

5.Lack of innovation and reform in his proposals.

6.The discrepancies in political discourse between Scioli and other pro-Kirchner groups: Scioli’s image became worn out after continuously associating with Kirchner, thus making him appear as someone who bows down to the president’s wishes.

By John Hopewell
30 October 2015

MAR DEL PLATA — Opening with Arnaud Desplechin’s lauded “My Golden Years” – Variety’s Justin Chang called it “marvelously vivid” – Argentina’s 30th Mar del Plata Festival sees obvious change: A new executive management duo in artistic director Fernando Martin Peña and general producer Ignacio Catoggio. After backing on to Ventana Sur in a late November berth last year, fest runs Oct. 30-Nov. 7, to avoid a clash with potential second-round voting in Argentina’s upcoming general elections.

Overall however, the 30th edition of Latin America’s only “A”-grade fest aims for continuity, and continuity in growt, in its international interface and industrial heft.

Welcoming Johnnie To, Desplechin and Peter Sohn, in town to sneak peek extracts from “The Good Dinosaur,” at one at the same time, Mar del Plata is opening up to its own city, making use of a pristine multiplex, which looks set to boost fest attendance.

Continuity: José Martinez Suarez is now in his ninth year as Mar del Festival president. For the eighth year running, Festival is backed by Argentina’s powerful INCAA Film Institute, also partner with the Cannes Festival and Cannes Film Market in Ventana Sur, Latin America’s biggest film mart-meet. That backing dovetails Mar del Plata into INCAA bigger picture strategic international, federal and regional vision, which has helped fire up Argentine filmmaking at home and abroad.

Also still in place: Mar del Plata’s hallmark left-of-field selection. 2015’s International Competition is a case in point. Some titles are eminently known: Atom Egoyan’s road movie come suspense thriller “Remember,” a Venice competition player produced by Robert Lantos, sold by IM Global; “Starlet” Sean Baker’s “Tangerine,” set in the L.A. demi-monde; Stephane Brize’s social drama “The Measure of a Man,” which won Vincent Lindon best actor at Cannes.

But there are, as often, a clutch of lower-profile titles: Slovac Ivan Ostrorochovsky’s docu-fiction “Koza,” a boxer comeback tragicomedy that played Berlin’s Forum; Sergio Oksman’s “O Futebol,” a frustrated father-son reunion drama, in Locarno competition; above all, “The Island of Wind,” from Spaniard Manuel Menchon Romero, which recreates the last years of principled Spanish philosopher Miguel Unamuno who, in an act of notable courage, raised his voice against Francisco Franco’s murderous new regime.

Big fest laureates pack out the line-up: Pablo Larrain’s chamber drama “The Club,” about unpunished Catholic Church abuse, a Berlin 2105 Grand Jury Prize winner; Ciro Guerra’s “Embrace of the Serpent,” a testament to the West’s destruction of Amazon civilizations, which topped Cannes’ Directors’ Fortnight; “The Apostate,” from Federico Veiroj, which won a special mention at San Sebastian, a comedic drama steeped in Madrid culture about one man’s battle to find his own path to maturity.

However mainstream in some elements, they weigh in – in highly disparate ways – on the often-edgier side of arthouse. Symptomatically too, fest opens with a title not from International Competition but fest’s vast and rich Authors sidebar that features, among many others, Guy Maddin’s “The Forbidden Room,” Hou Hsiao-Hsien’s “The Assassin,” Frederick Wiseman’s “In Jackson Heights,” Miguel Gomes’ “Arabian Nights,” Jia Zhanke’s “Mountains May Depart” and Johnnie To’s own “Office.”

Fest’s International Competition also frames three Argentine titles, one Pablo Aguero’s “Eva Doesn’t Sleep,” which played at San Sebastian, a surrealistic true-fact based reimagining of the 25-year odyssey of Eva Peron’s embalmed corpse.

Set in the 60s and shot in b/w, “Incident Light,” from Ariel Rotter, (“The Other,” a Berlin Grand Jury Prize winner) pictures a young widow, already courted for second marriage. Another world premiere, and a thesping three-hander, “Popular Mechanics,” from Alejandro Agresti (“The Lake House”) pits a literary editor who’s seen it all against a young writer aiming for the literary bigtime.

This year, Mar del Plata received 2,800 film submissions for its competitions, a historical high, said Catoggio.

That is recognition of an “established festival line which is increasingly popular,” he added.

Of 2015 growth moves, the biggest is LoboLab, Mar del Plata’s first co-production forum.

Projects run the broadest of gamuts, per Catoggio. Highlights include a move into production by both celebrated auteur Lisandro Alonso (“Jauja”) with Constanza Novick’s femme friendship drama “The Future Ahead” and by Chilean helmer Dominga Sotomayer (“Thursday Through Sunday”) with Felipe Galvez’s genocide exposé “The Settlers” to “The Bums,” the potential directorial debut of Gustavo Biazzi, d.p. on Santiago Mitre’s “The Student” and Cannes Critics’ Week winner “Paulina.”

But as important is the presence of projects from lesser-known but building national cinemas, Catoggio argued. One example: Ecuador. Javier Izquierdo’s “Panama” is a LoboLab project; a 10-strong Ecuador delegation will attend. LoboLab also features Chile Factory, the Giancarlo Nasi and Dominique Welinski-produced new talent showcase from Chile, a country which punches way above its weight in cinema.

Lobolab looks set to spark synergies with INCAA/Cannes’ Ventana Sur. “We wanted the projects to be from people who normally don’t make markets. Mere attendance aids participants’ professionalization, readies them to participate in consolidated markets such as Ventana Sur,” Catoggio observed. One LoboLab prize is indeed a Ventana Sur invite.

Mar del Plata will also add six new screens, thanks to a Paseo Aldrey six-plex, opened Oct. 28, plus a screening room at the city’s Museum of Contemporary Art for retrospectives and restorations.

New sites boost Mar del Plata’s screen count from 13 to 21, allowing the programming and sessions to breath, Catoggio said. The 21st screen will be on the beach, “a model we took to a certain extent from Cannes.”

In a departure, the Intl. Federation of Film Producers Associations (FIAPF), the fest regulator, will hold its annual meeting at Mar del Plata over fest’s first weekend.

Cancelled four times from 1954, but running every year since 1996, fest can now play off the energy and exponential growth of Latin American cinema in general and Argentina’s in particular. In 2014, Argentina punched a 17.8% national film market share, a modern record, thanks to “Wild Tales.” With $17.2 million through Oct. 25, Pablo Trapero’s “The Clan,” a Venice best director winner, is another reminder that one of the biggest film phenomena of modern times is the build of national film industries around the world. Mar del Plata affords an entry to many of its Argentine and Latin American players.


“Eva Doesn’t Sleep,” (Pablo Agüero, Argentina, France, Spain)

“Incident Light,” (Ariel Rotter, Argentina, Uruguay, France)

“Popular Mechanics,” (Alejandro Agresti, Argentina)

“Remember,” (Atom Egoyan, Canada)

“The Club,” (Pablo Larraín, Chile)

“Embrace of the Serpent,” (Ciro Guerra, Colombia, Venezuela, Argentina)

“Koza,” (Ivan Ostrochovsky, Slovakia, Czech Republic)

“The Apostate,” (Federico Veiroj, Spain, France, Uruguay)

“O Futebol,” (Sergio Oksman, Spain)

“The Island of Wind,” (Manuel Menchón Romero, Spain)

“Tangerine,” (Sean Baker, United States)

“The Measure of a Man,” Stéphane Brizé, France)


“Samuray-S,” (Raúl Perrone, Argentina)

“Campo Grande,” (Sandra Kogut, Brazil, France)

“Beyond My Grandfather Allende,” (Marcia Tambutti Allende, Chile, Mexico)

“The Monument Hunter,” (Jerónimo Rodríguez, Chile)

“600 Miles,” (Gabriel Ripstein, Mexico)

“What We Never Said,” (Sebastián Sanchez Amunátegui, Mexico, Argentina)

“Evilness,” (Joshua Gil, Mexico)

“Santa Teresa & Other Stories,” (Nelson Carlo De Los Santos Arias, Mexico, Dominican Republic, United States)

“I Promise You Anarchy,” (Julio Hernández Cordón, Mexico, Germany)

“Suspended Time,” (Natalia Bruschtein, Mexico)

“From Afar,” (Lorenzo Vigas, Venezuela, Mexico)


“The Spider’s Lullaby,” (José Celestino Campusano, Argentina)

“Road To La Paz,” (Francisco Varone, Argentina, Netherlands, Germany, Qatar)

“How Most Things Work,” (Fernando Salem, Argentina)

“Docile Bodies,” (Matías Scarvaci and Diego Gachassin, Argentina)”

“Easy Ball,” (Juan Fernández Gebauer and Nicolás Suárez, Argentina)

“Hortensia,” (Diego Lublinsky and Alvaro Urtizberea, Argentina)

“Kryptonite,” (Nicanor Loreti, Argentina)

“El movimiento,” (Benjamín Naishtat, Argentina, South Korea)

“Paula,” (Eugenio Canevari, Argentina, Spain)

“Pequeño diccionario ilustrado de la electricidad,” (Carolina Rimini and Gustavo Galuppo, Argentina)

“The Football Boys,” (Jorge Leandro Colás, Argentina)

“Our Last Tango,” (Germán Kral, Argentina, Germany)

By John Hopewell and Emilio Mayorga
1 November 2015

MAR DEL PLATA: On the first leg of a jet-setting promo tour, Peter Sohn, director of “The Good Dinosaur,” unveiled a never-seen-before scene from Disney-Pixar’s big Thanksgiving Day play at a master class delivered Sunday at Argentina’s Mar del Plata Festival.

He also spoke from the heart about inspiration for his career and film – his mother, for instance – which he called “a coming of age” and “survival tale” which, when asked to sum up in one phrase, is about “overcoming one’s fears.”

The excerpt, about five minutes long, also says much about the character/background animation contrast that gives “The Good Dinosaur” much of its style.

As the first teaser for “The Good Dinosaur” made clear, Sohn’s debut feature turns on two premises: that the asteroid that wiped out the dinosaurs missed the earth; the dinosaurs evolved: Sohn’s film pictures Arlo, a talking Apatosaurus who befriends Spot, a dog-like cave boy who manages to grunt but doesn’t speak. After tragedy for Arlo, they embark on a journey. In its middle, they happen upon a family of three T-Rex ranchers who’ve had their cattle – longhorn buffalo – stolen by rustlers. Spot has a great sense of smell, which leads them to the herd, and their rustlers. The scene has Arlo terrified twice: by the T-Rex daddy, and second when the T-Rexes force him to walk down to stolen herd and holler for his life to draw out the rustlers: He can only manage a whisper until Spot bites him on the leg.

Arlo is soft-featured, leaf-green, still spindly on his legs, with pronounced eyes and knees, utterly non-threatening; the herd and the breeze-caught grassland around it, by contrast – as Peter Debruge noted when reacting to another scene from “The Good Dinosaur” at June’s Annecy Animation Fest in France – is shot with a near photo-realism, as if Pixar was producing a prehistoric documentary.

And the movie’s leitmotif – overcoming one’s fears – surfaces at two moments: Arlo is terrified first by the T-Rex family, but they turn out to be a good working family; when asked to shimmy down from a knoll to the herd and bellow, so as to bring the rustlers out of hiding, he can merely manage a gasp, until Spot helpfully bites him on the leg. Then he bellows in pain.

In its original manifestation, “Up’s” Bob Peterson had imagined Arlo as older, pictured the Arlo-Spot relationship as that of a neo-father-son. Sohn said at the Mar del Plata Fest Sunday in contrast that Arlo and Spot are like “brothers.” Voiced by child actor Raymond Ochoa, Arlo, indeed, looks younger on screen and in at least in one item of merchandising –a long-necked, clumpy-footed plant-sprout green toy Arlo plumped on the table in front of Sohn – than his 11 years, a fact which will allow him to appeal squarely to tykes.

The photo-realism of “The Good Dinosaur” is not just a stylistic flourish, however. An engaging speaker, Sohn also provided some intriguing details about the different directorial styles of Pixar icons whom he has worked with, as a scratch actor: Pete Docter on “Up,” “Inside Out,” Andrew Stanton, on “Finding Nemo.”

“Pete Docter would always hit the heart. He would always say: ‘What’s inside you? What are you feeling?’ He would always push for that.”

There’s a larger emotional dimension to “The Good Dinosaur,” indeed dinosaurs in general, Sohn argued in Argentina. “There was something kind of fun about the scale of dinosaurs, about a farming dinosaur that was very sincere,” Sohn said. “But there’s also an emotional connection. When you’re called a dinosaur, you’re old and stuck.”

Arlo suffers terrible tragedy in “The Good Dinosaur.” “So emotionally he is stuck. But with the help of his friend, he’s able to move forward.”

“The Good Dinosaur” bows Thanksgiving Day in the U.S. Being a Pixar movie, it is already being talked up as an Academy Award candidate in the animation category.

By Hugh Thomson
Oct 30, 2015

The religious settlements that once provided a utopian refuge for indigenous people are re-emerging.

Jesuit ruins at Santa Ana in Misiones, Argentina

The province of Misiones in Argentina is an anomaly — a long finger of land sneaking out from the north-east of the country between Paraguay and Brazil, covered in dense forest and far removed from the wide-open pampas roamed by gauchos and cattle. Most people come here for the Iguazu Falls, which straddle the border with Brazil and have become a stopping-off point on any fast-track gringo trail across the continent, with good flight connections to both Lima and São Paulo. Flying in, you can already see from the plane the huge spumes of spray rising above the jungle as the Iguazu river takes its dramatic plunge.

But further south lie the far less visited ruins that gave the province its name: the Jesuit missionary settlements that for 150 years provided a utopian, if controversial, alternative for native Indians to the slaughter enacted elsewhere on the continent.

Driving down from the falls to visit them, I was struck by how much better preserved the forests of this region are on the Argentine side than the Brazilian. Aside from one police patrol car — whose occupants were too busy drinking mate tea to bother with our speeding taxi — there was hardly any traffic.

Such is their worldwide influence, it is sometimes forgotten that the Jesuits were founded with the express purpose of spreading Christianity to the New World. In the mid-1530s, a young Spaniard, Ignacio de Loyola, learnt that an expedition was to be sent to colonise the lands of the river Plate, so he gathered friends and created the Society of Jesus.

When it proved difficult for the Spanish forces to hold down the area around Buenos Aires against local Indians, they moved inland towards Paraguay and the Jesuits went with them. The Guaraní tribe they found there, whose territory extended across the Atlantic forests, proved unusually susceptible to Christianity, and they made many converts. Antonio Ruiz de Montoya, one of the leading Jesuits, is said to have baptised 100,000 Indians.

There followed one of the most remarkable assisted migrations in history. Brazilian slave traders were continually trying to capture the Guaraní, so Ruiz de Montoya decided to move them south to safety in new Jesuit settlements along the river Paraná. Sailing downstream in hundreds of canoes, the men, women and children of the tribe had to bypass the great waterfalls of Guairá and escape the traders who attacked them from behind palisades.

The eminent historian of the Amazonian Indians, John Hemming, has described what a magisterial sight this must have been as they “glided down the broad grey rivers of the Paraná, each canoe filled with white-robed Indians, some with a black-gowned Jesuit under an awning amidships, with the congregation breaking into religious song to raise its spirits and inspire the rowers”.

On arriving at San Ignacio Mini, the most restored of the surviving mission settlements, I was struck by the scale and vision of the Jesuits. In addition to a central church, they built workshops and carved orchards out of the jungle. The Indians working on the plantation had relatively short working days of six to seven hours compared to the near perpetual servitude in mines and fields elsewhere on the continent. All this was done with the close co-operation of the Guaraní — indeed often there were just two Jesuit priests in a settlement of thousands of Indians and administration would take place jointly between priests and local caciques (rulers).

I wandered around the large central plaza past swallowtails and yellow flycatchers. My local guide, Marcelo Sanchez, told me that one of the most startling consequences of the Jesuit conversions was the Guaraní adoption of monogamy; although he added that the Jesuit policy of insisting on early marriages at about 15 in order, as they wrote, “to avoid many evils”, was problematic.

Sanchez and I went together to the nearby settlement of Nuestra Señora de Loreto, less restored than San Ignacio but the largest mission in the region. By 1700, Loreto had overtaken Buenos Aires in size, with a population of about 7,000. Only the three central hectares of this site that once sprawled across 72 have been recovered from the jungle, although work has picked up now thanks to renewed funding and there is a new museum. As Sanchez drily commented, it helps that the Catholic world has for the first time a Pope who is both Argentine and Jesuit.

The deserted ruins had tremendous atmosphere. When I visited it was pouring with rain, and the giant trees and lianas that had grown up over the buildings were shining. Sanchez told me that he was of mixed blood, like many in the region: mainly Guaraní but with German and Portuguese ancestry as well. “We’re like a salad in this state — all mixed up.”

He stopped to show me a small herb he called isipo growing over a set of circular steps leading up to a ruined gate. “This herb was a favourite of my grandmother’s. It was an aphrodisiac. She needed it as she was 16 when she married my 65-year-old grandfather. And it worked — they had four children.”

Were the Jesuits preserving the Guaraní or exploiting them? Many natives resisted their approaches
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I nodded politely. It was hard to know quite what to say in response.
In the grass near the ruins was a small memorial stone to Antonio Ruiz de Montoya — much loved by the Guaraní for leading them to safety and petitioning Spain for their continued legal protection. It was here at Loreto that the first printing press was established in Latin America.

The Jesuits ensured that some books were printed in Guaraní. Ruiz de Montoya himself compiled a comprehensive dictionary of the language that is still acclaimed by linguists.

When I visited a third settlement nearby, Santa Ana, the sheer ambition of the civilisation brought here by the Jesuits became apparent — each mission settlement had a huge central plaza and fine baroque architecture, often with native Guaraní elements woven into sculptures. Where else would you see a carved angel playing the maracas?

Nevertheless, the Jesuit settlements were controversial. Were they preserving the Guaraní or exploiting them? Many natives resisted the approaches of the Jesuits, preferring to take their chances in the jungle against the slave traders but keep their ancient customs.

Voltaire — a lifetime opponent of the order since his education at their hands — wrote a caustic passage in which Candide travels to the area: “It is an admirable thing, this government. The kingdom is more than 300 leagues across. It is divided into 30 provinces. Los Padres [the Jesuits] own everything in it and the people have nothing; ’tis a masterpiece of reason and justice.”

The time came when the kings of Spain and Portugal were no longer happy with what they saw as the meddling interference of the Jesuits. The Treaty of Madrid in 1750 redrew the boundaries of Brazil and the Spanish territories, effectively cutting the mission lands in half. Those Guaraní assigned to Brazil rebelled at the thought of being taken for slaves and one of the last indigenous uprisings against Europeans, the Guaraní war of 1753-56, resulted in the slaughter of the battle of Caibaté: 1,400 Guaraní died compared with only three of their Spanish and Portuguese attackers. This war was later memorialised in The Mission (1986), although the film gives a hyperbolic view of events. By 1767, the Jesuits had been expelled from Spanish and Portuguese territories and the missions fell into disrepair.

Contemporary Argentine attitudes to the Jesuits are mixed. Not until 1940 was San Ignacio Mini, the most accessible site from the river, visited by some architects from Buenos Aires who initiated the slow process of restoration. But the majority of the other settlements have either been subsumed under new towns or lost in the jungle.

When I first visited the falls of Iguazú 20 years ago, I came with a friend, John Fernandes, who had long dreamt of establishing a guesthouse there in the jungle. That dream has since come to fruition and his Secret Garden is a small, exclusive place from which to visit both the falls and the missionary settlements. John has used his time to produce a small monograph on the history of the Jesuit missions and while we celebrated our reunion in his tropical garden with champagne and pizza, he told me how strange it was that the Jesuit legacy was still so undervalued and ignored.

The story of native Indians being treated badly by Europeans is hardly novel in Latin America. From Mexico to Patagonia the same thing happened. But what makes the story of the Guaraní so peculiarly heartbreaking is that for some 150 years the process was reversed. Until the Jesuits were expelled, the Guaraní did enjoy a standard of life high enough for them to rebel at the prospect of losing it due to the arbitrary redrawing of lines on a map in Europe.

One reason the Jesuits built the missions here was to exploit the nearby wetlands in the neighbouring province of Corrientes, where they could keep cattle as it was less disease-prone than the forests. I ended my trip with a visit to those wetlands, with their fabulous wildlife: capybara, caimans and kingfishers. As I glided along the canal of San Miguel, cut by the Jesuits, I reflected on how the jungle has always had a capacity to ruthlessly obscure the best attempts of man to cultivate it, whether it be the Maya in the Yucatán or Henry Ford in his Brazilian rubber plantation. The achievements of the Jesuits have been shrouded by both vegetation and prejudice for centuries — but, slowly, they are being revealed to the light once more.

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2. MACRI-ECONOMICS (The Economist)







31 October 2015

The first round of voting shakes up the presidential race

HOURS before the official results began to circulate on October 25th, campaign workers for Daniel Scioli, the front-runner in Argentina’s presidential election, handed out orange T-shirts, baseball caps and pens emblazoned in capital letters with the legend “president”. Pollsters were not sure whether Mr Scioli, who is running as the heir of the Peronist president, Cristina Fernández de Kirchner, would win outright in the first round or move on to a run-off against Mauricio Macri, the mayor of Buenos Aires. No one doubted that he would be well ahead.

The results are therefore a shock. With 97% of the votes counted, Mr Scioli, the candidate of the Peronist Front for Victory (FPV), has 36.9% of the vote, which puts him barely in front of Mr Macri, who has 34.3%. There will be a run-off on November 22nd. Mr Macri, who is campaigning under the banner of Cambiemos (Let’s Change), an alliance of non-Peronist parties that promises to break with the divisive populism of Ms Fernández, now seems to have a good chance of winning.

If he does, he will set a different tone for the country. Unlike Ms Fernández and her late husband, Néstor Kirchner, who preceded her as president, Mr Macri favours markets instead of state controls, is friendly to the outside world and an advocate of strong institutions rather than obedient ones. Mr Macri would undo much of the Kirchners’ legacy, though he has promised to keep parts of it (see “Argentina’s elections (2): Macri-economics”). He would be the first president since Argentina returned to democracy in 1983 who is neither a Peronist nor a member of the movement’s less successful rival, the Radical Party. The financial markets cheered that prospect. The stockmarket rose by 4.4% on news of the first-round results and the peso strengthened in the unofficial “blue-dollar” market.

Although Mr Scioli is nominally ahead, the vote looks like a repudiation of his thesis that voters just want judicious modifications to Ms Fernández’s policies. Her expansion of welfare and defiance of foreign creditors were popular, but she also pushed up inflation even as the economy started to stall. The middle class is tiring of restrictions on buying dollars. A survey conducted before the election by Management and Fit, a consultancy, found that a quarter of Argentines want the next president to continue Ms Fernández’s interventionism, a third want limited changes to her approach and 40% want a radical overhaul. Voters may be eager for more change than Mr Scioli is proposing.

The setback to his candidacy is even bigger than it looks. Part of his pitch to voters had been that as a Peronist he represents Argentina’s dominant political force and would therefore guarantee stable government. “The governors are with me, the presidents of the regions are with me, the mayors are with me and the legislators are with me,” he told The Economist before the election.

That is less true than he thought. The parties that make up Cambiemos gained 29 seats in the lower house of Congress, while the FPV lost 26 (see chart). If united, the parties arrayed against the FPV and its allies can now outvote them in the lower house, though the FPV retains its ample majority in the Senate.

Cambiemos won the governorship of the Province of Buenos Aires, home to nearly 40% of the population, which had been in Peronist hands for 28 years and in Mr Scioli’s for the past eight. That may have less to do with him than with his party’s candidate, Aníbal Fernández, who was backed by the president (but is not related to her). His candidacy revived rumours (which he denies) that he had been involved in a drug-trafficking ring. Two-thirds of voters surveyed said they would never back him. Even so, the loss of the governorship, the second-most powerful elected office in the country, is a blow to Mr Scioli. Now, “whoever wins the presidency could have a governability problem,” says Joaquín Morales Solá, a columnist at La Nación, a newspaper.

Much now depends on who can win over the supporters of the third-placed candidate, Sergio Massa, a Peronist congressman who won 21.3% of the vote. Mr Massa had been Ms Fernández’s cabinet chief but struck out on his own before the legislative elections in 2013 and began criticising his old boss. He has been the law-and-order candidate, calling for a crackdown on drug trafficking and harsher penalties for corrupt public officials. On economic policy he advocates a middle way between the “gradualism” proposed by Mr Scioli and the more comprehensive changes espoused by Mr Macri.

Indications are that Mr Massa will support Mr Macri, even if he does not make a formal endorsement. The first-round results show that people “don’t want continuity”, he said in a television interview.

Mr Scioli must now distance himself from Ms Fernández without alienating Argentines who benefit from her government’s lavish spending and cheer her pugnacious attitude toward foreign creditors. If he gets the balance wrong, he may find himself stuck with a lot of useless orange merchandise.

2. MACRI-ECONOMICS (The Economist)
Oct 31, 2015

A profile of a possible president

MAURICIO MACRI’S path to politics was an unusual one. On a winter’s night in 1991, as he was walking through his posh neighbourhood in Buenos Aires, he was attacked by three men. The assailants—corrupt police officers, perhaps—punched him in the face, bound his hands with wire and shoved him into a coffin in the back of a Volkswagen van. Mr Macri was held for two weeks before his father, a prominent Argentine businessman, paid a $6m ransom.

Mr Macri says that this trauma led him to a career in public service. He gained fame by running Boca Juniors, a football team, for a dozen years until 2007, was elected to Congress and is now mayor of Buenos Aires, Argentina’s richest and most populous city. He stands a good chance of winning Argentina’s presidential election in November.

His success does not come from personal magnetism. He rarely smiles when cameras are not present. In meetings he comes across as aloof, even apathetic. His speeches lack zest and originality. Perhaps realising he will never inspire a cult of personality, he opted to be a consensus-forger and team-builder. The party he founded and leads, Republican Proposal (PRO), started out on the right but has become more inclusive. It is non-Peronist—the political current to which his presidential rival, Daniel Scioli, belongs—but is not anti-Peronist; many ex-Peronists work alongside the party’s conservative founders.

As mayor, Mr Macri improved infrastructure, especially transport, and developed poor neighbourhoods that his predecessors had ignored. Colleagues say he encouraged them to innovate. Banco Ciudad, the municipal bank, began hiring on merit rather than connections, says Federico Sturzenegger, a PRO congressman who ran the bank.

To secure the presidency, Mr Macri will need to change the perception that he is a cold-hearted capitalist, born to privilege. “He seems to favour businesses over people, whereas I want a more inclusive government,” says Mariel García, who works at a corner shop in Palermo, a leafy neighbourhood in Buenos Aires.

While promising change, Mr Macri assures voters that it will not be too abrupt. He would end exchange controls and allow the peso to float, but has promised not to undo the nationalisation of pension funds or of YPF, an oil giant. He would leave generous welfare programmes untouched. Voters want a president who will fix the economy without leaving anyone behind. Mr Macri may be the one to convince them.

By Katia Porzecanski
October 29, 2015

* Citigroup says 2033 bonds may jump 5% on Macri victory
* Macri is now favored to win presidency in election next month

A victory by Mauricio Macri in Argentina’s presidential election next month is poised to hand a big windfall to hedge funds.

After finishing in a surprising near-tie with frontrunner Daniel Scioli in first-round voting on Sunday, Macri is now the favorite to emerge victorious on Nov. 22. Citigroup Inc. has put his odds of winning the runoff at 55 percent.

For hedge funds run by the likes of George Soros and Daniel Loeb, Macri’s promises to settle Argentina’s decade-long debt dispute with creditors and jettison polices that have held back the economy may dramatically boost the value of their bond investments. For example, defaulted bonds due in 2033 may jump at least 5 percent from their current price of about 110.5 cents on the dollar if Macri prevails, according to Donato Guarino, a strategist at Citigroup.

“We’re now in a scenario where you have to have exposure to Argentina and it’s going to pay off,” said Luciano Cohan, the chief economist at Buenos Aires-based research and consulting firm Elypsis. His was the only company to correctly predict the outcome of Sunday’s elections.

A price of 116.25 cents assumes past-due interest that currently totals about 15 cents. It’s also based on an expectation that, in a Macri presidency, Argentina will trade in line with sovereign borrowers that have ratings in the B tier, Donato said in an Oct. 27 report.

Argentina’s foreign debt is currently rated Caa2 by Moody’s Investors Service, which is eight levels below investment grade. Standard & Poor’s has a SD, or selective default, grade on overseas debt.

Even though Argentina defaulted last year after President Cristina Fernandez de Kirchner refused to comply with a U.S. court order to pay holdout creditors led by billionaire Paul Singer, the country should be rated as high as BB- regardless of who becomes president, Guarino said.

He cited Argentina’s per-capita income and potential economic growth among his reasons.
Guarino said the 2033 notes may fall as low as 103.75 cents if Scioli wins. Scioli, the ruling party candidate, has pledged to make only limited changes to the polices of his predecessor.

“While Scioli is likely to attempt a rapid agreement with holdouts, we believe this would be driven by his more gradualist approach, which will require higher USD financing needs,” Guarino wrote. Argentina is likely to issue more debt under a Scioli government, “which should negatively impact prices.”

The prospect of a Macri win has already sent the nation’s bonds up an average 4.2 percent since Sunday’s election.

Robert Tancsa, a strategist at Morgan Stanley, estimates yields on the notes may fall to as low as 7.1 percent by the end of 2016 if the next president quickly adopts policies that help revive economic growth and slow inflation. The notes currently yield about 9 percent when adjusting for the past-due interest, according to Bloomberg estimates.

If Argentina continues with Fernandez’s policies, yields could go to about 12.6 percent, according to Tancsa.

“A front-loading of policy adjustments and reforms, including the settlement with the holdouts, would be welcomed by investors,” Tancsa said in an e-mail.

By Pablo Rosendo Gonzalez
October 29, 2015

* Production will be 9.5 million tons in 2015-2016, bourse says
* Farmers switch to barley to avoid government regulations

Argentina’s next wheat harvest may be the smallest in three years, according to the Buenos Aires Grain Exchange, a decline that may spur Brazilian flour mills need to import the grain from other countries.

Argentine farmers will produce 9.5 million metric tons of wheat in the 2015-2016 season, down 16 percent from a year earlier, the exchange said Thursday in its first wheat forecast.

since 2001
since 2001

Farmers are switching to unregulated crops such as barley because the government charges wheat export taxes of 23 percent and restricts shipments to other countries. Wheat exports are permitted after 6 million tons are produced for domestic consumption. There are no export taxes on barley.

“We have had more barley than expected this winter,” Diego Ubici, an agriculture engineer from Agropulso, a seed and fertilizer reseller in America City, in Buenos Aires province. “Farmers were not selling waiting for a new government.”

By Hugh Bronstein
October 29, 2015

Oct 29 Argentina’s outgoing leader Cristina Fernandez gave an emotional campaign speech on Thursday in her first public address since a surprisingly weak performance by her party’s candidate in the first-round presidential election on Sunday.

Without mentioning allied candidate Daniel Scioli by name, the leftist president implicitly backed him by calling for her progressive social policies to go on after she hands the presidency over to her successor in six weeks.

“Who is the candidate who can guarantee our policies continue?” Fernandez asked in a clear reference to Scioli.

“What’s important is that our policies are carried on. Names are not important,” she said at a televised rally before thousands of applauding and chanting supporters.

Scioli, who did not attend the event, is running against opposition leader Mauricio Macri in the Nov. 22 run-off vote.

Macri defied opinion polls on Sunday by getting enough votes to easily force a second round.

At stake is the future of Latin America’s No. 3 economy at a time of dwindling foreign reserves and high inflation left by eight years of free-spending populism under Fernandez.

“I am not a candidate for anything,” said Fernandez, who is barred by law from seeking a third consecutive term this year.

“But when I leave, please God, I don’t want to see ruined what it took us years to build!” she said, her voice breaking with emotion while some listeners at the rally wept.

Loved by many of the country’s poor for strengthening Argentina’s social safety net, Fernandez could return as a presidential candidate in 2019.

Macri promises a sharp turn toward free-market policies while Scioli vows to continue the programs that are working for the poor while gradually changing macro-economic policies where a more orthodox approach is needed.

Fernandez took a few shots that appeared to be aimed at Macri, although she did not name him, alluding to him changing his position earlier this month regarding Fernandez’s nationalization of Argentina’s main energy company YPF and airline, Aerolineas Argentinas.

“We, with all our errors and defects, are who we are. We are not one thing one day and something else another,” she said.

When first elected in 2007, Fernandez was helped by high prices for soy and corn, the country’s main cash crops, which helped her fund subsidies and generous welfare programs.

But the grains boom has ended, leaving her government short on cash and without access to the international debt market due to an ongoing sovereign bond default.

By Robie Mitchell, Research Associate at the Council on Hemispheric Affairs
October 29, 2015

Argentina’s run-off elections on November 22 will not only be a test for outgoing President Cristina Fernandez de Kirchner and her mission to see if she can successfully coronate Daniel Scioli of the Partido Justicialista (PJ) as her heir, but the elections also represent a test for the Peronist movement. Since the fall of the military junta, Peronism has dominated the political arena. Political newcomers such as the center-right Propuesta Republicana (PRO) party have begun to challenge Peronists’ historic dominance. Notably, there is a fundamental split between left-wing Peronism of the PJ and the right-wing Peronism of the Frente Renovador (FR). Regional and class divisions have long existed within the Peronist movement, but President Kirchner’s attempt to raise export tariffs in 2008 on agricultural products set the powder keg alight and made leaving the PJ a compelling move for rural Argentinians.1 The Dissident Peronist party FR was created in the still-relevant aftermath of this aborted tax hike. Preventing the Argentinian Peso from further decreasing in value, keeping foreign reserves from falling, dealing with high inflation, and making debt payments on time will keep whoever wins the presidential election well-occupied, be it Daniel Scioli of the PJ or Mauricio Macri of the PRO2 Past leaders of an ideology as inconsistent and all-encompassing as Peronism, including Juan Peron himself, have had enough trouble governing Argentina without having to worry about these heightened internal and external political threats.

Accordingly, Argentina’s need for a strong leader with a clear vision and a stable party would not have boded well for any Peronist winner, whether it had been Scioli or the farther right Sergio Massa of the FR, as the broad ideological struggles over the depth and type of proper government intervention in the market undermines their movement and serves as a distraction to actual governance. The difference of opinion between fellow Peronists is far less than that of any given Peronist and non-Peronist politicians like Macri; compromise between the PJ and FR should come naturally. However, history complicates this seemingly simple picture of an ideology that is fracturing itself.

Scioli narrowly won last Sunday on October 25. Due to a split within Peronism that divided votes between Scioli and Massa the margin of victory could have been substantially higher and sufficient to avoid a run-off election. Notwithstanding the recent victory, and Scioli’s attractive odds for winning again on November 22, staying relevant in the 21st century will require Peronists to move back towards the center of the political spectrum and start consolidating their ideology. The tightness of the race reveals the challenges faced by Peronism. In spite of Cristina Fernandez de Kirchner’s endorsement, Scioli failed to garner 45 percent of the popular vote and win the election outright.3 In a remarkably close election with 84 percent of the polling stations reporting, Scioli won 35.7 percent of the vote and Macri took 35.3 percent.4

Defining Peronism

Current Peronist leaders, who share a common political mythos, define Peronism in a variety of ways. Broadly speaking, it is the populist ideology that fought back against foreign imperialism in the mid twentieth century before its founder Juan Peron was overthrown by the military. Agreeing on its details can prove to be a contentious process. Yet, across the board some commonalities remain, including the social classes and regions that they can count on for their support. Carlos Menem’s conservative platform in 1995 and Kirchner’s liberal platform in 2011 drew heavily from the same base.5 Both Menem and Kirchner won landslide victories around the industrial belts of Rosario, Córdoba, and Buenos Aires. Poorer, conservative, and rural interior provinces have also gone for Peronists consistently for the past thirty years.6 Edward L. Gibson has described the Peronists as a “two-headed party with a progressive urban and a more conservative rural base.”7 The redistribution that has characterized Kirchner’s two terms in office, which was a carryover from her husband’s 2003 presidential term, has required high levels of public spending.8 While these policies have increased Kirchner’s popular political support, especially when they are coupled with Kirchner’s devaluation of the peso they have also brought the threat of uncontrollable inflation. Kirchner’s distinctly leftist twist on Peronism is the main source of the ongoing split between mainstream Peronism and Dissident Peronism.

If mainstream Kirchnerist Peronism and Dissident Peronism cannot reconcile their differences soon, by the next election cycle their public split could open the path for non-Peronist parties to dominate Argentinian politics. The presumption that Scioli, who Kirchner endorsed as her successor and the nominee of the PJ, will win and will preserve Peronism in the short-term is a safe one, given the lead that he enjoyed in the polls throughout the summer and his performance on Sunday.9 On the other hand, Macri (a non-Peronist) and Massa (the leader of the Dissident Peronists) have been consistently polling in second and third place, respectively, which is exactly how they performed in the election. Essentially, between polling data collected over the past year and the candidates’ actual performance in the recent election, the electoral math still favors the PJ for November 22. A broader look at Argentinian politics, however, shows that growing support for Macri and his Propuesta Republicana is correlated with intensified divisions among Peronists. Further, Scioli’s performance on Sunday does not come close to the outright victory that Kirchner had in 2011, with 54 percent of the vote.10 It is plausible that the run-off could have been avoided had Scioli and Massa not competed for support from a similar base. Any Scioli victory will almost certainly lack the popular mandate that Kirchner had in both of her elections, signifying the growing problems that both Peronist parties will have as newer parties emerge to exploit their conflicts. Governing will also prove to be more challenging without the bully pulpit that a clear victory provides. A return to the pre-2005 political order, where Peronists were united in a single party, might be too much to expect. Without some political consolidation, prospects for continued Peronist domination of Argentina are murky, but are still a possibility.

Peronism’s Historical Track Record

During a time that Peronists are experiencing historically unprecedented infighting, why should Argentinians, as well as international observers, desire continued Peronist influence? For one, there is a reason why Peronists have won nine out of eleven open Argentinian elections (which military leaders have not barred them from participating in) since 1946. Rapid changes in Argentina’s economic and social order in the aftermath of the Great Depression necessitated new political thinking. In the midst of World War II, industrial growth intensified and over a million Argentinians moved from rural areas greater Buenos Aires.11 Debates over the role of the state in the economy were a natural consequence of a mobilized labor force that drove growth in the industrial and commercial sectors.12 Peron rejected laissez-faire liberalism in the 1940s and criticized it as an outdated ideology that would leave many Argentinians out of the economic boom that was starting during World War II.13 In his first term, President Peron fought the landed elites to finance industrialization and to promote social reforms14. An essential component of Peron’s industrialization was that it was nationalist. After the coup against Peron, foreign capital came to dominate Argentina.15 The course that the military charted condemned Argentina to industrial dependency. When Peron returned from exile to serve a third term, mass mobilizations were used to carry out reforms.16 Peron led a political program supported by a diverse coalition that championed the workers, earned profits for Argentinian businesses, and combated foreign imperialism.17 Peronism faces the challenge of keeping foreign monopolistic capital from dominating the Argentinian economy as well as keeping the country’s working classes interested in a symbiotic relationship with domestic Argentinian businesses.18

Critics cast the economic state intervention that is championed by Peronists as a stepping stone towards authoritarianism, arguing that one cannot have political freedom without economic freedom.19 But whose freedom is being restrained by Peronist policies of market intervention? Corporations, more often than individuals, have been the targets for Peronists measures that limit economic freedom. Peronist ambivalence towards unrestricted capitalism is not unfounded within the context of Argentinian history. Even though Argentina opportunistically served as the breadbasket for the Allies during World War II, prosperity failed to trickle down to working class Argentinians. In Juan Peron’s first term Peronist agencies distributed millions of consumer goods, from sewing machines to toys.20 Between 1946 and 1952 the number of hospital beds in Argentina doubled and more than 100,000 units of public housing were constructed.21 Funding these welfare programs did require higher taxes on corporations. Juan Peron enacted stricter controls over freedom of expression in order to mold a consensus that these taxes were justified.22

Peron should have been able to sell his expansion of the Argentinian system of social welfare on its merits alone, without using coercive measures. If modern Peronists like Kirchner and Scioli seek to draw parallels with the benefits of their namesake leader Juan Peron, then it is only fair that they get stuck with the drawbacks of that association. It goes too far to imply that Peronism leads to authoritarian rule, but for some leaders it is a very short leap to go from reigning in corporate excess to reigning in democratic opposition. Peronist leaders have another incentive to become authoritarian in that they are sometimes tempted to control their wily coalitions with state power; Juan Peron himself was guilty of giving in to this temptation in his later years. Future Peronist leaders like Scioli, hopefully, can make that crucial distinction between appropriate constraints on corporate power and inappropriate limits on the necessary annoyances of democracy, like a tabloid media, while favoring the power of persuasion over that of decree.

Tension between different factions of Peronists is not a new phenomenon, but it is new in its scope. Despite economic progress under Peron’s first and second terms, tension between the left and right within the Peronist movement had been barely contained. It came to a boil during Peron’s third term as president when a gunfight erupted in 1973 between fellow Peronists. At least 16 people were killed by right-wing Peronists in the Ezeiza Massacre upon Juan Peron’s return from his long exile back to Argentina. The official death toll continues to be highly contentious, but there is no question that the horrific act of violence was perpetrated upon left-wing Peronists in an attempt to remove then-President Hector Campora.23 This intra-Peronist tension was arguably the inevitable result of managing what was in fact a foreign capitalist dependent economy.24 Without Peron’s magnetism, the ideological contradictions inherent in getting diverse Argentinian groups to cooperate revealed themselves. Reconciliation was possible during previous splits among Peronists and is likely possible again. Unfortunately, it was the military coup and a subsequent absence from Argentinian politics that eventually allowed Peronists to present a unified front against the Church, military, and the traditional parties that had ousted their leader from power.25 The Ezeiza Massacre shows how fragile their unified front was.

While Peronists were biding their time on the sidelines, the military mismanaged the economy. By 1970, Argentina was more fragmented socially than ever before, suffering high inflation, heavy taxation, frequent bankruptcies in the private sector, while witnessing the deterioration of health and education programs.26 A combination of Scioli’s leadership and cooperation within the Peronist movement can lead to differences being sorted out before far-right forces can take over both the legislature and the presidency. Ascension to the upper echelons of government by a far-right party would undoubtedly cause Argentina’s government to bow to foreign capital. If that happens, similar problems to those of the 1970s could arise before Peronists can remind the public of the upsides of appropriate state intervention in the economy and a developed welfare system funded by a strong export sector, key aspects of Juan Peron’s legacy.

Peron’s past management of an internal Argentinian class struggle can inform current Peronist leaders who seek party unification, or at least ideological coalescence between the PJ and the FR, what that process might look like. Indeed, Peron went beyond merely accepting the class struggle inherent in his movement, and went on to exploit it to better both his political odds and the well-being of Argentinians. When Peron was in exile, he built his new coalition from below, with recruits motivated by desperation that the military leaders that had ousted Peron had foisted on them27. Peronism ditched its former top-down recruitment strategy, which was made possible by the prosperity displayed in 1950s Argentina, and took on the tone of a liberation movement.28 The nationalist and imperialist cleavages that Juan Peron exploited to win his first two terms were replaced, in part through a changed coalition building strategy, by proletariat and bourgeois ones29. Scholars such as Alberto Ciria think that a direct focus on class might make national liberation without socialist revolution impossible, but that assertion remains to be proved. Instead of ignoring the class fight inherent in Peronism, Peronists need to embrace it. Instead of fearing that this class fight will inevitably lead to unfettered socialism, they need to keep championing a third way.

Kirchnerism, serving as a third way of sorts, still ignored fiscal realities and lacked the unifying force of Peronism in the 1950s in three ways. Firstly, the agricultural tariff debacle of 2008, where Kirchner attacked agricultural exporters and her rural constituents, exemplifies her shortcomings compared to Peron. Whereas Peron went after the rich landed aristocratic class with his agricultural reforms, Kirchner attempted tax hike would have hurt the poor. Her second economic shortcoming compared with Peron is that she turned the Argentinian economy towards extraction and away from sustainability. Europe’s devastation presented a unique opportunity to Peron to export Argentina’s wares and industrialize in his first two terms. Similarly, growing demand from Asian economies presented an opportunity for Kirchner during her two terms in office to sustainably grow Argentina’s economy. Yet, she did not take this as an opportunity to diversify the Argentinian economy. Third of Kirchner’s economic failures is her divisive programs of redistribution that are driven by inflationary monetary policies. They are not in line with the coalition building approach taken by Peron himself that took the interests of domestic producers into account. The increasingly hard line that she has used to deal with legislators and the media is also troublesome, given the history that Argentina has had with military strongmen. There is a fine line between being a strong leader and being an authoritarian that she gets dangerously close to. Kirchner did not deviate from Peron’s legacy in this regard; both leaders are equally guilty of a tendency to lean too heavily on authoritarian and unilateral action.

Applying theoretical lessons from Peron’s experience in reforming Argentine institutions to contemporary politics is paramount to the success of future Peronist leaders. After all, it was his initial reforms that allowed him to return to Argentina and secure a third term. Peron was a steward of economic growth and brought out common interests between domestic industrialists and laborers. Kirchner, while a Peronist in name, is not always a Peronist in either her governing style or her policies. Polls suggest that Scioli will win the run-off election and that he will have a majority in the legislature to help him pass his moderate agenda, which harkens back to the early days of Juan Peron, with gradual changes. In the face of problems such as social unrest and rising inflation that are similar to those of the early 1970s that unseated the military and restored Peronism, Scioli will need to lead with a large coalition and speak for competing interests, just like Juan Peron. Learning from Kirchner’s mistakes will be essential in guiding Argentina out of the choppy waters that surround it.

Scioli: Puppet or Prophet?

Barring an endorsement of Macri from Massa, a victory for Scioli seems likely. So long as a Macri-Massa alliance does not emerge in the coming weeks, Scioli is almost assured an ascent to the presidency. As president it will be up to him to be a unifying force in these divisive days within his country and his party. Eliminating the divide within the Peronist movement so that Peronist solutions can be used to tackle Argentina’s economic crises in the long-term will require political independence for Scioli, something that he might be lacking. Frequently, Argentinian voters see Scioli as Kirchner’s puppet.30 Kirchner’s backing helped Scioli secure his left flank and gain popularity among the working classes, but it could serve as a double-edged sword. Both Massa and Macri, Scioli’s main rivals for the presidency, have accused Scioli of owing a massive political debt to Kirchner that will impinge on his freedom to make his own decisions31.

Consequently, this would-be reformer of Peronism could run out of political capital quite early on in his term. And if Scioli bucks Kirchner’s control and attempts to bring Peronism back to the center by liberalizing the Argentinian economy, reduce subsidies, and reign in the heavy spending that has led to inflation, then there is a possibility that she will run for president in the next election cycle. She could legally choose to do this because Argentinian election laws only forbid holding the presidency for more than two consecutive terms, allowing her a separate third term. It is with this threat hanging over him that Scioli must make his reforms that will bring his party closer to Peron’s original political platform and away from the Kirchnerist interpretation of Peronism that has sown divisions among the PJ. The run-off could be the last electoral chance for Peronists to show the Argentinian people that they can present a unified ideological front. Without unification it will be difficult for the party to maintain the trust and confidence of the Argentinian people for elections. On top of this, the fracturing of the party will only weaken the political capital of Peronists and thus reduce their ability to effectively govern if elected. And without Peronists in power, the influence of foreign vulture funds and other forms of foreign investment capital over Argentina will continue to increase, making a resolution for Argentina’s economic malaise ever less likely.

By Belén Marty
October 29, 2015

Mauricio Macri Is No Liberal, but He’s as Close as We’re Going to Get

If last Sunday’s Argentinean presidential election was a pie, no ingredient was missing from the recipe. It had everything: uncertainty, hope, participation, disbelief, faith, and, the key to it all, surprise.

It carried the strong aroma of potential change, one that’s only made sweeter after 12 years of die-hard Kirchnerism.

With over 97 percent of the votes counted, the candidate backed by President Cristina Kirchner, Daniel Scioli, emerged in first place with 36.86 percent of the vote. A Pyrrhic victory, considering the 34.33 percent secured by his conservative rival, Mauricio Macri, of the opposition Let’s Change coalition. Macri even led in the polls for a good part of the night.

It was a huge surprise. No pollster could have imagined that Macri would only lose by two points. Only days ago, most polls showed Macri trailing by six points behind Scioli. Now the two candidates will square off in a runoff set for November 22, and Marci is in a strong position to pull ahead.

That’s the reason why, during the first few minutes of Monday, October 26, when election authorities first released preliminary results that showed Marci in the lead, euphoria overwhelmed the people of Buenos Aires.

Macri, the current mayor of the Argentinean capital, won a clear victory in the town he has governed for eight years with 50.55 percent, doubling Scioli’s 24.09 percent.
The first indications of Macri’s strong performance exhilarated the residents of various neighborhoods throughout the city, where people began making loud noises, honking their car horns, and shouting “Vamos Argentina!” (Let’s go Argentina) and “Viva la patria!” (Long live Argentina).

But why did porteños react so viscerally, as if they were experiencing great relief? Why did Macri garner such intense support?

Let’s be clear: Macri is not a liberal; never has been, and never will be. He’s a statist, just like every other Argentinean politician. As mayor of Buenos Aires, he raised taxes, created a Ministry for Modernization in order to “modernize” bureaucracy, and increased the budget for “official advertising,” which could easily be confused for political propaganda.

Beyond that, he promised to keep the state-run Aerolíneas Argentinas under government control, and pledged to not only not reduce subsidies for the airline, but expand them.

However, unlike the Kirchneristas, he is at least open to debate. He promised, if elected president, to offer press conferences and not just national broadcasts like Kirchner, and has talked about promoting entrepreneurship.

He has said that he will combat inflation, unlike the current government that denies the problem even exists and doctors the official numbers. He has vowed to bring in investment by establishing clear rules and legal security.

Without much philosophical rhetoric or ethical arguments, like the pragmatist that he is, he believes socialism doesn’t work.

By Frida Ghitis
Thursday, Oct. 29, 2015

Latin America is reaching a quiet but remarkable turning point, one that, though occurring without much fanfare, has significant historical resonance. This past weekend, voters in several Latin American countries participated in national and local elections, and the process unfolded for the most part peacefully. That in itself is an achievement. But what is most noteworthy is that the outcomes of the elections were decided by the actual votes cast, and by extension the voters, rather than by fraud or violence. That, of course, is how democracy is supposed to work, but it is not always the case.

When viewed from regions where democratic traditions have grown deep, strong roots, this hardly merits mentioning. But in Latin America, where the soil has proved unhappily fertile for dictatorships, coups and personality-driven populism, where Marxist revolutionary conflicts have outlasted the Cold War, and where opposition leaders are still imprisoned on trumped-up charges, the largely peaceful festival of democracy that just took place is a rather notable feat.

And it’s more than that. It is a warning to the many remaining demagogues in the region that the public is growing tired of the manipulations of the democratic process that entrenched political leaders and their parties have come to rely on to stay in power.

The voters spoke in Argentina, Colombia and Guatemala.

Each of the three countries is unique, facing distinct challenges and choices. But if there was a common thread running through the results, it is that voters tended to stay away from the most radical partisans on either side of the spectrum. In doing so, they at times defied the wishes of the most powerful political players and the predictions of the pollsters.

In Argentina, the main event was the first-round vote for a new president to replace Cristina Fernandez de Kirchner, who is ineligible to run for a third consecutive term. Fernandez succeeded her late husband, Nestor Kirchner, meaning that the family has governed the country for a dozen years, using a controversial and eclectic formula of leftist populism that has inflamed social divisions, among other harmful side-effects.

Fernandez anointed Daniel Scioli, a former speedboat racer and governor of Buenos Aires province, as her successor. Pollsters had predicted he would win by a landslide, saying the only question was whether he would capture victory without the need for a run-off. But voters had a different idea and shocked the experts. Scioli came out in first place, but just barely, taking a disappointing 36.9 percent, just ahead of his main rival, Buenos Aires Mayor Mauricio Macri, at 34.3 percent. It was an energizing result for Macri, who emerges with strong momentum, and a demoralizing one for Scioli, Fernandez and their supporters. Many voters said they were tired of the divisiveness of the Kirchner dynasty. Others said they worried that a Scioli victory would leave Fernandez in control behind the scenes, with the outgoing president preparing for a future return to power.

Ahead of the Nov. 22 run-off, Macri has the psychological advantage, though both candidates are vowing to move to the center where the political advantage now seems to lie.

In Colombia, voters also voted against the extremes and for the normalcy of the center. Utopian promises hold no allure in a country that has endured half a century of Cold War-style revolutionary conflicts and unceasing violence.

The local elections there came with a reminder that the fighting is not over, even if peace talks with the FARC guerrillas seem close to completion. An attack by a smaller leftist guerrilla army, the National Liberation Army (ELN), killed 12 security forces transporting ballots back to Bogota, the capital. Still, it was the most peaceful election Colombia has seen in living memory.

The most important of the more than 1,500 races for governors, mayors and city councils that took place was the contest for the new mayor of Bogota, widely seen as the second most powerful post in the country. Voters could not have spoken more clearly. They ended 12 years of ideologically infused leftist control of the city and elected Enrique Penalosa, an independent candidate who is neither an ideologue nor a populist, but a technocrat.

Penalosa’s campaign slogan was “Let’s take back Bogota,” and it was backed not just with the experience of his previous successful term at the city’s helm, but by a list of specific projects, including more public transportation to solve the city’s nightmarish traffic and transportation problems, as well as more green spaces and bicycle paths to improve the quality of life in the city. The contrast with outgoing Mayor Gustavo Petro, a former guerrilla leader whose tenure has been marked by bitter political acrimony and devastating administrative incompetence, could not be sharper.

But while voters dealt a blow to the left in Bogota, the right suffered a painful defeat of its own in the country’s second city, Medellin. There, the pollsters had predicted victory for Juan Carlos Velez, the mayoral candidate backed by former President Alvaro Uribe, who has become a vociferous opponent of the peace process and of the current government. As in Bogota, the voters ignored the polls, the pundits and the ideologues, handing a narrow victory to the centrist candidate, Federico Gutierrez.

With hundreds of seats up for election, every party had something to celebrate, and every party declared victory. But the main trend in key races was a move away from the extremes.

Elections also took place in Guatemala, where the notoriously corrupt country is in the midst of a political earthquake. Last month, former President Otto Perez Molina resigned due to corruption charges and was promptly arrested days before the first-round voting for a new president took place. This weekend’s run-off ballot pitted a former first lady, Sandra Torres, against a comedian with no political experience. The comedian, Jimmy Morales, won in a landslide. It was yet another sign of popular disgust with the political class, although the fight for a clean democracy in Guatemala is far from over, especially as plenty of questions remain about who is funding Morales.

It’s worth noting that perennially troubled Haiti, not a Latin American country but a Caribbean neighbor, also held a presidential election that was astonishingly peaceful, with 54 candidates running for president. It’s the first time in Haiti’s history that three successive elections have been held without major fraud or violence. That’s just about the best news the country has had in a long time.

And it’s one more reason to celebrate a weekend of elections that, while far from perfect, constitute a step forward for the Sisyphean labor of developing a self-sustaining democratic tradition throughout the region.

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30 octubre, 2015

BsAs — NYTimes Report on 36 Hours on the Town.. Video.. ENJOY
















By Taos Turner
28 October 2015

Dissident Peronist politician who ran third in first round withholds support for Daniel Scioli

BUENOS AIRES—Sergio Massa, Argentina’s dissident Peronist politician and a potential kingmaker in next month’s runoff vote, snubbed the favored candidate of President Cristina Kirchner on Wednesday, saying he favors politicians who seek a new path for the country.

“Argentina needs change,” Mr. Massa said.

He hasn’t officially endorsed either of the candidates who bested him and who will contest the runoff—Daniel Scioli of the ruling Peronist Victory Front Party and Buenos Aires Mayor Mauricio Macri, 56 years old, a market-friendly businessman who heads the “Let’s Change” coalition. But Mr. Massa and his top allies are making it clear that they are eager to leave behind the policies of Mrs. Kirchner, who wanted her successor to be Mr. Scioli, a 58-year-old former powerboat racing champion who is governor of Buenos Aires province.

Roberto Lavagna, one of Mr. Massa’s top aides and a former economy minister, said he favored a break from the ruling party’s policies. “Clearly, change is a No vote for the Victory Front,” he said.

Another close and influential Massa ally, Gov. José Manuel de la Sota of Córdoba province, was more emphatic: “I’m not going to vote for Scioli.”

Mr. Massa, who was Mrs. Kirchner’s cabinet chief before breaking with her, called for both candidates to commit to a series of policy proposals ahead of the Nov. 22 second round, including plans to cut income taxes and combat corruption and narco-trafficking.

In comments made Tuesday, Mr. Massa suggested that Mr. Scioli wasn’t independent of Mrs. Kirchner, who has served two terms after succeeded her husband, Néstor, in 2007. Mr. Kirchner, who served one term, died in 2010.

“As long as he is not a leader of his own political force, he cannot govern anything,” Mr. Massa said of Mr. Scioli. He added that Mr. Scioli “has to stop being Cristina’s employee.”

At play are the 5 million voters who went for Massa, a 43-year-old former mayor of the sprawling riverine city of Tigre. In Sunday’s surprising results, Mr. Scioli fell short of what he needed to win the presidency outright, getting 37% of the vote to 34% for Mr. Macri.

Mr. Massa got 21%. But the politician, who has pointedly criticized alleged corruption in Mrs. Kirchner’s government, emerged as a force within Peronism, the ideologically pliable movement to which both he and Mr. Scioli belong.

“This is not about Peronism or anti-Peronism,” Mr. Massa said. “People have to choose between continuity and change. We’re choosing change.”

Analysts say it would be a mistake for Mr. Massa to openly endorse either candidate. Mr. Scioli could lose without Mr. Massa’s endorsement and the support of his voters. But if Mr. Massa endorses Mr. Macri, he could anger followers who aren’t ready to support a non-Peronist, particularly someone like Mr. Macri, who is seen as a friend of Wall Street.

A poll released Wednesday shows Mr. Macri beating Mr. Scioli 48% to 37% next month.

“Though we think these first results will not be definitive and include a good deal of inertia from the recent election, we see the odds of a Macri victory at 75%,” said Elypsis, an economic research firm, that closely predicted the first-round election.

What seems clear is that Mr. Massa is positioned to become the next leader of the Peronist movement if Mr. Macri wins the presidency, said Ana María Mustapic, a political scientist at Torcuato Di Tella University. “For Massa, it’s better for Scioli to lose badly,” Ms. Mustapic said.

Still, both candidates are trying to lure Mr. Massa and his supporters.

“We’re willing to agree on policies and to find common ground,” Mr. Macri said on Tuesday.

Mr. Scioli has said he is eager to listen to Mr. Massa’s ideas. “If you look at Massa’s voters you see that many are Peronists,” an aide to Mr. Scioli said. “In Scioli’s mind, they will vote for him, not Macri.”

October 28, 2015

Center-right opposition leader Mauricio Macri’s outstanding performance in Argentina’s Oct. 25 first round elections was a political earthquake that — regardless of who wins the Nov. 22 runoff vote — will most likely put an end to 12 years of leftist populist rule, and may have a big impact on other South American countries.

Macri, the mayor of Buenos Aires, surprised everybody by not only forcing a runoff election against government-backed candidate Daniel Scioli, but also by winning the giant province of Buenos Aires — home to 37 percent of the country’s voters and which had been in the hands of Scioli’s Peronist party for nearly three decades — and most of the country’s biggest provinces.

In addition, Macri and fellow opposition candidate Sergio Massa won enough seats in Congress to end President Cristina Fernández de Kirchner’s followers having an absolute majority in the Chamber of Deputies.

Most importantly, by doing much better than most polls had predicted, Macri has the political momentum. He enters the race for the runoff election looking like a winner.

Polls had placed him about 10 points behind the government’s candidate, and many had predicted that Scioli would win the overall election in the first round. Instead, Macri came in a close second, almost tied with Scioli, fueling speculation that he will be able to garner enough votes from defeated opposition candidates to win the second round.

Marci and Scioli’s demeanor on the night of the first round vote said it all. A radiant Macri made what amounted to a victory speech, with a peace-and-love message calling for national reconciliation. “Gracias! Gracias! Gracias!” he kept telling the crowd. Scioli, by contrast, looked like an angry, sour man, warning the nation of dire times if the country were to change course.

Scioli now faces a formidable challenge: If he moves to the center to expand his base, he risks losing the support of Fernández’s leftist populist political machine. If he shifts to the left to secure the government’s political machine, on the other hand, he won’t win many of the moderate votes he needs to expand his base.

To make things worse, relations between the outgoing president and Scioli, which had never been good, got worse after Sunday’s vote. Both sides blame one another for the poor results. Tensions are running high in government circles, government officials concede.

“If the government candidate wants to be president, he will have to stop behaving like a Cristina [Fernández] employee,” said Massa, the No. 3 finisher in first round election.

Massa has not supported either of the final candidates, but is more critical of Scioli than of Macri. Most of Massa’s supporters are tired of the Fernández government’s rampant corruption, mismanagement and authoritarian rule.

A source close to Massa, with access to his campaign’s internal polls, tells me Massa’s supporters are government critics who are likely to vote for Macri “by a bigger than 2 to 1 margin.”

However, this does not mean that an opposition victory is a done deal because many Massa supporters are “Peronists” — followers of the late general Juan Domingo Peron, like Scioli — who could be swayed by a Scioli campaign depicting Macri as an allegedly right-wing candidate who would dismantle social programs. That’s a message that could still work with many voters in Argentina, the Massa campaign source said.

Scioli’s strategy in a planned debate with Macri will be to focus on ideology, seeking to demonize his rival and present him as the candidate of the rich. Macri’s strategy, in turn, will be to focus on the government’s record of corruption, mismanagement, abuse of power and economic downturn, and to depict Scioli as a government peon.

My opinion: Argentina’s election is coming down to a choice between continuity and change, and — in a country with zero economic growth — Macri’s message of change may have the most appeal. Scioli could still win, but only if he changes course and distances himself from the government. Either way, this looks like the end of the leftist populist cycle in Argentina.

By Benedict Mander in Buenos Aires
October 28, 2015

Mauricio Macri vows to end Argentina’s long debt stand-off and drop capital controls on his first day as president, a prospect that is a real possibility after his strong showing in presidential elections on Sunday.

Investors cheered the stunning performance of the centre-right mayor of the city of Buenos Aires in Sunday’s first round of polls, buoyed by his pledge to abandon populist policies that have left the country’s economy teetering on the brink of crisis.

“This is a problem of trust. This government has destroyed trust among Argentines and the world,” said Mr Macri in an interview with the Financial Times, referring to fears that removing capital controls could trigger a run on the currency. “We are going to put Argentina back on a path to growth and back into the world.”

Markets have rallied on the prospect of a market-friendly Macri government after the first round left the challenger almost neck and neck with Daniel Scioli, president President Cristina Fernández de Kirchner’s chosen successor.

The winner of the run-off vote on November 22 will inherit an economy with a ballooning fiscal deficit, inflation of around 20 per cent and international pariah status in global capital markets following Argentina’s 2001 default.

The former president of one of Argentina’s most popular football clubs, Boca Juniors, Mr Macri singled out inflation as one of the most urgent problems, promising to bring it down to single-digits in “a couple of years”. “We can’t continue with this level of inflation,” he said.

Mr Macri also promised to be tough with “holdout” hedge funds demanding full payment on $1.3bn of defaulted bonds. But he said it was important to fix the long-running problem, which is blocking the country’s access to the international capital markets.

“That doesn’t mean that I won’t defend the interests of my country. I will be tough and severe in negotiations, but I don’t want to have a conflict, especially when there is no need to have one,” he said.

This is a problem of trust. This government has destroyed trust between Argentines and the world
– Mauricio Macri

Mr Macri stressed the importance of strengthening the rule of law and ensuring a regulatory framework that would stimulate investment, especially in infrastructure. He also accused the Fernandez government of cheating in official statistics as he promised to restore the credibility and independence of institutions, including the statistics agency and the central bank.

First, though, the 56-year-old son of a powerful Italian-born construction magnate needs to defeat the government-backed Mr Scioli in the second round vote next month that will bring an end to 12 years of populist rule by Ms Fernández and her late husband and predecessor, Néstor Kirchner.

Mr Scioli, who is the governor of the populous province of Buenos Aires that surrounds the city, won the most votes, with 36.9 per cent compared to Mr Macri’s 34.3 per cent. But Mr Macri argues that voters for the other four candidates — including Sergio Massa, a dissident Peronist, who came third with the support of 21 per cent — will choose him in the run-off.

“Those who didn’t vote for the government are looking for a change, so it is our responsibility now to be clear with them to show them that they can rely on us, and that we want the same things,” said Mr Macri.

Argentina’s economy a poisoned chalice for president’s successor whoever wins election inherits a ballooning fiscal deficit

“We are looking forward to sitting down [with Mr Massa] and finding agreement over policies, that’s the first stage. We want to go step by step,” said Mr Macri, who did not rule out the possibility of offering ministerial positions to Mr Massa, who was briefly Ms Fernández’s cabinet chief, in exchange for his support.

Nevertheless, Mr Macri admits to being surprised by his stunning performance in Sunday’s elections that left pollsters scrambling to explain how their predictions could be so wide of the mark.

“We were sure we were going to make it to the second round, but the results were amazing, amazing,” says Mr Macri. Many expected the Peronists to win outright on Sunday and extend their 70-year domination of Argentine politics.

“The government has been very successful in spreading the idea that they were invincible, that it was their destiny to rule this country forever. But suddenly on Sunday night we all realised that we could [do it]. Yes we can!” Mr Macri said.

After eight years at the helm of “one of the most important cities in the world”, Mr Macri now wants to move on. “We’re very proud of what we have done here with a very good team. We succeeded in putting Buenos Aires back into the world right at a time when Argentina was in conflict with the rest of world,” he said. “Now we are ready to run the country.”

By Carolina Millan
October 28, 2015

* Merval benchmark index rises to highest in more than a year
* Speculation increasing opposition’s Macri could win presidency

The rally in Argentine stocks this week after the better-than-expected performance by the opposition in Sunday’s first-round election may just be the beginning, according to Banco Santander Rio SA.

Argentine stocks could rally an additional 20 to 30 percent over the next three weeks ahead of a Nov. 22 runoff vote if opposition candidate Mauricio Macri consolidates his lead in polls, according to Walter Chiarvesio, an equity analyst at Banco Santander Rio in Buenos Aires.

The Merval extended gains Wednesday to surge the most in the world as investors anticipate a possible victory for the market-friendly Macri over ruling party candidate Daniel Scioli, who has campaigned on continuity with gradual changes. The utilities and banking sectors are the most attractive in the short-term, Chiarvesio said.

“The market is reacting to Macri’s good performance on Sunday and anticipating that Macri will win the election,” Chiarvesio said.

The Merval rose 7 percent to the highest since September 2014 at 3 p.m. in Buenos Aires, led by Banco Macro, which soared 15 percent to the highest price on record. American depositary receipts of Argentine stocks also jumped more than 10 percent in New York trading, led by banks including Macro, Grupo Financiero Galicia SA and BBVA Banco Frances SA.

Macri’s policy proposals include ending capital controls on his first day in office and settling a decade-long dispute with holdout creditors from Argentina’s 2001 default. A Gonzalez y Valladares poll published in Cronista on Tuesday showed Macri with 45.6 percent support for the second round, compared with 41.5 percent for Scioli.

By Carolina Millan
October 28, 2015

* Merval benchmark index rises to highest in more than a year
* Speculation increasing opposition’s Macri could win presidency

The rally in Argentine stocks this week after the better-than-expected performance by the opposition in Sunday’s first-round election may just be the beginning, according to Banco Santander Rio SA analyst Walter Chiarvesio.

Argentine stocks could rally an additional 20 percent to 30 percent over the next three weeks ahead of a Nov. 22 runoff vote if opposition candidate Mauricio Macri consolidates his lead in polls, Chiarvesio said in an interview.

The Merval rose the most in the world Wednesday as investors anticipate a possible victory for Macri over ruling party candidate Daniel Scioli, who has campaigned on continuity with gradual changes. The utilities and banking sectors are the most attractive in the short-term, Chiarvesio said.

“The market is reacting to Macri’s good performance on Sunday and anticipating that Macri may win the election,” Chiarvesio said.

The Merval rose 5.5 percent to the highest since July in Buenos Aires, led by Banco Macro, which soared 13 percent to a record. American depositary receipts of Argentine stocks also jumped more than 10 percent in New York trading, led by banks including Grupo Financiero Galicia SA and BBVA Banco Frances SA.

Macri’s policy proposals include ending capital controls on his first day in office and settling a decade-long dispute with holdout creditors from Argentina’s 2001 default. A Gonzalez y Valladares poll published in Cronista on Tuesday showed Macri with 45.6 percent support for the second round, compared with 41.5 percent for Scioli.

By Richard Lough and Maximilian Heath
October 28, 2015

Oct 28 (Reuters) – Ruling party candidate Daniel Scioli’s hunt for swing voters in Argentina’s presidential run-off vote suffered a blow on Wednesday when two of defeated candidate Sergio Massa’s top allies said they would not vote for him.

Jose Manuel De la Sota, the governor of Cordoba province and a senior figure in Massa’s alliance, said the leftist government of outgoing leader Cristina Fernandez had been “anti-federal and authoritarian” in style. Roberto Lavagna, a former economy minister, said he wanted to see “change”.

As Scioli and his conservative challenger scramble for Massa’s 5 million voters, politicians from Massa’ New Alternative alliance are meeting in a Buenos Aires hotel to draw up a blueprint of policy priorities.

Massa allies on Monday told Reuters that the document would have more in common with pro-business Macri’s campaign platform and would be a tacit “wink” in his direction. Massa, though, may not explicitly back one candidate of the other.
“Kirchnerismo has done no good for the country,” De la Sota told reporters, referring to the name given to the leftist populism of Fernandez and her late husband and predecessor Nestor Kirchner. “It has gotten drunk on power.”

Asked if he would vote for Scioli, De la Sota gave a categoric “No”.
Macri’s unexpectedly strong showing in Sunday’s ballot shocked the ruling Front for Victory party which had expected to win the election in the first round, or at least go into the second round with a wide lead.

Fernandez, a fiery leftist who often rails against Western excess, will leave behind a divided nation. She is hailed by the poor for expanding social welfare programs and protecting local industry but loathed by others who blame her for strangling the economy.

Massa’s camp says the policy blueprint will lean heavily on his first-round campaign pledges: fighting inflation, scrapping the income tax for workers and removing hefty taxes on corn and wheat exports.
Scioli promises to maintain Fernandez’s social safety net and talks only of gradual change to her protectionist policies that include trade and capital controls.

Macri promises fast-moving reform to dismantle the controls. Massa had pitched himself as a middle-way candidate.

“Personally I am in the change camp. We need to have a clear understanding what change means. But in any case, it is not a vote for the Front for Victory,” said Lavagna, who had served under Nestor Kirchner before splitting with him. Lavagna was touted to return to the Economy Ministry had Massa won.

By Richard Lough and Maximilian Heath
October 28, 2015

Defeated Argentine presidential hopeful Sergio Massa unveiled key policy demands on Wednesday and said his 5 million supporters would vote in next month’s run-off election based on how the two remaining candidates respond.

Massa, whose plans ranged from cracking down on drug-runners to scrapping income tax for workers, stopped short of endorsing either ruling party candidate Daniel Scioli or his conservative rival Mauricio Macri.

“The stance that the two candidates take vis-a-vis these proposals will define where more than 5 million voters place their support,” he said.

Earlier, Scioli’s hunt for swing voters suffered a blow when two of Massa’s top allies said they would not vote for him.

Macri has the momentum early in the race to the Nov. 22 run-off after his strong showing in Sunday’s ballot defied polls and shocked the ruling Front for Victory party, which had eyed a win in the first round.

Jose Manuel De la Sota, the governor of Cordoba province and a senior figure in Massa’s alliance, said the leftist government of outgoing leader Cristina Fernandez had been “anti-federal and authoritarian” in style. Roberto Lavagna, a former economy minister, said he wanted to see “change”.

“Kirchnerismo has done no good for the country,” De la Sota told reporters, referring to the name given to the leftist populism of Fernandez and her late husband and predecessor Nestor Kirchner. “It has gotten drunk on power.”

The policy blueprint leaned heavily on Massa’s first-round campaign pledges and included scrapping the income tax for workers, removing hefty taxes on corn and wheat exports, tackling narco-gangs and stamping out corruption.

“Between change and continuity, change has already won,” Massa said. “Now what we need to construct is intelligent change.”

Massa allies on Monday told Reuters that Macri would find more common ground with the policy priorities than Scioli and that the document would be a tacit “wink” in Macri’s direction.


Although the lawmaker who split with the ruling party in 2013 is in a strong position to influence the outcome of the run-off, he has ducked playing kingmaker.

Doing so could risk the ambitious 43-year-old’s power base. Many of his supporters blame Fernandez for hobbling the economy but view Macri as beholden to big business. Others balk at the prospect of four more years of brazen leftist populism under Scioli.

“He can insinuate, say change is desirable and let voters chose their own path. There is no need for him so split his own force,” said political analyst Federico Thomsen.

Fernandez, a fiery leftist who often rails against Western excess, will leave behind a divided nation. She is hailed by the poor for expanding social welfare programs and protecting local industry but loathed by others who blame her for strangling the economy.

Scioli promises to maintain Fernandez’s social safety net and talks only of gradual change to her protectionist policies that include trade and capital controls.

Macri promises fast-moving reform to dismantle the controls. Massa had pitched himself as a middle-way candidate.

Massa broke from the ruling party in 2013 and is a strong critic of Fernandez. On the campaign trail, however, he also warned Macri could drive the economy into a new crisis by imposing pro-market reforms too abruptly.

“We need to have a clear understanding what change means. But in any case, it is not a vote for the Front for Victory,” said Lavagna, who was touted to return to the Economy Ministry had Massa won.

By Nate Raymond
October 28, 2015

Oct 28 Days after an election sent the Argentine presidential race into a runoff, a U.S. judge on Wednesday urged the South American nation to resume talks to settle bondholder litigation flowing from its $100 billion default in 2002.

U.S. District Judge Thomas Griesa in New York made the remarks as creditors suing over defaulted bonds urged him to expand to nearly $8 billion the amount Argentina must pay them to service its restructured debts.

Griesa did not reference Sunday’s election to replace Argentine President Cristina Kirchner Fernandez, whose administration has called the suing creditors “vultures.”

But he noted Argentina previously declined to participate in settlement negotiations and said he assumed “at this late date in this very lengthy litigation that attitude is over with.”

“The way to ultimately resolve this litigation must come through settlement,” Griesa said.

The comments came during the latest hearing litigation by creditors seeking full repayment on Argentine bonds following the country’s 2002 default.

The holdouts spurned Argentina’s 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

Wednesday’s hearing concerned whether Griesa should order Argentina to pay 530 creditors seeking $6.15 billion when it services its restructured debt.

Those creditors were seeking the same treatment as several hedge funds the country was ordered to pay $1.33 billion plus interest.

That decision, which the U.S. Supreme Court declined to review, pushed Argentina into default again in July 2014 after it refused to honor Griesa’s orders and failed to settle with the holdouts, who with interest are now owed $1.76 billion.

Robert Cohen, a lawyer for Elliott Management’s NML Capital Ltd, a lead holdout, argued on Wednesday that expanding the amount of debt subject to an injunction would be a “plus not a minus” in facilitating a settlement.

Carmine Boccuzzi, Argentina’s lawyer, countered that doing so would complicate settlement talks by expanding the number of holdouts with “veto power” over a deal.

The hearing came after Sunday’s presidential election in Argentina to determine who would succeed Fernandez ended with a strong showing from a pro-business opposition candidate.

A run-off between opposition candidate Mauricio Macri and ruling party candidate Daniel Scioli is scheduled for Nov. 22.

By Hugh Bronstein
October 28, 2015

The surprisingly strong showing by Argentina’s opposition presidential candidate last weekend could prompt higher than expected corn exports at a time when U.S. farmers are already nervous about their competitiveness.

Mauricio Macri defied the opinion polls by easily forcing a run-off with ruling party candidate Daniel Scioli. Macri says he would scrap corn and wheat export curbs and eliminate export taxes on both crops while Scioli keeps his platform more vague.

Farmers say Macri’s policies would be a huge incentive for them to switch some soy fields over to corn after years of neglecting crop rotation due to interventionist government policies that have hammered down corn’s profitability.

Macri, a proponent of free markets after eight years of heavy state controls under outgoing President Cristina Fernandez, has the momentum going into the final vote on Nov. 22. But Fernandez-ally Scioli is still very much in the race.

With this season’s wheat already in the ground, Argentine growers are planting soy this month through December while late planting in the main corn belt extends into the early January dog days of the Southern Hemisphere summer.

The Buenos Aires Grains Exchange had forecast 2015/16 corn planting would fall to 2.7 million hectares from 3.4 million in the previous year — a prediction made before Macri’s pundit-defying electoral shocker on Sunday.

“If the political signals are right, we could see the same corn area planted this year that we had last year,” said Martin Fraguio, executive director of the Maizar corn industry chamber.

That would mean an increase in Argentine 2015/16 corn planting of about 25 percent over current estimates, which would add to the country’s exportable surplus.

So far in 2015, Argentina has shipped abroad 12.9 million tonnes of corn, according to official data.

Increased planting could put Argentina in contention with Ukraine, the world’s No. 3 corn exporter. It could also prompt the U.S. Department of Agriculture to reverse course on its Argentina export outlook for 2015/16, which it trimmed by 1 million tonnes earlier this month to 14.5 million.
That would be a headache for U.S. corn farmers already grappling with a strong dollar. The muscular greenback has meant that growers in main rival Brazil, where the country’s currency has weakened by nearly a third this year, can offer lower prices.

The United States and Brazil are the world’s No. 1 and 2 corn exporters, respectively, followed by Ukraine, which ships around 17 million tonnes a year, and then Argentina.

Spot U.S. corn exports are currently offered around $180 per tonne FOB at the Gulf Coast, some $10 per tonne FOB above Argentine shipments.

U.S. shipments for spring — when the potential size of the 2015/16 Argentine harvest should be known — are being offered around $182 per tonne. Argentine exports are way below.

“The market is showing us that (export quotas) won’t be disturbing the market next harvest,” Santiago del Solar, who farms thousands of hectares in Buenos Aires province, said in an email.
“$140-143 per tonne is better than $130 we had a few weeks ago for April 2016,” he added.

But Solar also cautioned the area planted with corn this season might be restricted.

“We can expect more late-planted corn area this year, but only up to a point because a lot of us already have inputs and fields already prepared for soybeans,” he said.

Soybeans are exempt from Argentina’s export curbs but carry a hefty 35 percent export tax, which Macri says he wants to cut by 5 percent per year.

If export quotas are lifted on corn, farmers’ profits could catapult higher for the 2015/16 crop year, according to industry consultancy Agritrend. A farmer who owns his land could make profits of $672 per hectare on corn, up from $350 currently.

Farmers renting land would make $548 per hectare — more than double the $225 with export curbs, the consultancy said. About 60 percent of Argentine farmland is leased.

A Macri win could also spur planting of Argentine wheat, which goes into the ground in June and July.

“We expect Macri will from day one send corn and wheat export taxes to zero. That’s a huge incentive to plant both,” Fraguio said.

Cuts in wheat taxes and quotas could prompt more sales to Brazil, displacing imports of U.S. hard red winter wheat which have been filling the gap. Concerns over that were cited for part of a pullback in HRW wheat futures on Tuesday.

By Jonathan Blitzer
October 28, 2015

Even before the returns were in on Sunday night, the three candidates in Argentina’s national elections were already making their speeches, and each one, in his way, claimed victory. It wasn’t that the results were ever in dispute, though it did take a curiously long time for them to materialize; rather, the takeaway was, like so many things in Argentina throughout the last eight years, a question of how one chose to read into the results the controversial incumbent President, Cristina Fernández de Kirchner.

The candidate Kirchner endorsed, Daniel Scioli, the governor of the province of Buenos Aires, was the front-runner, with the most to lose. “The governors are with me, the Presidents of the regions are with me, the mayors are with me, and the legislators are with me,” he told the press beforehand. He entered Sunday with an air of inevitability surrounding his candidacy, but if he failed to gain forty-five per cent of the vote, or if his opponents drew within ten per cent of his total, he would have to face a runoff on November 22nd. Almost no one predicted it, but that is exactly what happened. Scioli won Sunday’s election by a very narrow margin—taking slightly more than thirty-six per cent of the vote—and as a result he limps into the second round of voting looking jilted and precarious.

Scioli didn’t do himself any favors on election night. When, about two hours before the results were announced, he began attacking his principal rival, the conservative mayor of Buenos Aires, Mauricio Macri, he seemed to be giving a premature concession speech. Without using the word balotaje, or runoff, he began his campaign for it by rattling off Kirchner’s signal accomplishments (welfare expansion, the nationalization of an oil company), and saying that none of that would have been possible under Macri. “Argentines don’t want to go back to the economic adjustments, devaluations, and indebtedness,” he said, dredging up the catchwords of past conservative administrations. A vote for Macri, he claimed, would return the country to the nineteen-nineties, when corruption and misguided economics led to one of the largest sovereign defaults in history.

For Macri, an unrepentant conservative in a country run by an iconic left-wing populist, the bar was low: he only had to make the contest close for the night to seem to go his way. “What happened today changes the politics of this country,” he declared, on securing just thirty-four per cent of the vote. (The gubernatorial candidates on his ticket also won in the provinces of Buenos Aires and Jujuy, in the country’s north.) He’s since received an unexpected boost from the third-place finisher, Sergio Massa, Kirchner’s disgruntled former Cabinet chief, who had twenty-one per cent of the electorate behind him. Massa and Scioli belong to the same broad-based ideological movement, known as Peronism, but Massa has suggested that he might throw his support to the Macri camp. On Monday, amid speculation about what that could mean for the runoff, Scioli announced that he’d debate Macri on November 15th. With Macri gaining momentum, Scioli will try to reposition himself—not just in terms of his rival but also, crucially, in relation to Kirchner herself.

From the start of the campaign, Scioli has had to walk a fine line where Kirchner is concerned. “Continuity with some change, that’s what people want,” Maria Victoria Murillo, a political scientist at Columbia University, told me. On the one hand, Scioli has portrayed himself as a successor to Kirchner, who, while divisive, enjoys a broad base of support in the middle-class electorate. On the other, he needs to create distance because the economy is bottoming out—G.D.P. is down, inflation has soared, exports have sunk, and unemployment is up—and the public has grown restive. As the journalist Carlos Pagni put it, “the prosperity that always accompanied Kirchnerism has ended.”

Scioli has claimed that he’s for “gradualism” and moderation, at once an exponent of continuity and change. A case in point is his posture on a group of creditors who have taken Argentina to court over the repayment of old bonds in default. The hedge funds which these investors represent are known as “vultures,” for buying up distressed debt and suing for the full value of the assets. Kirchner has been sparring with them for years, refusing to pay them the more than a hundred billion dollars they claim is due and turning the battle into a populist cause célèbre. While global commodity prices were high, Kirchner could afford to be shut out of capital markets—part of the collateral damage of her hard line on the issue—but the circumstances have changed; it’s likely her successor will have to strike some sort a deal. Scioli, for his part, has sounded as bellicose as Kirchner when asked about the vultures in public. But off the record his advisers have said the candidate understands he’ll have to negotiate. “Kirchnerism is over,” one Scioli adviser reportedly said. “Soon enough, they’ll realize.”

One of the ironies of Scioli’s situation is that he’s always had a fraught relationship with Kirchner. Some of the bad blood goes back to the administration of her late husband and predecessor, Nestor. Scioli was Nestor Kirchner’s running mate in 2003, a holdover from some of the deals Kirchner had to cut in order to round up support for his Presidential bid. Once in office, he seemed to resent Scioli, whom he kept close but never really trusted. Each time Scioli veered from the Kirchner line—say, on a tax measure or some minor matter of policy—he was publicly brought to heel. “What followed were years of petty snubs and various humiliations,” Gabriel Pasquini, the author, with Graciela Mochkofsky, of a book on Kirchner, told me. Scioli endured the situation until the Kirchners nominated him for the governorship of the province of Buenos Aires, in 2007. On the surface it was a prestigious post, since forty per cent of the country lives in the province, but historically it’s been double-edged for seekers of higher office. “There’s a dictum of sorts that the governor of Buenos Aires province will never become president,” Pasquini said. Rather than a proving ground, the province, because of its size and the scope and complexity of its problems, tends to mire its leaders in controversy and overexposure.

Then there’s the question of Cristina Kirchner’s endorsement, which was only ever half-hearted. Earlier this month, at a joint campaign stop, Cristina Kirchner said, “I ask all Argentines to get beyond all the antipathies we have and to think about what we’ve done over these years. There has to be continuity.” Some interpreted the word “antipathies” as a reference to Scioli, whom she seemed willing to accept but not embrace for the sake of her legacy. Others claimed she was speaking more generally about the “antipathies” wrought by her back-to-back administrations. Whatever the case, Kirchner loyalists have been less ambiguous about their misgivings with Scioli. Last week, the leader of one influential group of Kirchnerist intellectuals said he’d be voting for Scioli but only with a “long face.“ Needless to say, this poses problems for a candidate pitching himself as Kirchner’s anointed successor. “Will the President even let herself be summoned in the form of her candidate?” Carlos Pagni asked, practically rhetorically, in La Nación.

Scioli’s careering prospects going into next month’s runoff highlight Kirchner’s weaknesses, but not for the reasons that most people think. The conventional wisdom is that if Kirchner’s candidate falters, it signals the end of her own clout. That decline has long been in motion, the result of a dwindling economy and the mere passage of time: after twelve years in power, including two terms in office, she cannot run again for the Presidency until 2019. Some analysts maintain that her objectives going into these elections were Machiavellian from the start: that she intended to hand over the Presidency to a successor who would come into office with a limited mandate with which to face an increasingly intractable economy. This does not seem unlikely after Sunday, and it could conceivably strengthen Kirchner’s hand if she ever wanted to return to office. (And a Macri win, after all, might not be the worst thing for her.) Still, her bastions of support within the Peronist party will have to adjust to life without her, whether or not she plans to run again in four years.

The real mark of Kirchner’s weakness, though, may be that she never really had a proper successor in the first place. It’s hard, even now, to define what Kirchnerism is, exactly. After the past eight years, it looks to be a mélange of populism, elements of genuine progressivism, fierce partisanship, economic nationalism, and political savvy (even if it reads as bluster abroad). Central to a lot of it was the economic boom that funded the policies for which Kirchner is most beloved. And yet these years have been marked by unremittingly severe domestic crises. The battle lines were drawn within months of Kirchner taking office, when she levied a new tax on agricultural exports that prompted national strikes and road blockages; before long, she was embroiled in an ugly and protracted fight with the media conglomerate Clarín. From the start of her first term, there were repeated calls for her resignation, and they never really went away. “People see what they want to see with Kirchner,” Murillo said.

Through it all, there were two people who kept Kirchnerism afloat as a rhetorical armature, political posture, and topsy-turvy set of policies: the Kirchners themselves. Their original plan appeared to be trading off presidential terms to elongate their time in office. Then, in 2010, Nestor Kirchner died of a heart attack, and just like that the equation diminished. The year before, he and his wife had made a pitch for a new leftist coalition, to broaden their base of support, but it never materialized. In 2011 Kirchner handpicked a Vice-President, possibly with an eye toward grooming a successor, but he was almost immediately named in a corruption scandal and spent the rest of their term in the shadows. Settling on Scioli was something of a defeat for Kirchner, since he was the only candidate who could be both nominally loyal to her and could win an election. You’d think a caudillo never has to compromise, but you’d be wrong.

By Dimitra DeFotis
October 28, 2015

Argentina’s first runoff presidential election won’t come for another month, but Raymond James analysts are positive on equities despite a runup and outperformance relative to other Latin American assets.

Analysts Federico Rey Marino, Santiago Wesenack and Fernando Suarez wrote on Tuesday:

“Argentine stocks rallied by an average of 12% in U.S.-dollar terms on Monday 26, on the back of Sunday’s presidential election results. Stocks in banks and utilities were the best performers, after gaining 15% and 13%, respectively. FPV candidate Daniel Scioli, and Cambiemos candidate, Mauricio Macri, will now compete in a presidential run-off for the first time ever on November 22. We maintain our constructive medium-term view on Argentine equites, as we believe the next administration will start making progress to put the economy back on track again sooner rather than later. Counting on normalization, we continue to favor banks, utilities, and agro/export-related companies. However, now only trading at an average of 15% below the March highs, after accumulating a 19% increase in the past three trading sessions, we consider additional support for current valuations may rely on further certainties regarding the outcome of the election, and more insight regarding future macro and sectorial policies.”

Indeed, the Global X MSCI Argentina exchange-traded fund (ARGT), which is up 2.4% today, is up 20% just in October. Still, investors should consider that the fund is up only 2.3% this year, while the iShares Latin America 40 ETF (ILF), weighed down by assets in Brazil, is down 24%.

Argentine banks with U.S.-traded shares include Banco Macro (BMA), which is up 7.5% today and up 52% this month, and Grupo Financiero Galicia (GGAL), which is up 4.5% today and up 40% this month. Argentine electricity distributor Empresa Distribuidora y Comercializadora Norte, otherwise known as Edenor (EDN), is up 2% today and up 36% this month.

In energy, oil-and-gas exploration company YPF (YPF) is up 5% today and up 27% this month, while Petrobras Argentina (PZE) is up 4% today, but up only 1.4% this month.

By Paula Diosquez-Rice, Laurence Allan, Carlos Caicedo
28 October 2015

This will be the first time in 27 years that an Argentine election goes into a second round, which will take place on 22 November.

IHS perspective


The first round of Argentina’s presidential and general elections put government candidate Daniel Scioli, Front for Victoy (Frente para la Victoria: FpV) – 36.8% and opposition candidate Mauricio Macri, Republican Proposal/Let’s Change (Pro/Cambiemos) – 34.33% – nearly neck and neck.


Pro-business Macri has the momentum, further indicated by the gains his party made in gubernatorial elections in Buenos Aires province and in national congress, but third-place candidate Sergio Massa (21% of the vote) has emerged as kingmaker.


An improved business environment is anticipated regardless of whether Scioli or Macri wins the presidency; however, the complicated balances between the president, Congress and the provinces will slow down implementation of policies.

Presidential candidate Sergio Massa talks to the press after voting in Buenos Aires, Argentina, Sunday, 25 October, 2015PA.24540672
The slim margin of Daniel Scioli’s first-round lead had not been anticipated by pollsters and the main expectation within the government camp was for Scioli to win outright in the first round. Reflecting this, Scioli went as far as naming his cabinet. IHS has consistently assessed that the election would be close and a second round between Scioli and Mauricio Macri would be necessary. Macri’s Republican Proposal (Propuesta Republicana: PRO) and centrist opposition Let’s Change (Cambiemos) electoral coalition also performed strongly in the congressional election and won gubernatorial elections in the key province of Buenos Aires.

Those two factors strongly suggest that Macri has the better momentum going into the second round. However, the potential second-round choices of voters who supported third-place Sergio Massa, with 21.34%, will be critical to the outcome.

Massa crucial for the second round

Sergio Massa is already the subject of an intense campaign of offer and counter-offer between Scioli and Macri, as they seek to get his second round support. Although Massa remains nominally a Peronist and thus from the same political background as Scioli, efforts at finding common ground for an alliance have failed so far. Likewise, aggressive Kirchnerist tactics against Massa, since he performed strongly at mid-term election in 2013, has resulted in Massa hardening his anti-government stance. The vice presidency would be an obvious offer to make to Massa, but that would mean displacing President Cristina Fernández de Kirchner’s favourite, Carlos Zannini, in that role. Sources close to Scioli have admitted that bringing Massa to their side would not be easy. Significantly, Massa has said that if Scioli remains Fernández’ “puppet” he will lose the election.

Personal atmospherics between Macri and Massa appear better. Although a proposed electoral coalition between them was rejected early in the campaign, neither side has attacked the other with the same bitterness that has been evident between Scioli’s campaign team and the other two candidates. Massa has given some hints on where his sympathies lie by noting that he was against “continuity”. However, Macri’s ability to offer attractive political posts to Massa is constrained by the political debts owed to his coalition partners, notably the Radical Civic Union (Unión Cívica Radical: UCR), without whose strong national networks he could not have reached the second round.

A deteriorating macroeconomic situation to prove major challenge for new president

Argentina’s next president will face a challenging macroeconomic environment. The fiscal deficit is expected to reach 6% of GDP in 2015. National accounts data show fiscal spending growing at double digits in real terms, while tax revenue has lagged well behind.

Meanwhile the dispute with the “holdouts” over defaulted debt shows no sign of abating. The latest ruling, by US-based judge Thomas P. Griesa, allowed for another 15 plaintiffs (the so-called “Me too’s”) to sue Argentina, increasing the amount of debt in dispute to USD10 billion. To this adds dwindling foreign-exchange reserves, declining export revenues, and forecast low commodity prices for 2016. This significantly constrains Argentina’s ability to use the central bank reserves to bail out the government as has been the case so far.

Further challenges for the central bank are how to source the US dollars needed to stabilise the peso and meet the private-business demand for hard currency. Sources in the tradeable sector have reported that the central bank is still to authorise USD9-billion requested by importers. Equally challenging for the next government would be how to manage devaluation expectations. The peso remains overvalued; unlike other emerging-market currencies it has devalued by just 11.3% against the dollar this year. This contrasts with the 62% depreciation experienced by the currency of Brazil, Argentina’s main trading partner. Both Macri and Scioli have vowed to address these imbalances, but this is likely to take months rather than weeks. A carefully managed transition process will be required in order to avoid capital flight and runaway inflation.

Outlook and implications

Markets welcome the surge of pro-business Mauricio Macri; bond prices rose on the back of the first round result. That is understandable given Macri’s public statements; he has vowed to lift currency and import controls and let an overvalued peso to find its market value straight away. However, IHS assess that the removal of such controls cannot be done overnight, given low levels of foreign reserves and high levels of inflation. Yet, we assess that the election results so far represent a marked weakening of Kirchnerism, opening the door for an improved business environment in , regardless of who wins. Even under Scioli, who has a good rapport with the private sector, progress towards a more predictable, business friendly environment is anticipated. The downside under a Scioli administration, is his close association with outgoing President Cristina Fernández, who will try to force him to maintain the state interventionist polices that have alienated investors and isolated Argentina. Scioli, as moderate politician is unlikely to heed that; however, he will be forced into complex negotiations with Kirchnerism, which will try at every step to have a say in policymaking.

The makeup of Congress will pose significant headwinds for effective governance. On 25 October, voters also elected a large chunk of National Congress and the governors in 11 of Argentina’s 25 provinces. On the first, the headline was the significant setback suffered by the Front for Victory (Frente para la Victoria: FpV) in congress, which saw its number of seats dwindle to 117, although it still remains the largest single bloc, with different opposition factions having the remainder of the 257 seats in congress. The FpV retains a majority in the Senate. A Scioli government would thus not have an easy ride in the chamber of deputies. A Macri presidency would face an FpV, diminished but still the largest single bloc in the chamber, with the Senate a clear obstacle for him. He will need to build congressional alliances to push through legislation. Although the tendency of minority parties to gravitate towards the government side remains strong, maintaining such alliances will be difficult and unpredictable. Legislative progress for either man as president is therefore going to be extremely difficult, at least until the October 2017 mid-terms. A new president will thus face high barriers to pass parameter-shifting legislation into law and any especially contentious policies – more likely from Macri than Scioli – will become diluted, unless the new president uses his wide discretionary powers. Use of those though could easily spark fierce resistance from other sectors in Congress.

By Matias Spektor
October 28, 2015

The severe tone of the U.S. National Intelligence Estimate of September 8, 1982, was worthy of the darkest moments of the Cold War. It warned that if Country A built a nuclear device, “security relationships” in the entire region “would be upset.” Furthermore, it warned Country B “could be prompted to move as quickly as possible to attain a nuclear weapons capability to buttress its own security and sense of national prestige.”

It scarcely seems possible in today’s context, but Country A was Argentina and Country B was Brazil. Indeed, in the late 1970s and early 1980s, South America’s two biggest countries were on the verge of a nuclear race. With a long-standing diplomatic rivalry, they were now bent on developing sensitive nuclear technology, including enriching and reprocessing uranium, and building ballistic missiles.

Making matters worse, military regimes governed both countries at the time, and this work took place with little if any civilian scrutiny. National security doctrines in both countries identifi ed each other as a major potential security threat, with the armed forces having contingency plans in place in the event of war.

Yet, starting in the 1980s, the two countries set out on an ambitious path of nuclear cooperation. In the process, they imposed new restraints on their nuclear programs and rewrote national security doctrines to eliminate the possibility of war. To everyone’s surprise, they also built a mechanism of mutual nuclear inspections that was unprecedented anywhere.

This set the stage for the bilateral relationship of today, which — apart from occasional skirmishes over trade, or on the soccer field — is entirely peaceful. Indeed, South America as a whole is free of interstate conflict, due in part to the two countries’ success in defusing tensions during that era.

How did it all happen?
A Common Threat

Argentina and Brazil began cooperating on nuclear matters in large part because of the policies of President Jimmy Carter’s 1977–1981 government. The White House was trying to prevent the further proliferation of nuclear technology by curtailing third-party exports of sensitive technologies, while also pushing against the human rights violations perpetrated by the military regimes.

Both Buenos Aires and Brasilia saw Carter as a threat to their national “rights” to nuclear technology development. And, crucially, they thought U.S. policies denying them technology were even more threatening than the risks emanating from the other’s nuclear program.

We now know this perception made some sense. After all, at a three-day conference in 2012 to explore this chapter in history, documents reviewed by a group of experts revealed that neither Brazil nor Argentina were anywhere close to developing full-fledged nuclear weapons programs. Foreign intelligence agencies overestimated their achievements. Documents also show that neither country built its nuclear program primarily as a response to a perceived nuclear threat from the other.
Interpersonal Trust

Previously secret documents also indicate that, due in part to the perceived threat from Washington, Argentine and Brazilian officials were able to establish a high degree of empathy and trust at the highest levels. Two episodes in particular stand out because they could have led to a serious deterioration in the relationship, but ended up leading to greater nuclear cooperation instead.

The first was in November 1983, when the Argentine government announced its mastery of the technology to enrich uranium in a pilot-scale lab at the then-secret facility of Pilcaniyeu. The announcement caught Brazilian authorities by surprise, and they doubled down on their effort to develop uranium-enrichment capacity at the Aramar facility — which they achieved in 1987.

Yet, before they went public, Argentine authorities made a point of giving their Brazilian counterparts early warning. The governing junta sent a private letter to Brazil’s military president, João Figueiredo. The gesture was welcomed in Brasilia. Brazilian authorities knew Argentina lacked the industrial capability to enrich uranium, and thereby to develop a nuclear explosive.

A month after the Pilcaniyeu announcement, civilian rule returned to Argentina and Raul Alfonsín became president. Alfonsín understood the risk of Brazil and Argentina becoming ensnared in a nuclear arms race, and recognized that diverting resources to wasteful military competition could wreck his plans for securing Argentina’s democratic transition.

In early 1984, Brazil presented through informal channels a proposal for a joint declaration renouncing nuclear tests. Argentina agreed, and soon afterwards it put forward a proposal to develop a system of bilateral safeguards and mutual inspections.

Still, there was no guarantee yet that tensions would be fully defused. So when civilian rule also returned to Brazil in 1985 and José Sarney became president, the two leaders began working quickly to build trust. When they met for the first time, Alfonsín said he wanted to visit the Itaipú Dam, which for over a decade had been at the heart of a bilateral dispute over the use of international waters in the River Plate Basin. During that same trip, Alfonsín made an additional gesture of trust by inviting Sarney to visit the Argentine nuclear facility at Pilcaniyeu. The new spirit of reciprocity required that Sarney extend the same courtesy to Alfonsín, who visited Aramar in 1986. These symbolic visits filtered down to deeper and more frequent cooperation between scientists and technicians, including visits to each other’s installations.

The second big test of the cooperative relationship came in August 1986, when the Brazilian newspaper Folha de São Paulo revealed two major shafts in the Serra do Cachimbo site in northern Brazil. According to the newspaper, the boreholes had been drilled by the air force as testing sites for nuclear explosions.

Argentine officials were taken aback by the leak, and let Brazil know. In Brasilia, the government moved quickly to inform their Argentine counterparts that the boreholes were repositories for nuclear waste similar to ones Argentina had built in Patagonia.

In a recent newspaper interview, Sarney took pride in how the relationship he achieved with Alfonsín helped avert a bigger crisis. “We established a trusting relationship between us,” the former president said. “What we see happening now with immense difficulty with Iran, we did here in South America without international mediation.”
A Concerned U.S. Congressman

It is indeed true that nuclear rapprochement in the Southern Cone did not necessitate foreign mediation. But it would be unfair not to recognize the role of a congressman from the United States.

The first proposal for an Argentine-Brazilian system of mutual nuclear inspections was developed by a U.S. congressman from Illinois, Paul Findley. In 1977, Findley traveled to Buenos Aires and Brasilia to argue that a system of bilateral inspections could help mitigate suspicions in the United States and elsewhere about the countries’ nuclear intentions. A month later, the Findley proposal appeared in The Washington Post.

The Brazilians dismissed Findley’s plan at once. Yet in subsequent years, officials in Buenos Aires came back to it time and again. Alfonsín repeatedly insisted with his Brazilian counterparts that such a mechanism would pave the way for greater stability in South America. Sarney eventually agreed to explore mutual inspections. When he did, Findley did not seek credit.

By the early 1990s, the two countries set up a binational agency to carry out inspections and controls. In 1994, Argentina and Brazil joined the Tlatelolco Treaty that established Latin America and the Caribbean as a Nuclear Weapons Free Zone. Shortly thereafter, they both joined the Nonproliferation Treaty, definitively establishing themselves as non-nuclear actors — and, above all, peaceful neighbors.

Spektor is an associate professor of international relations at Fundação Getulio Vargas in Brazil and a columnist at Folha de São Paulo, a leading newspaper. He is author of 18 Dias: quando Lula e FHC conquistaram o apoio de Bush (2014), Kissinger e o Brasil (2009) and, more recently, he coedited The Origins of Nuclear Cooperation: a Critical Oral History between Argentina and Brazil (2015) with Nicholas Wheeler and Rodrigo Mallea.

By Kamilia Lahrichi
28 October 2015

(CNN) — Think medicine tastes awful?

Maybe Fernet isn’t the drink for you.

To some palates, the incredibly bitter Italian liqour is worse than cough syrup.

Bizarrely though, in Argentina it’s so popular that the country now consumes more than 75% of all Fernet produced globally.

And since the drink is traditionally mixed with Coca-Cola in an ice-filled glass, it also contributes to making Argentina one of the planet’s highest Coke consumers.

People here knock back about four times the global Coca-Cola average.

Fernet and Coke is so popular in Argentina that the country now hosts the only Fernet production facility outside Milan — the Fratelli Branca distillery on the outskirts of Buenos Aires.

There, even marketing manager Heman Mutti acknowledges that the drink possesses a medicinal air.

“Fernet was initially sold in Italian pharmacies” as a digestive aid, he says.

The drink reached Argentinian shores in the late 19th century along with European migrants and soon became one of the country’s cultural mainstays, along with tango, barbecue, mate and dulce de leche.

Testament to its importance to the Argentinian way of life, in 2014 Fernet was added to a price-freeze program to protect it from skyrocketing inflation.

Rhubarb and roots

Fernet owes its unconventional taste to a top secret recipe that involves about 40 different herbs including saffron, rhubarb, cardamom, myrrh, chamomile, aloe and gentian root.

Juan Chico, manager of BARTOK bar and restaurant in the upscale Palermo neighborhood in Buenos Aires, says Fernet is the most widely consumed liquor in the restaurant.

Although the bar displays an array of spirit and wine bottles, Chico sells on average 70 glasses of Fernet a day.

He claims that the central Argentine city of Cordoba alone consumes more Fernet than all of Italy, largely due to its strong Italian heritage.

That’s often a surprise to Italian visitors, some of whom struggle to comprehend its popularity.

“It had been two years since I’d seen anyone drink Fernet in Italy,” says Italian nightclub promoter Giovanni Digliardi, who did a double take the first time he stepped into an Argentine bar and was immediately offered a “Fernecola” — Fernet mixed with Coke.

Digliardi, who moved to Buenos Aires in 2008, recalls his grandfather drinking Fernet as a digestif with a glass of hot water.

He’s still baffled by the fact that Argentinians pair the beverage with food at dinners and social events.

“To be honest, Fernet isn’t a proper drink like caipirinha or pisco sour,” he says.

‘A bitter kiss that makes your eyes close in disgust’

Despite it’s popularity, for many Argentinians, Fernet is an acquired taste.

When psychologist Florencia Martinez, a native of Gualeguaychu in Argentina’s Entre Rios province, first sipped it, the verdict was straightforward: she poured it away in horror.

“Totally disgusting,” she confesses, letting out a “bleargh” and lowering her eyebrows, still outraged by the memory.

After that she wouldn’t “get her nose close to a bottle of Fernet for many years,” preferring gin and tonic.

Time passed and disgust faded.

She started swallowing the liquor toward the end of nights with friends because she liked “the refreshing and sweet taste of Coke.”

“And this was the road of no return,” she says, laughing. “It became my liquor of choice.”

It’s a familiar story among Fernet aficionados.

Typically, the initial tasting is a hostile experience, but the drink eventually wins over its audience.

“We met here for the first time, the womanizer Fernet I had heard so much about,” romanticizes Yasmin Simeonova, an architect from Macedonia working in Buenos Aires.

“Trying it out was like a kiss, a bitter kiss that burns your tongue and makes your eyes close in disgust.”

Herb freshness

Simeonova says at first she questioned the sanity of those who championed the drink.

That changed.

“After three years in Buenos Aires, I now have a very strong and passionate relationship with Fernet,” she says.

“I love it and it loves me. We’re having fun times until early mornings, in plastic glasses, half-cut bottles of Coke, wandering in streets, below bridges and across borders.”

Drinking Fernet from a plastic Coke bottle is known as “viajero” (meaning “traveler” in Spanish).

At night, especially during weekends, youngsters and older people alike roam the streets with their containers of mixed drinks.

Fernet also seems to win over experienced sweet-toothed drinkers.

“I’m a product of the U.S. university system, meaning I spent the better part of four years of my life drinking nauseatingly sweet grain alcohol mixed with Kool-Aid,” says Emily Sarah, managing partner of a financial advice company in Buenos Aires.

“Needless to say, Fernet’s herby freshness was a pleasant surprise and lacked the negative associations with the unpleasant consequences of sweet drinks,” she says.

According to its makers, Fernet’s recipe has remained unchanged for 170 years.

Whatever Argentina’s drinkers are suffering from, clearly this “disgusting” Italian medicine is the cure.

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29 octubre, 2015

BsAs — NYTimes Report on 36 Hours on the Town.. Video.. ENJOY














15. A ‘GOLAZO’ IN ARGENTINA (American Thinker Blog)


By Mark P. Jones
October 27, 2015

On Dec. 11, for the first time in 4,582 days, Argentines will awaken with a president who is not a Kirchner. Neither Néstor Kirchner (2003-07) nor Cristina Fernández de Kirchner (2007-2015) will be running the show in the Pink House (Argentina’s White House).

Elections were held Sunday for president, half of the Chamber of Deputies, one-third of the Senate, and thousands of provincial and municipal level posts, including 11 governors.

In the marquee presidential contest, six candidates who had been successful in the Aug. 9 primaries competed. The candidate of President Fernández’s Front for Victory (FPV) alliance was Province of Buenos Aires governor Daniel Scioli, while the candidate of the centrist We Can Change (WCC) alliance was City of Buenos Aires mayor Mauricio Macri. The third principal contender was national deputy Sergio Massa of the United for a New Alternative (UNA) alliance.

Both Scioli and Massa belong to Argentina’s large Peronist movement, with Scioli aligned with the movement’s pro-Kirchner wing and Massa the leading figure in its anti-Kirchner wing. Three minor candidates also were on the ballot: Margarita Stolbizer (Progressives, center-left), Nicolás del Caño (Left Front, far-left), and Adolfo Rodríguez Saá (Federal Commitment, anti-Kirchner Peronist).

1. A Nov. 22 runoff will select the next president

In Argentina, a presidential candidate can obtain a first-round victory either by winning more than 45 percent of the valid vote or by winning between 40 and 45 percent and simultaneously besting the first runner-up by at least 10 percent.

Neither of those happened. Scioli, the pro-Kirchner candidate, was the plurality winner with 36.9 percent — but failed to reach that 40 percent threshold. Close behind was the opposition’s Macri, who garnered 34.3 percent. Massa finished third with 21.3 percent. The three remaining candidates were all in the low single digits.

2. The Peronist movement is alive and well — and won three-fifths of the presidential vote.

The election showed that Argentina’s large and diverse Peronist movement remains popular and vital. Three of the six presidential candidates were Peronists: Scioli, Massa and Rodríguez Saá. Together, they received 60 percent of the valid vote, on par with the 62 percent average won by Peronist presidential candidates in the three most recent (2003, 2007, 2011) elections.

3. Kirchner’s FPV won a majority in the Senate and a near-majority in the Chamber.

All 24 provinces voted for half of their seats in the Chamber of Deputies. One-third of the provinces voted for all three of their senators.

In the preliminary tally, the FPV and its allies won 61 of the 130 Chamber seats and 14 of the 24 Senate seats that were in play. Combine those with the seats occupied by the FPV or FPV allies among the 127 deputies and 48 senators who were not up for election this round, and the FPV and its allies will control three-fifths of the Senate seats and a little less than half of the Chamber.

The opposition party We Can Change and its allies won 47 seats in the Chamber and nine in the Senate. When added to the deputies and senators whose seats were not up for renewal this cycle, We Can Change and its allies will on December 10 control slightly more than one-third of the Chamber’s seats and about one-quarter of the Senate.

UNA and its allies gained 16 deputies and one senator. Come Dec. 10, the alliance’s members will occupy one out of 10 spots in the Chamber. If Macri wins on Nov. 22, the UNA delegation could be pivotal in determining whether the speaker of the Argentine Chamber will be a member of Macri’s We Can Change or of the FPV.

4. The province of Buenos Aires will have a governor who isn’t a Peronist.

Two out of every five Argentines live in the province of Buenos Aires. For the first time since the return to democracy in 1983, the Province of Buenos Aires elected a non-Peronist governor, We Can Change’s María Eugenia Vidal.

Voters really disapproved of Vidal’s FPV rival, Cabinet Chief Aníbal Fernández, viewed by many as authoritarian, corrupt and with alleged ties to drug traffickers. Anibal Fernández’s presence on the FPV ballot probably cut Scioli’s national share of the vote by a couple of points. Vidal won 39.5 percent to Anibal Fernández’s 35.2 percent, with UNA’s Felipe Solá in third, with 19.2 percent.

5. The second-place Macri might make an alliance with Massa to improve his chances of winning the presidency.

While UNA’s Macri has some very good reasons to celebrate his success in forcing the FPV’s Scioli into a runoff, he is still confronted by two facts.

First, Scioli is closer than Macri to the popular majority needed to triumph on Nov. 22.

Second, between now and Nov. 22, the Scioli campaign and its supporters will inundate Argentines with dire warnings about a Macri presidency. They will ask Argentines to recall the devastating economic, political and social crisis of 2001 that saw President Fernando de la Rúa (1999-2001) of the UCR (Radical Civic Union) resign.

The Scioli camp will then further remind voters that De la Rúa assumed office amid growing economic and fiscal problems, was the leader of a diverse and untested opposition alliance, lacked a congressional majority, faced a league of primarily Peronist governors, and was not a Peronist himself — all five of which would apply to a ‘President Macri’ as well.

And they will attempt to paint Macri as a neo-liberal who wants to return Argentina to the now relatively unpopular Washington Consensus-driven policies of the 1990s, particularly those policies associated with the privatization of state-owned companies, fiscal austerity and trade liberalization.

If We Can Change’s Macri were to ally with UNA’s Massa, it would help him in two related ways: in closing the vote gap between now and Nov. 22, and in partially ameliorating swing voters’ fears about all those potential problems. In Argentine lexicon, Massa would be the ‘Peronist leg’ offering needed strength and stability to a Macri presidency.

Without an explicit alliance and Massa’s endorsement, a majority of Massa supporters will probably back Scioli in the runoff. Some would do so for reasons of affinity or self-interested strategic behavior. Others would because they are risk averse and fear a potential repeat of 2001.

6. The world’s second-longest-serving federal executive was re-elected.

In the northern province of Formosa, Gildo Insfrán was re-elected to his sixth consecutive four-year term with 73.3 percent of the vote (with 98.3 percent of precincts reporting). Among all sub-national executives in the world’s federal democracies, Insfrán is the second longest consecutively serving state/provincial governor/premier, bested only by Lower Austria governor Erwin Pröll.

7. The Kirchners aren’t gone yet.

The Patagonian province of Santa Cruz is the Kirchner clan’s home. Before becoming president, Néstor Kirchner was Santa Cruz’s governor from 1991 to 2003 and Cristina Fernández represented Santa Cruz in both houses of congress.

Santa Cruz governor Daniel Peralta (2007-15) rebelled against President Fernández during this past term. To retake control of their turf, Cristina Fernández had her sister-in-law, Minister of Social Development Alicia Kirchner, run for governor.

The only problem was that Peralta insisted on running for re-election. If both Kirchner and Peralta ran, they would split the Peronist vote and potentially open the door (under the province’s existing simple plurality electoral formula) to a victory by the province’s most popular opposition figure, the UCR’s Eduardo Costa.

President Fernández’s solution was, with the assistance of her loyal supporters in the Santa Cruz legislature and Peralta’s acquiescence, to bring back the double-simultaneous vote (DSV), which was in vogue during the 1990s but had been eliminated for gubernatorial elections. Under the DSV, the votes of candidates running under the same banner are pooled together to determine the election’s winner.

In Santa Cruz, bitter rivals Alicia Kirchner and Daniel Peralta were the gubernatorial candidates of the Santa Cruzan Front for Victory (FPV-SC). Eduardo Costa and Osvaldo Pérez both ran for the anti-Kirchner Union to Live Better (UVM). While Costa (41.0 percent) won a higher percentage of the vote than either Kirchner (34.8 percent) or Peralta (16.8 percent), the combined FPV-SC vote (51.6 percent) was greater than that of the UVM (45.8 percent). Three left wing parties with solo candidates won 2.6 percent (all with 96.7 percent of precincts reporting).

Since Kirchner was the plurality winner within the FPV-SC, which in turn was the plurality winner among the alliances/parties, she becomes governor on Dec. 10.

Mark P. Jones is the Joseph D. Jamail Chair in Latin American Studies and the James A. Baker III Institute for Public Policy’s Political Science Fellow at Rice University.

October 27, 2015

BUENOS AIRES, Argentina — The third-place finisher in Argentina’s presidential election hinted Tuesday that he will support opposition candidate Mauricio Macri in the runoff vote.

Sergio Massa got 21 percent of the votes in Sunday’s election, turning him into a key player in the Nov. 22 runoff. Macri got 34 percent, while governing party candidate Daniel Scioli garnered 37 percent of the vote.

Both Macri and Scioli are courting Argentines who voted for Massa. On Tuesday, Massa said that “people voted against continuity.” That suggested he was closer to the changes being promised by Macri.

Massa said he would release his position Wednesday through a policy proposal manifesto, though it was uncertain if he planned to go a step further and make an endorsement.

It was also not clear how many supporters Massa might sway now that he is out of the race.

Many of his backers are, like Massa and Scioli, adherents of Peronism, a divided movement aligned with the working class founded by the late three-time president Juan Peron.

Macri shook up Sunday’s vote with surprisingly strong numbers. Polls had projected that Scioli would win the election by around 10 points.

Scioli, the governor of the Buenos Aires province, had been viewed as an easy front-runner thanks to the support of President Cristina Fernandez.

Since the tight vote Sunday, Scioli has intensified his warnings to Argentines that Macri would undo popular state programs.

Still, many in the country of 41 million have grown frustrated with high inflation, strict currency controls and allegations of corruption within Fernandez’s inner circle.

Macri, the Buenos Aires mayor, has branded himself as the overhaul candidate who will put Argentina’s economy back on track by lifting currency controls and attracting foreign investment. He also says he will reach a deal with creditors in the U.S. whose long-running court fight with the government has made it difficult for Argentina to borrow on international credit markets.

By Mac Margolis
October 27, 2015

The results of Argentina’s presidential election were still rolling in Sunday night when opposition candidate Mauricio Macri raised his hands through a cloud of confetti. “What happened today shows that the politics of this country have already changed,” said the Buenos Aires mayor, whose strong second-place finish surprised pollsters and pundits, and was a sharp rebuke to President Cristina Fernandez de Kirchner. “Kirchnerismo,” he said, referring to the outgoing leader’s erratic brand of rule, “is history.”

Not quite yet. Macri must still win a Nov. 22 runoff against Fernandez’s chosen successor, governor of Buenos Aires province Daniel Scioli. Still, the fact that Macri earned enough of the vote to force a runoff — and that Fernandez’s Victory Front alliance lost both its congressional majority and the key race for Buenos Aires governor — suggests that after 12 years under one of the hemisphere’s most caustic political dynasties, Argentines are anxious for something new.

Whether they’ll get it is another question. What’s important is not the name of Argentina’s next president, but whether Fernandez’s exit will mean the end of Kirchnerismo — a vertiginous blend of ultra-nationalism, economic dirigisme and populist promises flung from the balcony, with which not even Scioli wishes to be fully associated.

On the Kirchner family’s watch, Argentina went from a recovering emerging market to an international pariah. After taking office in 2003, Nestor Kirchner set the tone, blasting big business and stiffing creditors. When Fernandez took over in 2007, instead of conciliating, she doubled down on her husband’s quarrels, adding big agriculture to the foes.

Shaken, but unbowed, by Nestor’s death in 2010, Fernandez clashed with farmers again, nationalized foreign companies, bullied critical journalists and invoked a contentious law to push for the break-up of media group Grupo Clarin. When the country’s fortunes plunged, she turned on enemies, at home and abroad. Honors to “debt vultures,” holdout creditors who refused to swallow severe write-downs on their loans, have tied Argentina up in international courts for the last decade.

Aggressive social spending may have helped offset Kirchnerismo’s abrasiveness. With a lift from the global commodities bonanza, Argentina’s economy grew an average of almost 8 percent a year between 2003 and 2012. Fernandez poured that windfall into lavish consumer subsidies and wage increases, in a spending drive that continued even as the economy began to tank in 2014.

Whichever candidate takes office on Dec. 10 will have to deal with an economy tumbling into recession, 25 percent inflation, a spiking public deficit and hard currency reserves down to a nine-year low. Almost 29 percent of Argentines lived in poverty last year, up from 25 percent in 2011, according to a study by the Catholic University of Argentina.

It’s therefore no surprise that all the top contenders in Sunday’s election took care to distance themselves to varying degrees from Kirchnerismo’s profligacy. That includes Scioli, who signaled that he would rein in spending and sit down with the litigious bond holders.

The country could use some parsimony. Unsustainable spending and bottomless subsidies became the norm under the Kirchners: An estimated 12 million consumers pay just 35 pesos a month for electricity — the price of a double espresso with milk — said Scioli’s top economic adviser, Miguel Bein.

People also didn’t truly know how badly the economy was faring, given that fudging statistics was a regular practice. Macri spent much of his campaign focusing on how to rescue the national statistics bureau, Indec, where inaccurate inflation and growth data earned the Fernandez government a rebuke by the International Monetary Fund.

Still, getting Argentines to accept that the days of generous social spending may need to be numbered won’t be easy. A recent poll found that although half of Argentines disapproved of Fernandez’s government, 35 percent favored “change with continuity” and another 27 percent wanted more of the same.

Such is the challenge facing Argentina’s next leader, caught between economic emergency and populist temptation. Macri may be the best bet the country has had in years to change the Kirchnerist script. But first he must convince voters that he will end the costly stalemate with creditors, and that promising Argentines benefits the country can’t afford is no way to return to solvency and growth — it’s just talk from a balcony.

By Charlie Devereux
October 27, 2015

* Sergio Massa, a conservative Peronist, may play king maker
* Can he deliver? Analysts are studying his voters for clues

After Argentina’s presidential election stunned the nation by turning an expected shoo-in into a neck-and-neck contest, the two front-runners are preparing for a bruising four-week campaign. But the candidate attracting most of the attention right now is the one who was eliminated: Sergio Massa.

Massa drew 21 percent of the vote, or 5 million people, and they now have the chance to pick the next president. The question is whom Massa will favor and whether he will — or can — bring his voters with him.

“He can be the arbiter and that gives him a lot of scope for negotiation,” said Lorena Moscovich, a professor in political science at the University of San Andres in Buenos Aires.

Massa is a charismatic 43-year-old lawmaker and former mayor who has made tough-on-crime policies a signature issue. On Wednesday he plans to unveil a policy paper aimed at influencing the Nov. 22 run-off. And while most analysts suspect he will remain studiously uncommitted at least for a while, he’s given some signs of his inclination.

Fernandez’s ‘Employee’
“People don’t want continuity,” he said Tuesday, an unmistakable jab at Daniel Scioli, the top vote-getter who is allied with outgoing President Cristina Fernandez de Kirchner. He has also accused Scioli of being Fernandez’s “employee.” Opposition candidate Mauricio Macri has wasted no time and said he’s in talks with Massa.

What he can offer Massa is unclear, perhaps a leading role in Congress. Moscovich argues that Massa may or may not make a deal with Macri but is unlikely to make an alliance with Scioli. A Macri victory would probably suit Massa since it would position him as the de facto leader of Peronism, the shifting political ideology named after former President Juan Domingo Peron, that has ruled Argentina for decades.

Conversely, aligning himself too closely with Macri would make it difficult for him to later break away and lead the opposition, she said.

Scioli has made his own attempts to woo Massa, saying that, as Peronists, they share priorities and the “typical Massa voter is much further from Macri than from us.”

Macri is the more market-friendly, conservative candidate who promises a set of economic shifts that worry the lower classes who rely on government subsidies.

It is far from clear how much influence Massa has over his own followers.

“He’s very influential, but you have to bear in mind that votes in Argentina don’t belong to the candidates, they belong to the voters,” said Sergio Berensztein, president of a political consulting firm that bears his name.

This is particularly true of Massa, Berensztein said. A relatively new force in Argentine politics, he was the youngest ever cabinet chief under Fernandez, before breaking with her and forming his own dissident Peronist movement.

Sense of Allegiance
Given that his political alliance is only a few years old, his voters are less likely to have a strong sense of allegiance to him and will be less influenced by whom he chooses to back, Berensztein said.

Scioli and Macri may therefore profit more from studying the profile of Massa’s voters. They can be divided into two categories, according to Ernesto Calvo, a professor in government and politics at the University of Maryland.

The first are conservative Peronists opposed to Fernandez’s blend of left-leaning Peronism but aren’t necessarily repulsed by Scioli himself. The second category is comprised of middle-class voters likely either to abstain or vote for Macri.

Calculating the likely votes of Massa followers is therefore complex; they may end up splitting evenly, especially if Scioli turns toward the center over the next weeks of campaigning, according to Calvo. Scioli will likely tread a fine line between retaining the core of voters who support Fernandez and fishing for the Peronists who went with Massa.

Search for Insight
The thirst to understand Massa voters is sufficiently intense that an experiment conducted two weeks ago on Massa supporters is gaining the attention of columnists and political analysts grasping at any straw of insight. In that study, carried out by a Dutch company, 24 Massa backers were shown images of the three candidates followed by video clips while their brain activity was measured.

Marc Rothuizen of Neurensics, said that the Massa voters showed strong emotional attachment to Macri’s message of change.

Scioli is making overtures to Massa voters by warning that a Macri presidency would plunge Argentina into a chaos of currency devaluation and debt crisis such as the one that engulfed the country in 2001.
But he’ll also have to appeal to pro-change conservatives without alienating Fernandez’s followers, said Berensztein. What seems clear is that if he only promises continuity, he’ll lose, he said.

By Daniel Cancel
October 27, 2015

* Rule change follows new regulations on pension-fund assets
* New regulation could prompt sale of some dollar assets

Argentina’s insurance regulator changed the rules governing the amount of foreign currency holdings the companies can keep, which could prompt the firms to sell assets to meet a year-end deadline.

Insurance companies must adjust their foreign-currency security holdings to match the amount of foreign-currency contracts they have with clients, according to a resolution published Tuesday in the official gazette. The regulator said that both dollar assets and dollar-denominated assets payable in pesos are considered as foreign currency.

President Cristina Fernandez de Kirchner’s government, which leaves office on Dec. 10 after a Nov. 22 run-off election between the ruling party’s Daniel Scioli and the opposition’s Mauricio Macri, has in the past ordered insurance companies to repatriate foreign holdings and forced them to fill a certain portion of investment portfolios with bonds of companies deemed to be productive or dedicated to infrastructure projects. Multi-national firms in Argentina include ACE Ltd., Allianz SE and Zurich Insurance Group AG, according to the regulator’s website.

With the second-round election approaching, the government, which closely controls the official rate of the peso, is keen to keep parallel exchange rates from weakening further. The measure could also increase the number of dollar-denominated assets circulating in the local market and allow government entities to acquire them as central bank reserves sink toward a nine-year low.

Firms must reach 50 percent compliance with the rules by Nov. 3, 75 percent compliance by Nov. 30 and be in full compliance by Dec. 31.

Last month, the securities regulator ordered mutual funds to change the way they value foreign-currency holdings, sparking a rout in dollar-denominated bonds traded in the local market as firms rushed to sell rather than have to book a loss. The measure temporarily strengthened the exchange rate in a financial transactions market known as the blue-chip swap and prompted funds to stop taking on new client money for a brief period.

By Carolina Millan
October 27, 2015

* 3 percentage-point increase represents biggest in 18 months
* Move seeks to tame dollar demand following first-round vote

Argentina’s central bank sold 11.3 billion pesos in weekly notes, 5 percent less than at the previous weekly auction, even after raising interest rates by 3 percentage points Tuesday as the government tries to tame dollar demand ahead of a presidential election runoff.
The central bank on Tuesday raised interest rates by the most in more than 18 months, lifting rates on its fixed-rate notes at its weekly debt auction to 28.93 percent and 29.35 percent, for 91 and 119-day securities, respectively. The bank had first set the weekly guidance late Monday with rates unchanged.

The move comes as the country’s foreign-currency reserves are near a nine-year low and the nation struggles to maintain an overvalued exchange rate. Due to restrictions on purchasing dollars at the official rate, Argentines buy greenbacks on the street for as much as 15.81 pesos per dollar compared to the official spot rate of 9.53. The last time the monetary authority took such a bold move to raise rates was February 2014 on the heels of a 20 percent devaluation when the guidance jumped 9 percentage points.

“This is trying to combat the rise of the dollar by making rates more attractive,” said Leonardo Chialva, a partner at Delphos Investment in Buenos Aires.

The central bank announced later Tuesday that banks must pass on the increase in rates to savers. The bank ordered financial institutions to pay a minimum of 26.3 percent on 30- to 44-day deposits, rising to as much as 29.1 percent for deposits of more than 180 days.

“Peso savings are growing steadily, showing the trust of those who save money in our national currency instead of options in foreign currency,” central bank President Alejandro Vanoli said in a statement.

The measure follows an upset in presidential elections on Sunday where the opposition fared much better than expected and forced a second round on Nov. 22. To tame dollar demand, the government’s options include raising rates or cutting dollars sold to individuals for savings, which would be unpopular and could hurt the ruling party’s electoral chances, according to Puente strategist Alejo Costa.

“There’s a feeling that it’s not going to be enough,” Costa said. “The rate would have to be way higher to contain the difference in the exchange rates now. This measure is a drop in the sea.”

By Jorge Otaola
27 October 2015

BUENOS AIRES, Oct 27 (Reuters) – Argentina on Tuesday halved the daily amount of dollars companies can transfer abroad without authorization, currency traders said, while the country’s insurance regulator put new limits on the amount of hard currency assets insurers can hold.

The moves appeared to stem from the opposition’s success in forcing Sunday’s presidential election to a run-off vote, which could add to pressure on the central bank to shore up the peso currency as net foreign reserves run precariously low.

A central bank spokesman said he was not aware of the new curb on dollar transfers. But four currency market traders said the central bank had called commercial banks with a verbal directive to slash the daily limit on dollars that a single company can transfer outside Argentina to $75,000 without previous authorization.

“It’s a new move that intensifies state controls on the currency. It will have an impact, in particular on importers,” said one of the traders, declining to named because he is not authorized to talk to the media.

It was not clear how long the measure would remain in place.

Argentina’s dollar crunch has its roots in a legal battle with U.S. creditors over unpaid debt stemming back to its 2002 default on $100 billion dollars that left the country all but locked out of global debt markets.

Outgoing President Cristina Fernandez’s government has increasingly had to rely on its reserves to prop up the peso currency, pay for energy imports and meet debt obligations.

In 2011 she imposed capital controls and her leftist government has incrementally turned the screws as reserves run lower.

Argentina’s gross foreign reserves stand at $27.1 billion but economists estimate that net reserves amount to about half that.

In a resolution published in the government gazette, meanwhile, Argentina’s insurance regulator ordered insurers to adjust their foreign currency security holdings to equal the value of foreign currency contracts they hold.

Insurance companies tend to hold dollar-denominated or dollar-linked bonds. By forcing the adjustment, the regulator is requiring them to sell at least some of those bonds and hold pesos instead, putting the dollars back into the system.

Last month, in a similar move, Argentina’s market watchdog ordered mutual funds to value their holdings of dollar-denominated bonds at the inflated official exchange rate, rather than against the so-called “blue-chip” swap rate.

That led to a sell-off in securities, temporarily helping to stabilize the black market rate.

Currency traders on Tuesday quoted the black market rate at 15.800 per dollar compared with the official rate of 9.530.

By Nicolas Misculin
27 October 2015

BUENOS AIRES, Oct 27 (Reuters) – Mauricio Macri, Argentina’s opposition challenger in next month’s presidential run-off vote, said on Tuesday he wanted to find common ground with defeated candidate Sergio Massa and that talks had begun between the two camps.

Massa placed third in Sunday’s first round vote with 21.3 percent of support, and both Macri and ruling party candidate Daniel Scioli will need to court the 43-year-old lawmaker and his voters to win the Nov. 22 second round.

Massa is drawing up a policy blueprint to be discussed with either of his rivals still in the presidential race. On Monday, a Massa camp insider told Reuters that while Massa would not explicitly endorse Macri, the document would be a “wink” in his direction.

Asked if messages were being sent between the two campaign teams, the pro-business Macri told local TV channel Telefe: “Yes, we’re talking. There’s a willingness to agree on policies, a willingness to find common ground.”

Outgoing President Cristina Fernandez’s eight years in power have been deeply divisive. The fiery leftist is loved by the lower-class for expanding social welfare programs and protecting Argentine industry but reviled by others for suffocating the economy.

Scioli, a moderate within the broad Peronist movement that dominates Argentine politics, campaigned on a platform of “gradual change” to Fernandez’s model of leftist populism. Macri promises to quickly dismantle her trade and currency controls.

In the run-up to Sunday, centrist Massa said Scioli stood for a continuation of policies that had stunted economic growth, fueled inflation and drained central bank reserves. But he also said Macri could drive the economy into a new crisis by imposing pro-market policies too quickly.

Since the ballot, Scioli has launched a wave of attacks on Macri, branding his policy platform a throwback to neoliberal policies of the 1990s in the run-up to a devastating 2001-2002 depression.

On Tuesday, as he and Macri scrambled for middle-ground voters, Scioli said he was open to hearing Massa’s proposals.

“I will listen to ideas that are good for Argentina, whoever they come from,” Scioli told TV channel TN.

Massa served as Fernandez’ cabinet chief during her first term in office but broke away from the ruling party in 2013. He has accused Scioli of letting Fernandez dictate his campaign, playing on the fears that Scioli would be a Fernandez puppet.

“The people want change,” Massa told Radio Mitre on Tuesday. “If Scioli doesn’t start taking his own decisions then it’s better he is not president.”

27 October 2015

After Sunday’s big surprise in the Argentine presidential election, when the challenging center-right candidate Mauricio Macri finished only two percentage points behind pro-government favorite Daniel Scioli, triggering a runoff on November 22, a closer look at each candidate’s economic plan is in order.

The two candidates’ plans mostly coincide in their diagnosis of the situation but differ in their proposed solutions. Both candidates agree on proposals for taxes but disagree on how to tackle inflation and on dealing with the bond holdout funds, according to local media outlet Cronista.

So what do they propose?


Exchange rate: Scioli’s plan rules out accelerating the devaluation of the peso.

Foreign reserves: In order to boost rapidly dwindling foreign reserves, Silvina Batakis, who would be finance minister in a Scioli government, thinks it is fundamental to free up capital outflows, and the idea is to issue US$10bn in US-denominated bonds to allow firms to repatriate earnings.

Holdout funds: Instead of negotiating with the holdout funds, Scioli proposes gaining time by issuing debt with multilateral organizations such as the World Bank and in the meantime provide legal authorization for the repatriation of funds held abroad by Argentines – estimated at US$5bn-8bn – in order to boost reserves.

Inflation: This is not a priority for Scioli who aims for a reduction only in the longer term. The central aspect of the plan is to recover economic activity levels.

Taxes: He proposes eliminating taxes on agro exports with the exception of soy and to increase the tax-exempt amount on income for people earning between 25,000 (US$2,600) and 30,000 pesos a month.

Subsidies: Scioli proposes financing the end of agro taxes by reducing badly allocated subsidies, but maintaining those for oil producing provinces.


Exchange rate: Macri wants to end foreign exchange restrictions from day one, although his economic team concedes that is impossible without some previous measures. He proposes the devaluation of the peso to take the US dollar closer to 14 pesos, which would be the market value, rather than the official 9.6 pesos.

Holdout funds: He wants to regain access to international debt markets, and Macri’s plan includes an arrangement with the holdout funds with a 30% discount over the debt to be paid with a long-term bond issuance but without a cash disbursement. Access to capital markets would allow Argentina to raise cheaper debt: at a rate of 6%. This solution would cost US$19bn.

Inflation: This would be reduced in a sequential way. “The first step is to clarify the real rate of inflation. Then the president of the central bank and ministers would agree on a way to reduce it to two digits within three years,” said Hernán Lacunza, a member of Macri’s economic team, according to Cronista.

Taxes: Like Scioli, Macri proposes eliminating taxes on agro exports with the exception of soy and to increase the tax-exempt amount on income tax for those earning between 25,000 and 30,000 pesos a month.

Subsidies: Macri proposes gradually eliminating oil subsidies while maintaining subsidies for 2mn lower-income families.

By Charles Newbery
27 October 2015

Buenos Aires (Platts)–27Oct2015/1036 am EDT/1436 GMT Argentine oil production rose 0.1% in August compared with the year-earlier period, and gas output increased 4.4% over the same period, according to national Energy Secretariat data released Tuesday.

Crude production averaged 529,159 b/d in August, up 0.1% compared with 528,883 b/d in August 2014 and 0.6% lower than 532,187 b/d in July, the department said in a data report that did not specify reasons for the changes.

State-run YPF, which produces nearly 43% of the nation’s crude, led the year-on-year increase by boosting production 1.2% to 224,895 b/d in August compared with 222,269 b/d in the year-earlier month, the report showed.

YPF is helping to offset a national decline since a record 847,000 b/d in 1998 by ramping up the development of maturing fields with enhanced recovery techniques and by developing huge resources in the Vaca Muerta shale play. It is producing an average of 52,000 b/d of oil equivalent from Vaca Muerta, according to the company’s latest numbers released this month. YPF has set a target of increasing crude production by 5% this year compared with 2014, after ramping it up 5.3% in 2014 on the year.

Other leading producers are BP-controlled Pan American Energy, Argentina’s Pluspetrol, China’s Sinopec, Brazil’s Petrobras, Chevron and Argentina’s Tecpetrol.

Meanwhile, gas production rose 4.4% to 119.9 million cu m/d in August, compared with 114.8 million cu m/d in the year-earlier period, and was up 2.2% compared with 117.3 million cu m/d in July, the secretariat said. Of the output in August, YPF produced an average of 35.9 million cu m/d, or a 30% share. Argentina petroleum Oil production (b/d)

By Jonathan Wolfe
28 October 2015

The Argentine cartoonist Ricardo Siri, better known by his middle name, Liniers, was flipping through some of his work, which was projected on a screen for a small but rapt audience at the Society of Illustrators in New York a few days ago. When he landed on a comic strip that begins in black and white but explodes into color after a man gets a kiss from a passing woman, sighs erupted from the crowd.

”A lot of my strips make women, mainly, go ‘awww’ ” Liniers said. ”That’s my superpower.”

Over the last few years, Liniers, a big name in cartooning in Latin America, has been attracting fans in the United States — a rarity for a foreign cartoonist. He has drawn three covers for The New Yorker since last year — the most recent one, a spoof on hipsters, depicts a young woman using her partner’s beard as a scarf — and has had two books published in the United States during the past month: ”Written and Drawn by Henrietta” (Toon Books), a children’s book released in English and Spanish; and ”Macanudo #3” (Enchanted Lion), a compilation of his comic strip ”Macanudo,” which has run for 13 years in the newspaper La Nación. (Macanudo is a vintage Argentine word that roughly means ”cool” or ”everything’s fine.”)

”When I started the comic everything was horrible,” Liniers, 41, said in a recent interview at his publisher’s office in SoHo at the start of an East Coast book tour. ”The towers fell here,” he said, ”and in Argentina there was a huge economic tailspin and we had five presidents in a week. So I wanted to create something optimistic as an act of resistance, like a positive revolution.”

In ”Macanudo,” plotlines usually do not extend past the punch line, if one exists at all, and the characters and type of humor can change daily. Penguins, gnomes and an olive named Oliverio are only a handful of the creatures that float in and out of ”Macanudo.”

”I like to surprise,” Liniers said. ”When readers open up the paper, I don’t want them to know what to expect.”

Graphically, the strip’s style was influenced by Art Spiegelman’s ”Maus” and Matt Groening’s ”Life in Hell.” (Liniers himself appears in ”Macanudo” as a white rabbit with features borrowed from art both Mr. Spiegelman and Mr. Groening.) The strip’s humor, Liniers says, was influenced by ”The Far Side,” ”Calvin and Hobbes” and Argentine comics.

He comes out of the vibrant tradition of cartooning in Argentina, where comic art boomed in humor magazines after World War II and is still popular today. The most famous comic strip in Argentina, ”Mafalda” by Joaquín Salvador Lavado, can still be found in kiosks across Latin America (and Europe) more than 40 years after the strip ended.

Though popular, ”Macanudo” is somewhat unusual; its gonzo humor and intent can be elusive. ”At first the papers didn’t want it,” said Angie Erhart Del Campo, Liniers’s wife and the co-founder of La Editorial Común, which publishes his books and those by other graphic artists in Argentina. ”It’s not a comic strip like ‘Peanuts’ or ‘Calvin and Hobbes’ that has all regular characters. A lot of older people still don’t get it. Friends of Ricardo’s parents will come up to me and say, ‘I know he’s famous, but I still don’t get them.’ ”

Part of the first generation that came of age in post-dictatorship Argentina, Liniers grew up in Buenos Aires, where he was sent to an English-language school by his father, a lawyer and an Anglophile. As a young man, Liniers traveled to North America and read American literature and comics in English.

Argentine comics tend to offer biting social commentary or jabs at the political establishment. Juan Sasturain, a writer, humorist and co-host of the television show ”Plop!: Caete de Risa,” about Argentine humor, said that comics have always been a diversion. But since the 1970s, he added, the comics page ”has spoken about the same things as the front page.”

And yet, ”Macanudo” bucks this trend too.

”Liniers,” said Mr. Sasturain, who has collaborated on a book with him, ”has gone way beyond the Argentine tradition. He has adopted graphic culture and he likes contemporary culture, and he’s created a huge world where not even politics or strict sociological points exist.”

Françoise Mouly, art editor at The New Yorker and the founder of Toon Books, first came across Liniers’s work in Paris around six years ago. Ms. Mouly said she thought children’s books would be a natural extension of his frequently intimate style, and she has commissioned two from Liniers for Toon Books: ”The Big Wet Balloon” (2013) and now ”Written and Drawn by Henrietta.” As for ”Macanudo,” Ms. Mouly said it was a coup for a foreign cartoonist to be published in the United States, where ”almost nothing ever gets in” because there is already so much comic art available.

Liniers understands; after more than a decade of cartooning, he is finally publishing books in the United States, fulfilling his dream of working alongside the North American cartoonists he adores.</
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By Simon Romero and Jonathan Gilbert
27 October 2015

BUENOS AIRES — With a largely noncombative campaign that stunned Argentina by pushing the presidential race into a tightly contested runoff, Mauricio Macri, the mayor of Buenos Aires, also achieved another surprise, driving a wedge into the dominating political movement led by President Cristina Fernández de Kirchner.

In the race to succeed Mrs. Kirchner, both Mr. Macri, who is proposing economic shifts to reduce protectionism, and Daniel Scioli, a former speedboat racer endorsed by the president, scrambled on Monday to reposition their campaigns. Both need voters who opted for other candidates, opening a frenetic new phase in Argentine politics before the runoff election on Nov. 22.

Pollsters had cast Mr. Scioli as the front-runner, but momentum appeared to be shifting to Mr. Macri, especially after a rising star in his party, María Eugenia Vidal, the deputy mayor of Buenos Aires, defeated Aníbal Fernández, Mrs. Kirchner’s cabinet chief, in the governor’s race in Buenos Aires Province.

In obtaining control of the province, a coveted stronghold, Mr. Macri’s party, called Let’s Change, not only defeated one of Mrs. Kirchner’s top supporters. The result was also seen as a referendum on Mr. Scioli, the governor of Buenos Aires Province since 2007.

Political analysts paid particular attention because voting preferences in the province have historically foretold important shifts in Argentine politics.

”The candidate who has best interpreted the moment is Macri,” said Carlos Germano, an independent analyst. ”He needs to keep pointing toward dialogue and harmony,” he said, predicting that Mr. Macri would meet with leaders of the other opposition parties to solicit their support.

Mr. Scioli took 36.9 percent of the vote, compared with 34.3 percent for Mr. Macri in the first round — an unexpectedly slim margin that astounded many Argentines. Mr. Macri ran a largely nonconfrontational campaign in which he obtained high levels of support in Córdoba, Argentina’s second-largest city.

”It utterly surprised me,” Jorge Vargas, 65, who polishes floors for a living in Buenos Aires, said of the results. ”I voted for Scioli because I don’t like Macri’s background. He’s completely bourgeois.”

Still, political analysts lauded Mr. Macri’s attempts to soften his patrician image by trying to appeal to some in Peronism, the ideologically flexible political movement that has held sway in Argentina for decades. Governing Argentina for the last eight years, Mrs. Kirchner repositioned her faction of Peronism to enhance the role of the state in the economy and increase antipoverty spending, while stepping up attacks on critics.

But with his strong showing, attention shifted on Monday to Mr. Macri, 56, who was raised in one of Argentina’s wealthiest families and gained prominence as the president of Boca Juniors, one of Argentina’s most popular soccer clubs. He is running to the right of Mr. Scioli, but he has emphasized that he would seek to maintain some of Mrs. Kirchner’s policies on social spending.

Reacting to the runoff outcome, Agustín Rossi, Mrs. Kirchner’s defense minister, told reporters that the president’s supporters needed to ”be humble” in mobilizing a response to Mr. Macri’s rise. Mr. Rossi conceded that Mr. Macri had run a smooth campaign, highlighted by alluring ”sound bites,” but he said Mr. Macri could end up eroding social welfare benefits.

Mr. Macri entered politics after a harrowing episode in 1991 in which he was kidnapped by police officers and transported to a hiding place inside a coffin. Twelve days later, he was freed after his father, an Italian-born magnate, paid a multimillion-dollar ransom.

His father, Franco Macri, 85, assembled a business empire involved in construction and car manufacturing. Sometimes openly dismissive of his son’s political ambitions, Franco Macri said last year that his son had ”the brain to be president, but not the heart,” explaining that he believed Argentina’s next president had to come from the radical wing of Mrs. Kirchner’s political movement.

As mayor of Buenos Aires, Mr. Macri has remodeled public spaces, including plazas and the riverfront, and built bus lanes along major thoroughfares — achievements welcomed by voters. He has also sought to develop the poor south side of the city by encouraging technology businesses, as well as municipal government offices, to set up in the area.

Both Mr. Macri and Mr. Scioli must attract more voters, especially those who opted for Sergio Massa, a former ally of Mrs. Kirchner who took 21.3 percent of the vote, and those who supported small leftist parties.

After avoiding a debate before the first round of voting, Mr. Scioli said on Monday that he would accept a debate with Mr. Macri, reflecting how the candidate endorsed by Mrs. Kirchner now finds himself on the defensive. Both candidates have avoided the president’s belligerent tone in favor of a more mollifying approach.

In reaction to a potential shift if Mr. Macri’s momentum builds, Argentine stocks surged on Monday. But analysts said such sentiment failed to reflect the possibility of a bruising runoff campaign. Moreover, Mr. Macri recognizes that he must attract supporters of Mr. Scioli, a challenging aim in what remains a highly polarized society.

”For days, Macri has been working on this fissure, probing the Peronists from within,” Carlos Pagni, a political columnist, wrote in the newspaper La Nación.

Some voters were perplexed by the runoff. ”Scioli’s no good; he’s under Cristina’s thumb,” said Mary Dany Correa, 82, a retired civil servant who voted for Mr. Massa. ”Macri’s done good things in the city, but I don’t see him as capable of running the whole country. There are a lot of things to fix.”

But Mr. Macri’s showing uplifted many supporters who want a change after 12 years of Mrs. Kirchner and her predecessor, her late husband, Nestor Kirchner.

Santiago Elizalde, 27, an information technology salesman who voted for Mr. Macri, said that while he was ecstatic that his candidate had upended the race, ”it’s a match he still has to play.”

27 October 2015

Argentina voters are tired of sinking living standards and shrinking freedoms. At least that’s the hopeful reading of Sunday’s presidential election in which more than 60% of voters failed to pull the lever for the candidate backed by President Cristina Kirchner.

Mrs. Kirchner is barred from running for a third four-year term, so her Peronist Front for Victory party backed Buenos Aires province governor Daniel Scioli. He won only 36.5% of the vote while Buenos Aires city mayor Mauricio Macri surprised pollsters with 34.7%. Sergio Massa, a Peronist member of the lower house, finished third with 21%. Mr. Massa hasn’t said who he will back in the Nov. 22 runoff, but he also campaigned on the need for a change.

Argentina is a mess. The Kirchners — Cristina for eight years and her late husband Nestor for four before that — have promoted socialist economics and protectionism. They politicized the judiciary, seized private property and stiffed international creditors. Inflation is running at 25% by private estimates, and capital is fleeing the country. The central bank may run out of reserves by the end of the year. Mr. Macri has said he’ll lift exchange controls while ending the country’s trade and financial isolation.

The clearest sign that more Argentines are coming out of their populist trance was the result in the race for governor in the wealthy province of Buenos Aires, a Kirchner stronghold where one in every four Argentines lives. Peronists have held the province for 28 years. But on Sunday 42-year-old Maria Eugenia Vidal, a member of Mr. Macri’s Cambiemos coalition, handily defeated Mrs. Kirchner’s candidate.

That bodes well for Mr. Macri if the presidential runoff is fair, which is never a sure thing in Peronist Argentina.

By Taos Turner and Juan Forero
27 October 2015

BUENOS AIRES — Until Mauricio Macri stunned Argentina’s political establishment on Sunday by triggering a second round of presidential voting, many of his compatriots saw him as a wealthy heir unconnected to the problems of ordinary Argentines.

But as the votes were tallied on Monday, it emerged that the 56-year-old mayor of Buenos Aires had marshaled a far larger percentage of votes than polls had forecast for Sunday’s first round. Now Mr. Macri, the son of an Italian immigrant who grew rich and influential here, will challenge the ruling Peronist movement’s candidate, Daniel Scioli, in a runoff that could truncate the populist party’s plans to extend its 12-year rule.

“The truth is that Macri rules,” said Leon Luna, 37, who as a municipal truck driver is the kind of voter Peronists have wooed for decades.

Polls ahead of Sunday’s vote suggested that Mr. Scioli, a 58-year-old ally of President Cristina Kirchner and the governor of Buenos Aires province, would come close to achieving the result needed to win outright: 40% of the vote and a 10-point lead over Mr. Macri. But by Monday, with 97% of the votes counted, Mr. Macri had 34.3% of the vote, and Mr. Scioli getting just over two points more than that.

Observers say Mr. Macri upended the race by highlighting what his campaign called his efficiency in running this vast city, rather than focusing on his personality. Mr. Scioli, who was vague about how he would govern and didn’t attend a presidential debate, was rejected by 63% of voters.

“Macri has created a party infrastructure with a diverse membership base that tried to get out of the center-right corset,” said Juan Cruz Diaz, managing director of Cefeidas, a risk advisory firm. “He was able to capture the imagination of Argentines this way.”

Many people who voted for Mr. Macri said they believed him to be the best candidate to undertake the overhauls economists say are needed to correct an economy whipsawed by high inflation and fast-depleting foreign-currency reserves.

“Argentina needs change and we’re going to bring change,” Mr. Macri told supporters on Monday morning.

Between now and Nov. 22, Mr. Macri and Mr. Scioli will be vying for the 21% of the vote that went to third-place Sergio Massa, a dissident Peronist now thrust into the role of kingmaker.

Mr. Massa, 43 years old, was once cabinet chief to Mrs. Kirchner but hasn’t said whom he would support. A spokesman said senior members of his coalition would meet this week to discuss a strategy.

A poll conducted a month ago by Consultora Wonder showed that 71% of Mr. Massa’s voters would go for Mr. Macri. A key reason, said Carolina Yellati, the firm’s director, is that Mr. Massa’s supporters generally oppose Mrs. Kirchner’s government.

On Monday, Mr. Scioli, who ran a cautious and civil campaign, came out aggressively, telling prospective voters that Mr. Macri would end the country’s bountiful social programs if elected. “I know very well what we want to care for, what we want to protect,” he told supporters Monday.

Leandro Maturana, a unionized government worker and die-hard Peronist, believes the message. “Macri is a businessman who will take away the subsidies and cut the budget, to make an adjustment against Peronist people,” he said.

Mr. Macri has spent much of his life in the boardroom, moving up in his father’s construction company before becoming an executive at a car manufacturer.

Before becoming mayor of Buenos Aires, he was president of Boca Juniors, a beloved soccer club that plays in a working-class district long home to immigrants.

By Andres D’Alessandro, Chris Kraul
27 October 2015

The presidential race is surprisingly close as Buenos Aires’ mayor forces next round with ruling party candidate.

In a much-closer first round of presidential voting than expected, the mayor of Buenos Aires, Mauricio Macri, forced a Nov. 22 runoff with Daniel Scioli, the ruling party candidate who has been favored to become Argentina’s next president.

With nearly all votes counted, Scioli, who is governor of Buenos Aires state and a former vice president, tallied 36.9% of the ballots cast. Macri was close behind with 34.3%.

Scioli, the handpicked choice of outgoing President Cristina Fernandez de Kirchner, needed at least 40% and a 10-percentage-point advantage to avoid a second round of voting.

When it became clear he would not win outright, Scioli emerged from his campaign headquarters in Buenos Aires on Sunday night to ask for independent voters’ support.

Macri was euphoric. “What happened today has changed the political history of the country,” he told supporters.

An engineer by training, Macri is a centrist technocrat who has promised to make Argentina function more efficiently by building better public transportation, schools and hospitals. He said he would digitize the bureaucracy and bring down costs.

The two will face off in the first presidential runoff in Argentine history. The third-place finisher, congressman Sergio Massa, who garnered 21.3% of votes, could play kingmaker if he throws his support behind either candidate.

Massa gave no indication of whether he would endorse either candidate, saying only that he would release a document in the coming days with his proposals for the next president.

One reflection of the disappointing results for the president was that Anibal Fernandez, her Cabinet chief and handpicked candidate to replace Scioli as Buenos Aires state governor, lost by 5 percentage points to Macri ally Maria Eugenia Vidal.

The loss marks the first election since 1987 that a Peronist — the name given to followers of late Argentine President Juan Peron and his second wife, Eva Peron — has not won the governorship of the country’s most populous state.

Argentines turned out in big numbers — 79% of the 32 million eligible voters cast ballots — to decide Sunday’s election. The voting was widely seen as a referendum on the presidencies of Fernandez and her late husband, Nestor Kirchner. Between them, they have led Argentina since 2003.

Although many young and lower-middle-class voters favor the president’s support for human rights and a social safety net, others expressed dissatisfaction with a 28% inflation rate and a stagnant economy that last year shrank 2% in terms of the value of total goods and services produced.

Cold but mostly sunny weather nationwide boosted the turnout, election officials said. Many voters cast their ballots early Sunday to return home in time to watch Argentina’s national rugby team lose to Australia in the televised semifinals game of the world championship in London.

Scioli, who ran on the Victory Front ticket, promised to continue the president’s social welfare policies with some changes, including a harder line on rising crime. He also called for economic reforms, including the settling of a decade-old bond default.

“I voted for Scioli because I understand he will maintain the project that Nestor and Cristina began,” 30-year-old graphic designer Emilio Ferreyra said after voting in the capital. “It’s a way of staving off the right wing.”

After voting in Dique Lujan in Buenos Aires state, Scioli had declined to predict an outcome.

The election may mark the end of national power of “Kirchnerismo,” but the family will remain a local force at least. The couple’s son, Maximo, was elected to a national congressional seat for Santa Cruz state, and Nestor Kirchner’s sister, Alicia, was elected Santa Cruz governor.

Though many voters expressed support for Fernandez’s wealth-redistribution programs and prosecution of those implicated in atrocities committed during the 1976-83 dictatorship, it was clear many were tired of her heavy hand in the nation’s economy.

“I voted for Macri because in the last few years the country hasn’t grown economically or socially,” said Karina Cunibertti, 46, an insurance company employee in Buenos Aires. “Macri represents the possibility of change. I hope he wins the runoff and reestablishes the good functioning of the government and brings about real opportunity for all.”

By Andre F. Radzischewski
27 October 2015

BUENOS AIRES — The stunning virtual tie in Sunday’s presidential election here suggests the populist ruling coalition founded by Cristina Kirchner and her late husband and predecessor, Nestor Kirchner, may see its long grip on power crumble when the term-limited incumbent leaves the Casa Rosada, Argentina’s White House, on Dec. 10.

Pollsters had widely expected Argentines to hand the presidency to Daniel Scioli, the governor of Buenos Aires province and Ms. Fernandez’s handpicked heir, effectively extending the Kirchners’ 12-year reign. Instead, the unexpectedly strong showing of their longtime nemesis, pro-business Buenos Aires Mayor Mauricio Macri, has forced a runoff and fueled what one commentator called a “social revolution against Kirchnerism” that could well lead to a long, unheard-of center-right victory in South America.

“These results are a very positive outcome for Macri and a big disappointment for Scioli,” Credit Suisse economist Casey Reckman wrote in a note to clients Monday. Given the way he won the expectations game, Mr. Macri “will likely have stronger momentum going in to the next month of campaigning thanks to yesterday’s outcome.”

Sunday’s result may even reverberate beyond Argentina’s borders as other leftist leaders in the hemisphere, such as Brazilian President Dilma Rousseff and Venezuela’s President Eduardo Maduro, are increasingly coming under fire and seeing their power threatened for the first time in years.

“People are tired of this kind of populism” often linked to a high level of corruption, said Marcelo Camusso, who heads the political science department at the Catholic University of Argentina.

The most important figure in Argentina’s Nov. 22 runoff, though, may not be Mr. Macri nor Mr. Scioli, but Sergio Massa — Sunday’s third-place finisher — who for now seems to hold the keys to the presidential palace.

Like Mr. Scioli, Mr. Massa forms part of the larger Peronist movement and once served as Cabinet chief early on in Ms. Fernandez’ administration. But the mayor of a Buenos Aires suburb has since turned into a vociferous critic of the incumbent, accusing her of unjust tax policies, widespread corruption and a failure to rein in violent crime and drug traffickers.

Wooing Massa

That mixed political heritage meant that both Mr. Macri and Mr. Scioli on Monday immediately laid claim to the 21 percent of votes Mr. Massa had captured in Sunday’s first round. “I feel that they think the same as us here,” Mr. Macri said about Mr. Massa’s supporters. “He also took a position for change.”

Massa backers were “much farther away from Macri than from us,” Mr. Scioli countered hours later. But for the Fernandez heir, reaching out too far to the Peronist “dissident” would invariably force a break with the Kirchnerist orthodoxy, a dangerous game that cuts into his own base, said Mariano de Vedia, a political commentator for the La Nacion daily.

“Scioli appears very weakened. It is unlikely that he can improve his performance” Mr. de Vedia said. “He faces a dilemma; I do not think he is capable” of breaking with Ms. Fernandez.

The governor himself seemed to acknowledge his conundrum Monday as he tried to shift attention to a proposed televised debate with Mr. Macri, an encounter he had previously ruled out by arguing that his positions were well known. The Buenos Aires mayor almost immediately took his rival up on the challenge, and his Cambiemos (“Let’s Change”) coalition said Mr. Macri had never shied away from such a debate.

Mr. Scioli’s change of heart, meanwhile, came after Vice Mayor Maria Eugenia Vidal, Mr. Macri’s second in command in the capital, was confirmed to have won the gubernatorial election in Buenos Aires to succeed Mr. Scioli — the first non-Peronist governor there since 1987.

“This was a truly historic event [that] will produce an enormous change in Argentine politics,” Mr. Camusso predicted.

Critics had repeatedly accused Ms. Vidal’s challenger, none other than Ms. Fernandez’s Cabinet chief, Anibal Fernandez, of ties to organized crime, and the unpopular hard-liner’s nomination may have been too much even for the president’s backers. Mr. Camusso said the message to Ms. Fernandez was: “We follow you, but we are not going to follow you anywhere.”

Mr. Massa, meanwhile, has so far kept mum on which candidate — if any — he might endorse in the coming runoff.

“In three weeks Argentines will have to choose a new path,” he told the crowd at his election night rally. “We know the role we play. In the next hours we will get together [to announce] what we are going to do.”

But how he aligns his loyalties may depend less on ideology and more on his personal ambitions, said Joaquin Morales Sola, a prominent columnist with La Nacion. Mr. Massa stands to emerge as the unchallenged leader of the Peronist movement if Mr. Scioli — and, by extension, Ms. Fernandez — were to lose in November.

“It is in Massa’s interest that Macri be president,” Mr. Morales Sola said.

“Massa can be an important guide for a disoriented and beaten Peronism,” Mr. Camusso agreed.

Not all of his backers may comply with a likely Massa endorsement, Mr. Morales Sola said. Still, the vast majority of Argentines, who in 2011 reelected Ms. Fernandez with 54 percent of votes, this time preferred opposition candidates. “I don’t know where [Mr. Scioli] is going to get [that] 15 percent he needs to win the runoff,” he said. “To me, he is in a very complicated situation.”

Argentina’s long-suffering investors, meanwhile, seemed delighted with the prospect of a Macri victory. The Argentine Business Association praised the vote and — in thinly veiled criticism of Ms. Fernandez’ autocratic style — called on leaders to “deepen the dialogue between all stakeholders” so as to propel “the social and economic development of our country.”

By Peter Prengaman
October 26, 2015

BUENOS AIRES, Argentina — The top two presidential candidates in Argentina reset their campaigns on Monday after a razor-close election vote forced a runoff and cast doubt on the legacy of President Cristina Fernandez, a polarizing leader who spent heavily on programs for the poor but made enemies with her brash style and failure to solve economic ills.

Sunday’s presidential election shook up the political landscape. Numerous polls in recent months had projected that ruling party candidate Daniel Scioli would win by 10 percent or more.

Scioli, the governor of the Buenos Aires province, had been viewed as an easy front-runner thanks to the support of Fernandez, a charismatic two-term president. Fernandez won admirers for rewriting the South American country’s social contract but also drew sharp criticism for widespread allegations of corruption in her administration and for fights with political opponents and other nations that many Argentines found tiresome.

With 97 percent of polling places reporting Monday, Scioli had 36.9 percent of the vote, while opposition candidate Mauricio Macri had 34.3 percent.

That forces a second round, since to win in the first round a candidate needs 45 percent or 40 percent and a 10-point advantage over the nearest competitor.

“A runoff will be like reshuffling the cards and dealing again,” said Mariel Fornoni, director of consulting firm Management & Fit. “The political landscape will be very different on Nov. 22”

Scioli reminded supporters on Monday that he captured the most votes, and warned that Macri would undo popular state programs.

“Sometimes the word ‘change’ can be attractive in politics,” said Scioli, arguing that the state should continue to have a strong hand in Argentine society.

Scioli also invited Macri to a debate, an about-face after refusing to debate the other five candidates a few weeks ago.

Macri called the vote “transformative,” and promised to convince voters who didn’t choose him on Sunday.

“We will correct the abuses and the fraud of inflation,” Macri said, reiterating one of his common themes.

Many Argentines are worried about high government spending and inflation around 30 percent. Many have also grown tired of a legal fight with creditors in the U.S. that has kept the country out of international credit markets.

Macri presented himself as the man to put Argentina’s economy in order, promising to resolve the debt fight and lift unpopular currency restrictions.

But he also tailored his campaign to the millions who receive some form of government support. He promised to maintain popular programs for the poor and increase spending in some areas.

He even inaugurated a statue of Juan Peron, a three-time former president who founded the ideological movement to which Fernandez adheres.

Scioli, a former boat racer who lost his right arm in an accident, presented himself as the continuation of Fernandez’s policies but who would also fix anything broken.

Both candidates’ decision to straddle the center also led to many questions about what they would really do in office.

“I think this election was an expression of widespread fatigue” with the current government, said Jorge Neimark, an 85-year-old retired lawyer. “Even if Macri didn’t represent any ideology, he does represent a change.”

Over the next month, both candidates will be heavily courting Sergio Massa. The former Fernandez loyalist came in third on Sunday, garnering 21.3 percent of the vote.

On Monday, analysts, pundits and ordinary Argentines were debating theories on why the polls were so far off. A popular mashup video on Twitter showed reality television personality and U.S. presidential candidate Donald Trump in the board room of his show “The Apprentice.”

With a headline addressed to Argentine pollsters, Trump is seen doing his signature “You are fired!”

By Benedict Mander
October 26, 2015

Argentine assets rallied strongly on Monday after Mauricio Macri, the reformist mayor of Buenos Aires, raised investor hopes that the ruling Peronist party would soon be ousted from power after an unexpectedly strong showing in presidential elections on Sunday.

With an end in sight for 12 years of populist rule by President Cristina Fernández de Kirchner and her late husband and predecessor Néstor Kirchner, optimism is running high that centre-right Mr Macri could beat Daniel Scioli, the government-backed candidate, in a run-off vote next month.

Polls in the run-up to the vote had shown Ms Fernández’s anointed successor with as much as a 10-point lead over his more market-friendly rival; however Mr Scioli only won 36.9 per cent of the vote, while Mr Macri gained 34.3 per cent, with 97 per cent of votes counted.

Because of Argentina’s unique electoral rules, Mr Scioli needed 45 per cent of the vote, or 40 per cent plus a 10-point lead over Mr Macri, to win outright. The two contestants will now face off in a second vote on November 22.

Mr Macri’s stunning performance has boosted investor hopes that Argentina will break from Peronism, whose dominance of Argentine politics over the last 70 years has coincided with the nation’s downfall from one of the richest in the world to one of Latin America’s most troubled economies.

Prices for Argentina’s dollar bonds due 2017 jumped more than 10 per cent to 111.50 cents on the dollar on Monday. Yields on the bonds plummeted from 7.46 per cent to just under 1 per cent, before rising to 1.83 per cent. Investors also bid up the bonds due 2033 to an eight-year high of 110 cents on the dollar.

Andrew Stanners, an investment manager at Aberdeen Asset Management, described the result as “a welcome surprise”. “Macri is the candidate who is most keen to get on and reform Argentina’s economy. Those reforms will be pretty painful but it’s encouraging that the country seems to be realising that they are desperately needed by voting for him,” he said.

Mr Macri would move fast to fix serious macroeconomic imbalances, which include a ballooning fiscal deficit financed by the central bank, precariously low foreign exchange reserves and one of the highest inflation rates in the world.

The former president of the Boca Juniors football club has pledged to remove strict capital controls immediately and allow the overvalued peso currency to float freely. He would also tighten fiscal policy by cutting back on costly subsidies and attempt to resolve a long-running creditor dispute that has blocked Argentina’s access to the international capital markets since a $100bn sovereign debt default in 2001.

By Benedict Mander
October 26, 2015

Branded an international financial pariah since what was then the biggest sovereign debt default in history in 2001, investors are optimistic that Argentina will soon come in from the cold.

A stunning performance in presidential elections on Sunday by Mauricio Macri, the centre-right mayor of Buenos Aires who campaigned for change, has raised hopes that he could clinch a victory in a run-off vote on November 22. The prospect of a break from rule by Argentina’s dominant Peronist party sent bond prices soaring on Monday.

“‘Macrinomics’ is now a distinct possibility. This would be a positive for the country,” said Edward Glossop, emerging markets economist at Capital Economics in London. “It’s clear that the tide is turning in Argentina and disillusionment with interventionist and populist policies is growing,” he added.

Markets see whoever wins the run-off vote — Mr Macri is set to face off against the government-backed Daniel Scioli, the moderate Peronist governor of the province of Buenos Aires — as an improvement on the last 12 years of rule by President Cristina Fernández and her late husband and predecessor, Néstor Kirchner.

But Mr Macri, who some pollsters had predicted would not win enough votes to make it to the second round, has promised to move much faster to fix serious macroeconomic imbalances, which include a ballooning fiscal deficit financed by the central bank, precariously low foreign exchange reserves and one of the highest inflation rates in the world.

“A Scioli victory in the first round would not have been bad, but a Macri victory in the second round would make this an economic normalisation trade, not just an ‘anybody but Cristina’ trade,” says Daniel Freifeld, principal of Callaway Capital Management, an investment firm.

“Equity valuations and yields should converge with regional averages, which will translate into significant gains,” he added.

Mr Macri has pledged to remove strict capital controls immediately and allow the overvalued peso to float freely. The former president of the Boca Juniors football club would also tighten fiscal policy by cutting back on costly subsidies and attempt to resolve a long-running creditor dispute that has blocked Argentina’s access to the international capital markets since its $100bn sovereign debt default.

Meanwhile Mr Scioli has promised to implement more “gradual” reforms, and warns that Mr Macri would represent a return to the neoliberal economic policies of the 1
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By Peter Prengaman
October 26, 2015

BUENOS AIRES, Argentina — The ruling party’s presidential candidate promised continuity with some changes. The leading opposition candidate promised changes with some continuity.

Argentine voters seemed to call that a draw in Sunday’s election, giving the two men a neck-and-neck finish and forcing a runoff in their bid to succeed President Cristina Fernandez, a polarizing leader who garnered both devotion and loathing as she spent heavily on the poor and blasted political opponents and even other nations like the United States.

With 80 percent of polling places reporting early Monday, opposition candidate Mauricio Macri and ruling party candidate Daniel Scioli each had 35 percent of the votes. Sergio Massa, a former Fernandez loyalist who broke away to form his own political movement, was third in the six-candidate field with 21 percent.

The unexpected tight finish means Macri and Scioli will square off in a Nov. 22 runoff. To win the first round, a candidate had needed 45 percent of the votes or 40 percent and a 10-point advantage over the nearest competitor.

Scioli, the governor of the Buenos Aires province, had been viewed as an easy front-runner thanks to the support of Fernandez, who won admirers for rewriting Argentina’s social contract but also drew sharp criticism for widespread allegations of corruption and numerous economic ills, like high inflation.

Numerous polls had predicted Scioli would win by more than 10 points, indicating the only question was whether he could gain enough votes to avoid a runoff.

The strong showing by Macri, the mayor of Buenos Aires, underscored that many voters are ready for change after 12 years of Kirchnerismo, the political movement founded by Fernandez and her late husband and predecessor as president, Nestor Kirchner.

“What happened today changes the politics of this country,” Macri told supporters late Sunday.

Scioli, the governor of the Buenos Aires province and a former vice president, presented himself as the continuation of Fernandez’s policies but who would also fix anything broken.

“I invite undecided and independent (voters) to join me in this great celebration of Argentine development,” Scioli told a gathering of supporters late Sunday.

Macri campaign as the candidate to put Argentina’s economy in order, promising to resolve a long-running fight with U.S. creditors and lift unpopular currency restrictions.

But he also tailored his campaign to the millions who receive some form of government support. He promised to maintain popular programs for the poor and increase spending in some areas. He even inaugurated a statue of Juan Peron, a three-time former president who founded the ideological movement to which Fernandez adheres.

“Macri can inaugurate whatever he wants,” said Claudio Toledo, a Scioli voter. “I don’t trust Macri.”

While Macri’s moves raised eyebrows and drew sharp criticism from Scioli, they likely helped Macri capture undecided voters. But both candidates’ decision to straddle the center also led to many questions about what they would really do in office.

Many Argentines are worried about high government spending and inflation around 30 percent as well as being concerned about the legal fight with creditors in the U.S. that has kept the country out of international credit markets.

Still Argentines have a nightmarish reference point for a truly bad economy: the financial collapse of 2001-2002, when the country defaulted on $100 billion in debt and overnight millions of middle class people were impoverished. And Fernandez and her late husband are widely credited with lifting Argentina up from that crisis.

Fernandez sharply increased spending on social welfare programs, which range from work training to stipends for single mothers. Her government was the first in Latin America to legalize gay marriage, and it nationalized airline Aerolineas Argentinas and the YPF oil company while strengthening ties with Russia and China.

Scioli, a former boat racer who lost his right arm in an accident in 1989, bristled at suggestions that Fernandez would continue to dominate behind the scenes.

“What Scioli would do in office is a mystery,” said Maria Fernandez, who owns a real estate company. “Will he take orders from Cristina or do something else?”

“I don’t want to find out,” added Fernandez, who voted for Macri.

By Peter Prengaman
October 25, 2015

BUENOS AIRES, Argentina — In one of the most important elections of a generation, Argentines on Sunday chose between a ruling party candidate who promised to continue with the loved and sometimes loathed policies of President Cristina Fernandez and an opposition leader who argued the South American nation needs an overhaul.

It was no surprise that the leading candidates defined themselves in terms of Fernandez, a polarizing leader who along with her late husband dominated national politics for 12 years and rewrote the country’s social contract.

Polls closed in the evening without any reports of disturbances, and election officials said the first official results would not be known until late Sunday.

During the chilly but clear day when bars were closed and there were not the usual weekend soccer games, millions filed into schools, churches and other businesses converted into polling places to cast their votes — sometimes undecided right up to the last moment.

“The truth is I don’t like any of the candidates,” said Anai Roy, a college student who said she would make a choice in the polling booth. “So I just have to decide who is the best of bad.”

The decisions of voters like Roy would be key, as Argentines have been deeply divided about the rule of Fernandez and about who might improve the economic problems and corruption plaguing the nation of 41 million people.

Inflation is around 30 percent, the economy is stagnant and a bitter court fight with a group of creditors in the U.S. has scared off investors and kept Argentina on the margins of international credit markets.

But Argentines have a unique, nightmarish reference point for a truly bad economy: the financial collapse of 2001-2002, when the country defaulted on $100 billion in debt and overnight millions of middle class people were impoverished.

“The economy is OK. It’s not great,” said Maria Victoria Murillo, an expert on Argentine politics at Columbia University’s School of International and Public Affairs. “But for Argentina, OK is pretty good.”

Daniel Scioli, the governor of the Buenos Aires province and a former vice president, was the chosen successor to Fernandez, who nears the end of her second term with approval ratings around 50 percent.

Fernandez and her late husband and predecessor as president, Nestor Kirchner, are widely credited with lifting the nation after the collapse. Fernandez sharply increased spending on social welfare programs, which range from work training to stipends for single mothers. Her government was the first in Latin America to legalize gay marriage, and it nationalized airline Aerolineas Argentinas and the YPF oil company while strengthening ties with Russia and China and often accusing the United States of meddling in the country’s affairs.

Scioli, a former boat racer who lost his right arm in an accident in 1989, presented himself as the continuation of Fernandez’s policies who would also fix anything broken. He bristled at suggestions that Fernandez would continue to dominate behind the scenes.

“What Scioli would do in office is a mystery,” said Maria Fernandez, who owns a real estate company. “Will he take orders from Cristina or do something else?”

“I don’t want to find out,” added Fernandez, who was voting for Mauricio Macri, the lead opposition candidate.

Macri, the Buenos Aires mayor, presented himself as the candidate to put Argentina’s economy in order, promising to make a deal with the U.S. creditors and lift unpopular currency restrictions.

But Macri also has tailored his campaign to the millions who receive some form of government support. He promised to maintain popular programs for the poor and increase spending in some areas. Macri even went so far as to inaugurate a statue of Juan Peron, a three-time former president who founded the ideological movement to which Fernandez adheres.

Ramiro Blanco said she was voting for Scioli in large part because Fernandez picked him.

“I want to preserve everything we have achieved in these years,” said Blanco, a clothing store manager. “Macri would be a return to the past” conservative economic policies that many Argentines believe led to the 2001 collapse.

To win outright, a candidate needed 45 percent of the votes, or 40 percent and at least a 10-point advantage over the nearest competitor.

By Benedict Mander in Buenos Aires
October 26, 2015

Argentina’s presidential elections are set to continue to a run-off vote next month in a blow for the leftist government of President Cristina Fernández de Kirchner after a turnround in the fortunes of the opposition candidate, Mauricio Macri.

“What happened today changes the politics of this country,” Mr Macri, the centre-right mayor of Buenos Aires and former president of Boca Juniors football club told a crowd of euphoric supporters amid balloons and blaring music.

“It is today, it is here, it is now. Let’s go Argentina!” he bellowed, before breaking into a dance.

Mr Macri was almost neck-and-neck early on Monday morning with Daniel Scioli, Ms Fernández’s anointed successor, who billed himself as the continuity candidate. Mr Scioli was slightly ahead with 36 per cent of the vote while Mr Macri had 35 per cent, with 88 per cent of ballots counted.

Opinion polls had shown Mr Macri lagging behind Mr Scioli by about 10 percentage points — casting doubt on whether he would even be able to prevent the government-backed candidate from winning outright — analysts now say he has a good chance of removing the ruling Peronist party from power after 12 years.

Argentina’s unique electoral rules require the winner to receive more than 45 per cent of the vote to avoid a second round, or 40 per cent with a 10-point lead over the runner-up. With no candidate achieving these conditions, the vote will now go to a run-off on November 22.

The outcome will greatly depend on those who voted for Sergio Massa, a dissident Peronist, who came third with about 21 per cent. The former cabinet chief of Ms Fernández refrained from throwing his weight behind either candidate in a speech on Sunday night, although analysts expect the majority of his voters to back Mr Macri.

Although initial results were not published until after midnight, Mr Scioli appeared before supporters earlier in the evening to give a speech aimed at winning over undecided voters.

He played on concerns that Mr Macri would represent a return to the neoliberal policies that characterised Argentina in the 1990s, culminating in the 2001 economic crisis and what was then the biggest sovereign debt default in history.

“Changes have to go forwards, not backwards, and always include the most in need,” said a humbled Mr Scioli. “Argentines don’t want to go back to [macroeconomic] adjustments, devaluations and indebtedness. My commitment is to be a president who represents all Argentines, not just a few.”

With Argentines also voting for congressional deputies, senators and regional governors on Sunday, perhaps the biggest surprise of the night was the victory for the candidate for Mr Macri’s “Let’s Change” coalition in the province of Buenos Aires, by far the most populous in the country with about 37 per cent of the nation’s voters.

María Eugenia Vidal was leading with almost 40 per cent of the vote in what has traditionally been a Peronist stronghold owing to its large working-class population. The government’s candidate, Aníbal Fernández, who is the president’s cabinet chief but no relation to the president, was trailing with 35 per cent.

“Tonight we are making history,” Ms Vidal told ecstatic supporters. “We made the impossible possible. We changed resignation for hope, sadness for enthusiasm and joy, the past for the future.”

By Benedict Mander in Buenos Aires
October 25, 2015

Whoever wins Argentina’s presidential elections on Sunday will inherit an economy in dire straits. Restricted access to foreign currency has caused the country’s reserves to decline to dangerously low levels.

Most observers expect President Cristina Fernández de Kirchner to hand over power on December 10 without the economy suffering another big financial shock. But her successor may not be so lucky.

How bad is it?

Pretty bad. At the root of the problem is a ballooning fiscal deficit, now about 7-8 per cent of national output, which is being financed by printing money. It should be no surprise, therefore, that Argentina has one of the highest inflation rates in the world. It reached about 30 per cent last year but has since fallen thanks to stalled economic growth.

It does not help that Argentina cannot borrow abroad because of a continuing creditor dispute. Strict capital controls were introduced in 2011 that led to a massively overvalued official exchange rate — and a plummeting black market rate — while foreign reserves have been in steady decline ever since. Net reserves will end the year below $10bn. Few dispute that this situation is unsustainable.

What are the candidates going to do?

Faced with an economic time bomb, even Daniel Scioli, the government-backed candidate, has admitted that reforms are necessary — although he insists that any changes must be “gradual” and that there will be no “adjustment”. But he has been vague about what he will actually do, in part because he needs to toe the government line and thus keep Ms Fernández and her supporters on side until the elections.

Nevertheless, his economic advisers admit in private that it will be important to reach a swift deal with the “holdout” creditors so Argentina can access international finance to plug the deficit. That is all the more important for Mr Scioli because he says he will not remove capital controls quickly or devalue the currency, defending the central bank’s management of the exchange rate.

He pledges to bring inflation down to single-digits during his term and is emphatic about the importance of attracting foreign investment, hoping for some $30bn a year. He promises businesses that they will be “profitable” but he has been non-committal on what he would do about quotas and export taxes.

Chart – Argentina’s fiscal balance as % of GDP

And the other guy?

Mauricio Macri, the market darling, is billing himself as the turnround candidate, although he has attempted to assuage fears that he will implement “shock treatment”.

Nevertheless, committed to free and open markets, he wants to normalise Argentina’s economic relations with the rest of the world, especially in trade and finance, which also involves resolving the dispute with the holdout creditors.

Central to this idea is restoring credibility and independence to Argentina’s institutions, especially the judiciary, the central bank and the discredited statistics institute.

Mr Macri argues that there is plenty of room to bring down the fiscal deficit without an adjustment simply by making spending more efficient — although this would involve reviewing costly subsidies.
But he has pledged to remove capital controls immediately, and to let the currency float freely, which it is hoped will lead to big inward flows of investment. He would also ask Alejandro Vanoli, the central bank president, to resign.

To stimulate more investment, Mr Macri has also promised to abolish quotas and taxes on exports, although not entirely on soya exports, which are the most profitable. His advisers also reckon they can bring inflation down to 4 per cent in the first two years of his presidency.

Will these plans work?

The big difference between Mr Scioli and Mr Macri is the speed at which they would attack the economy’s problems. Most economists agree on the problems themselves, and what needs to be done about them.

But with Mr Scioli, the danger is that he will move too slowly, held back by those resistant to change and loyal to Ms Fernández, as well as his own fear of the political risks involved. If so, the market could end up forcing an adjustment on him.

With Mr Macri, on the other hand, there is a risk that he could move too fast — especially in removing capital controls, which may not automatically lead to it “raining dollars” as Mr Macri hopes.

By Melissa Gray and Catherine E. Shoichet, CNN
October 26, 2015

(CNN)The race to succeed Cristina Fernandez de Kirchner as Argentina’s president appeared headed for a runoff Monday, with her party’s candidate in a tight race with the outgoing mayor of Buenos Aires.

With nearly 80% of polling places counted, Daniel Scioli of Fernandez’s Front for Victory coalition and Mauricio Macri of the Let’s Change coalition each had 35.48%, according to official results.

In third place at 21.23% was Sergio Massa, who earlier Sunday said his coalition, United for a New Alternative, did not get the numbers it was hoping for and was not in the top two.

According to the constitution, to win the presidency a candidate must either win 45% of the vote or have an advantage of 10 percentage points over their closest rival.

If neither requirement is met, the top two candidates compete in a runoff, which would be held November 22.

Fernandez was elected in 2007, succeeding her husband, Nestor Kirchner, who served one term. He died of a heart attack five years ago this week.

She won re-election in 2011.

Both Massa and Scioli, whom Fernandez endorsed as her successor, anticipated being in a second round of voting.

“It is an irreversible trend at a national level: There is a second round in Argentina,” Sen. Ernesto Sanz said from the headquarters of Let’s Change before the results began coming in.

Asked about the possibility of a runoff, Alberto Samid, vice president of the Central Market and a close confidante of Scioli, told CNN: “If there is a second round, we will win twice.”

A major issue in the election is whether the new leader will end the country’s fight against New York hedge funds, an unresolved debt debacle that has shut out Argentina from much of the global economy while suffering from massive inflation, declining cash reserves and major economic growth.

By Hugh Bronstein and Richard Lough
October 26, 2015

Conservative opposition candidate Mauricio Macri stunned Argentina’s ruling party with an unexpectedly strong showing in the presidential election on Sunday, forcing a run-off vote next month, preliminary results showed.

Daniel Scioli, backed by outgoing leftist President Cristina Fernandez, had a big lead in pre-election opinion polls but the results on Sunday showed the two men in a tight race with everything to play for in the run-off.

With returns in from almost 97 percent of polling stations, Scioli had 36.8 percent support while Macri had 34.4 percent.

“What happened today will change politics in this country,” Macri, the pro-business mayor of Buenos Aires, told thousands of jubilant supporters inside his campaign headquarters.

Scioli could extend his lead as the last remaining votes come in but it was still a disappointing night for him and he looks vulnerable in the run-off election on Nov. 22.

The outcome of the election will shape how the South American country tackles its economic woes, including high inflation, a central bank running precariously low on dollars and a sovereign debt default.

Scioli is running on a platform of “gradual change” and has promised to maintain popular welfare programs while Macri advocates moving quickly to open up the economy.

Stung by Macri’s showing, Scioli launched an unusually blunt attack on his rival on Sunday night, saying he would want to scrap popular welfare policies like one that gives benefits to mothers for each of their children.

“We have two very different visions,” Scioli said.

The first-round results were met with stunned silence at Scioli’s headquarters, where supporters earlier celebrated what they expected to be a convincing lead or even outright victory.

“I would love to be able to tell you that we will able to come back in the second round, but I don’t know,” said one supporter.

To avoid a run-off, Scioli had needed 45 percent support on Sunday, or 40 percent with a 10 percentage point lead over his nearest rival. In the end, he fell far short.


“The polls were totally wrong. This is totally unexpected,” said political analyst Ignacio Labaqui. “An eventual Scioli victory, which was the consensus forecast, is clearly at stake.”

In a speech before thousands of party militants, Scioli reached out to swing voters for their support.

“United together we will triumph,” Scioli told voters in a rallying call. “I call upon the undecided and independent voters to join this cause.”

Scioli will seek to exploit a perception among many voters that Macri, the son of a construction magnate, would restore the kind of right-wing policies widely blamed for triggering a deep economic crisis in 2001-2002, when millions fell into poverty.

In third place on Sunday was moderate lawmaker Sergio Massa, a former Fernandez cabinet chief who split from her party in 2013. He won about 21.3 percent support and the race for his voters will start on Monday.

While some will find Macri’s shock therapy proposals hard to stomach, others believe Scioli will be unable or unwilling to end Fernandez’s divisive and populist policies.

Scioli, a former powerboat champion who is governor of Buenos Aires province, draws much of his support from poorer Argentines who credit Fernandez with strengthening Argentina’s social safety net.

Fernandez was barred by law from seeking a third consecutive term, but could return as a presidential candidate in 2019.

Macri has vowed to start dismantling her protectionist currency and trade controls on his first day in office if he wins. Fernandez will hand over to her successor on Dec. 10.

Macri is seen by Wall Street investors as the candidate most likely to negotiate with a group of “holdout” hedge funds whose suit over bonds defaulted on by Argentina in 2002 caused a new and ongoing default last year.

“It’s a shocking result and markets will likely react positively,” Alejo Costa of local investment bank Puente said of the first-round vote. “For U.S. dollar bonds, the market will reassign chances of a holdout resolution under a potential Macri administration.”

Partial results also suggested the ruling Front for Victory party lost clout in the lower chamber of Congress, making it less of an obstacle to a debt deal if Macri prevails in November.

In another damaging blow to the ruling party, Macri’s alliance won the gubernatorial election in Buenos Aires province, Argentina’s most populous, where Fernandez had hoped to install her cabinet chief Anibal Fernandez.

By Taos Turner
26 October 2015

BUENOS AIRES–Argentina’s ruling party presidential candidate, Daniel Scioli, suffered a setback in Sunday’s election as his adversary, the business-friendly mayor of Buenos Aires, was outperforming him in a first round of voting.

The unexpected showing of the center-right mayor, Mauricio Macri, took pollsters and the country’s political establishment by surprise. It also assured a runoff election on Nov. 22, the first in Argentine history.

Mr. Scioli, 58 years old and the governor of Buenos Aires Province, had a clear lead heading into the election with polls putting him on the cusp of a first-round win. But as results came in after midnight on Monday, more than six hours after polls had closed, Mr. Macri had almost 36% of the vote compared with about 35% for Mr. Scioli.

Mr. Scioli appeared likely to pull ahead as results from poor districts come in through the early morning hours, said Ernesto Calvo, a political science professor at the University of Maryland who has closely tracked the Argentine campaign.

But Mr. Scioli, a former world champion powerboat racer, had campaigned hard to win in the first round. His weaker-than-expected performance is a blow not only to his campaign but to President Cristina Kirchner and their ruling Peronist Victory Front coalition.

At stake are Mrs. Kirchner’s trademark policies, including heavy government spending to expand welfare programs, currency controls and import barriers that economists say have stalled the economy and spurred 25% annual inflation.

25 October 2015

BUENOS AIRES—The business-friendly mayor of Argentina’s bustling capital won enough votes in Sunday’s presidential election to trigger the first runoff in the country’s history, dealing a startling setback to the candidate backed by the ruling party.

The unexpectedly strong showing by Mauricio Macri, the center-right mayor of Buenos Aires, took pollsters and the country’s political establishment by surprise. It also assured a runoff election on Nov. 22.

Daniel Scioli, 58 years old and the governor of Buenos Aires Province, had a clear lead heading into the election with polls putting him on the cusp of a first-round win.

But as results came in early Monday, more than seven hours after polls had closed, Mr. Scioli had 35.6% of the vote compared with 35.4% for Mr. Macri. Almost 82% of the votes had been counted.

Mr. Scioli appeared likely to pull ahead as results from poor districts come in, said Ernesto Calvo, a political-science professor at the University of Maryland who has closely tracked the Argentine campaign.

But Mr. Scioli, a former world champion powerboat racer, had campaigned hard to win in the first round. His weaker-than-expected performance is a blow not only to his campaign but also to President Cristina Kirchner and their ruling Peronist Victory Front coalition.

At stake are Mrs. Kirchner’s trademark policies, including heavy government spending to expand welfare programs, currency controls and import barriers that economists say have stalled the economy and spurred 25% annual inflation.

“This result represents a shock, positioning Mr. Macri within reach of the presidency,” said Mr. Calvo.

The second round will signal the end of 12 years of rule by Mrs. Kirchner and her late husband, Né stor.

Whoever is elected will have to make tough choices to address a moribund economy and a rapidly rising budget deficit.

In a speech, Mr. Scioli asked for his followers to “keep accompanying us” and launched into the kind of sharp attack on Mr. Macri that veered from the largely civil discourse that had marked campaigning until now.

“It it were up to Macri, we wouldn’t have universal benefits for children, YPF, nor Aerolineas,” Mr. Scioli said, referring to social programs and the oil and airline industries Ms. Kirchner nationalized.

Mr. Scioli added, in comments widely interpreted here as an opening salvo to a new campaign ahead of the second round, that there were “two very different visions about the present and future of Argentina are at play. Our priorities are the poor, the workers and the middle class.”

Mr. Macri, in a lively speech before overjoyed supporters, celebrated early results that seemed to show his campaign was still alive. “What happened today changes the politics of this country,” he said.

Mr. Macri’s Republican Proposal Party, or Pro, was also close to winning the governorship of the Buenos Aires province after 28 years of uninterrupted rule by the Peronists.

Despite the setback for the Victory Front, Mrs. Kirchner is leaving office on Dec. 10 with a 42% approval rating, according to the polling firm Management & Fit, the highest of any departing president in modern Argentine history. She is constitutionally barred from seeking a third consecutive term.

A win for Mr. Macri would significantly alter Argentina’s political landscape and mark the emergence of a new and competitive political coalition led by the Pro. In interviews inside and outside Buenos Aires, some voters said they were ready for a change.

“It’s become too hard to live in Argentina,” said Liliana Levy, 48, a systems analyst who voted for Mr. Macri. She says half of her salary goes to paying rent and that she struggles to care for her elderly mother. Mr. Macri’s background as a businessman appealed to her and she says he was a good mayor.

By Charles Newbery
26 October 2015

Buenos Aires (Platts)–26Oct2015/1210 am EDT/410 GMT Argentina’s presidential election Sunday likely will go to a November runoff against the two leading candidates, in a race widely watched by the oil industry for signs of improvement in policies and investment conditions.

Buenos Aires Mayor Mauricio Macri took 36% of the votes for Cambiemos, a coalition of more conservative parties, according to a count of 70% of the ballots by the National Electoral Board.

The first official results were released just past midnight local time (0300 GMT Monday), more than six hours after voting ended.

The results put Macri ahead of Buenos Aires Governor Daniel Scioli, who took 35% for Front for Victory, a populist left-of-center party that has been in power since 2003, according to the preliminary results.

Sergio Massa, a left-of-center congressman, trailed in third with 21%, while the other three candidates were far behind.

If the results hold at these percentages, Scioli and Macri will go to a November 22 runoff. To avoid a runoff, a candidate needs 45% of the votes or at least 40% plus a 10-percentage-point lead on second place, according to election rules.

This shifts attention to which candidate will pick up the losing candidates’ supporters. Ahead of Sunday’s election, analysts said a possible scenario would be that those who voted against Scioli would cast their ballots for Macri in the runoff.

However, there is potential for Massa’s voters siding with Scioli, as both men are part of Peronism, a nationalist political movement that has dominated since the 1940s.


Either way, the winner is expected to take office December 10 and work to rebuild energy supplies.

Macri has taken on as an energy adviser Juan Jose Aranguren, a former president of Shell Argentina, a leading upstream and downstream player.

Scioli already has been taking steps to plan for the energy rebuild if he becomes president. He has vowed to keep domestic oil prices at between $63/b and $77/b even if international prices are lower, as they are now at about $48/b.

He also has promised to implement a program to boost natural gas production, offering to pay a $5/MMBtu subsidy on top of the average gas price in 2014 to producers who increase output. The average for state-run YPF, the country’s biggest gas producer, was $4.29/MMBtu in 2014, meaning that the incentive could be more than a current program for paying $7.50/MMBtu for output from new developments.

Argentina has huge oil and gas resources in largely untapped shale and tight plays, as well as potential for offshore finds. This has attracted the attention of Chevron, ExxonMobil, Shell, Total and other companies to drill for the resources, targeting at first the Vaca Muerta shale play.

The first development of the play by YPF and Chevron has helped to stabilize national oil production and boost that of gas after a decade of decline.

Argentina produced an average of 532,000 b/d of oil in the first eight months of this year and 117.3 million cu m/d of gas, according to the Argentine Oil and Gas Institute, an industry group.

Jonathan Gilbert
25 October 2015

In 2001, Enrique Guastavino’s business renting pedal boats on a lake here was at a breaking point. “I didn’t have enough money to pay my staff,” he says. Today, however, the business is thriving and Mr. Guastavino says the government is to thank.

In recent years, President Cristina Fernandez de Kirchner has faced scandals, street protests, and apocalyptic news coverage, and many observers abroad believed her party was on its way out. Mrs. Kirchner has presided over economic tumult, including a currency devaluation last year. Import restrictions have hindered domestic manufacturers and global prices of soy, Argentina’s biggest export, have crashed. Economic growth has slowed sharply since 2011.

Nevertheless, Kirchner’s leftist Front for Victory party seems well positioned to win a fourth consecutive term in elections on Sunday. This resilience reflects strong approval in several sectors of how the party has governed Argentina over the past 12 years. Analysts say the “main street” economy appears healthy – and voters like Guastavino are content. Unemployment, for instance, is around 7 percent and policymakers have hiked wages for influential trade union workers, even as inflation nears 28 percent. This is far from the chaos of 2001-2002, when economic turbulence plunged millions into poverty, and hyperinflation a decade earlier.

“I can’t complain about her government,” says Angelica Laplume, a security guard, noting the improvements under Kirchner. “There’s work for who wants it, the restaurants are full, people go on vacation.”

‘Sharp change’?Kirchner cannot run for a third consecutive term in Sunday’s elections, so the Front for Victory’s candidate is Daniel Scioli, a state governor. Polls give him a big lead over his center-right rival, Mauricio Macri, of the Cambiemos or “Let’s change” alliance. But it is unclear whether Mr. Scioli will win enough votes to avoid a run-off next month.

Scioli, a former powerboat racer, is promising to take the reins of Kirchner’s broader political project. This includes her focus on reducing the equality gap, which she has tackled in part by expanding social benefits, a cornerstone policy that is supported by many Argentines.

Sixty-two percent of Argentines want some form of continuity, according to research released by Management and Fit, a local polling firm. This has forced Mr. Macri to modify his campaign in order to appeal to these voters. He’s promised to keep social benefits, like child welfare, and to safeguard nationalized companies. As a result, the difference between Kirchner’s party and its competitors is much less noticeable.

“At the beginning of the campaign the talk was about sharp change, but it wasn’t resonating much and Macri shifted towards Scioli,” says Louisa Richey, a senior risk analyst at the Cefeidas Group in Buenos Aires.

Continuity with changeStill, there are many who prefer change. They have grown weary, for instance, of Kirchner’s imperious style and argue that her protectionist economic policies and nationalist rhetoric have isolated Argentina from the world.

In turn, Mr Scioli has also reached out to these voters, offering — as he did on a popular TV show this week — to implement “continuity with change.”

“We can’t say that the mandate is either change or continuity,” says Raul G. Aragon, a pollster and political commentator here. “It’s not a dichotomy; it’s more nuanced and Scioli is the best representative of it.”

On the streets of Buenos Aires, this nuance was reflected among voters. “It would be a good change,” says Luis Addesi, who runs a convenience store, of Scioli’s candidacy. “We would have continuity but he’s going to bring in his own politics, too.”

Changes would include a more consensual style of leadership, according to Scioli’s advisers, and moves to correct economic distortions, like the inflation rate, a high budget deficit, and low reserves of hard currency. These would require moves to which Kirchner has previously been averse, like negotiating with hedge funds in New York and easing electricity and gas subsidies, economists say.

Still, there are many Argentines that believe change isn’t possible under Kirchner’s party, which is part of a larger political movement that has dominated Argentina for decades.

“They seem very corrupt,” says Lidya Bruzzese, a housewife who is ditching Front for Victory to vote for Macri. “And also very authoritarian. I don’t see the progress.”

In the gritty conurbation that encloses Buenos Aires where Kirchner’s party is strong, Macri is gaining ground. “I’m tired of 30 years of the same; I want something else,” says Reinaldo Capparelli, the owner of a plant store.

But even staunch supporters of Macri pointed to the value of preserving some of Kirchner’s policies. “Macri has to keep the social benefits,” says Christian Afalo, a blacksmith. “If he doesn’t, the whole world could fall in on him.”

President Kirchner has presided over a slowing economy and a rocky relationship with foreign creditors. But her party’s candidate for president is in the lead ahead of Sunday’s poll.

By Andres D’Alessandro and Chris Kraul
25 October 2015

Despite Argentina’s slumping economy, rising crime rates and spiraling inflation, an ally of outgoing President Cristina Fernandez is the heavy favorite to place first in Sunday’s
presidential election, a reflection of the popularity of her populist social programs and human rights record.

The question is whether Buenos Aires state Gov. Daniel Scioli will tally enough votes to win the election outright against his two main opponents, Buenos Aires city Mayor Mauricio Macri and Congressman Sergio Massa.

To do so, Scioli must win at least 45 percent of the votes, or garner 40 percent and outdistance his nearest opponent by a margin of at least 10 percentage points.

Recent polls show Scioli with between 38 percent and 41 percent support, Macri between 29 percent and 32 percent and Massa between 20 percent and 23 percent.

In any scenario, the election means the end of 12 years of Kirchnerismo, which critics call a somewhat authoritarian variation of the socialist politics that have long dominated in Argentina.

The late Nestor Kirchner held the top job from 2003 to 2007, and was succeeded in office by Fernandez, his wife, whose second four-year term ends Dec. 10.

She will leave an economy suffering from 28 percent inflation and stagnant growth after a miserable 2014 in which total economic output shrank 2 percent.

The slowdown’s effects have been masked by a burst in election-year public spending that will create a large government deficit this year, a mess her successor will have to clean up, said economist Cynthia Moskovits of the FIEL think tank in Buenos Aires.

But Scioli, the Victory Front party candidate and the president’s choice to succeed her, will benefit from the solid support she enjoys among young and lower-middle-class voters. They approve of her wealth redistribution efforts and subsidies of public transit and utilities prices, as well as her determined prosecution of those culpable for deaths, kidnappings and torture of thousands of victims during the military dictatorship from 1976 to 1983.

Many Argentines credit Kirchner and Fernandez with rescuing the country from political and economic chaos that followed a bond default and devaluation in 2001.

Violent protests in that era resulted in 32 deaths. The country saw five presidents take office from late 2000 through 2001.

The Kirchners’ social programs included expanded pension coverage, elderly care and education subsidies. The programs were financed partly by higher tax and duty revenue produced by the global commodities boom that saw skyrocketing prices and demand for Argentine wheat, soy and beef.

The Kirchners’ policies reduced the poverty rate from 57 percent in 2002 to 25 percent in 2014. Their massive boost in public sector hiring helped lower unemployment rate from 21 percent in 2002 to the current 5 percent.

“People see her policies as benefiting those in need,” said Columbia University political science professor Maria Victoria Murillo. “Her popularity is more than 40 percent, which is not minor given the economy that’s not so good and the fact she has been around for eight years.”

Other actions taken by Fernandez have been less popular, including the nationalization of public services, an airline and the biggest oil company.

She is also criticized for a perceived hostility toward the media and her refusal to settle the dispute with “holdout” bondholders dating back to the 2001 default. That failure has hurt Argentina’s access to the global financial markets, Moskovits said.

Many have also decried what they see as Fernandez trying to perpetuate her hold on power, like socialist heads of state in Bolivia, Ecuador, Nicaragua and Venezuela in recent years.

But her plan to run for a third term was frustrated by reversals in the 2013 legislative elections that ended any chance of a needed constitutional reform.

For those reasons, even Scioli has tried to put some distance between himself and his patron, saying that, if elected, he would name ministers who oppose some of Fernandez’s policies.

He has also said that he would settle the bondholder dispute once and for all, and that he would take a tougher approach to rising crime.

By Simon Romero and Jonathan Gilbert
25 October 2015

BUENOS AIRES — Her party’s candidate is widely seen as the front-runner. One of her closest aides is his running mate. Her son and her economy minister are running for Congress, too. And if they don’t win, a new law prevents whoever replaces her from undoing one of her signature economic policies.

Argentines go to the polls on Sunday to pick their next president, officially marking the end of an era. For the last 12 years, the presidency has been shared by one couple — Cristina Fernández de Kirchner and her late husband, Néstor Kirchner — whose influence on the country has been so sweeping that they have their own political movement: Kirchnerismo.

But while Mrs. Kirchner, 62, is constitutionally barred from seeking a third consecutive term, she is not going quietly. After emerging as one of Argentina’s strongest leaders in decades, she has sought to assert her lasting sway with a range of calculated moves in recent months.

Daniel Scioli, the candidate endorsed by Mrs. Kirchner, speaks about a continuity with her policies, while suggesting a few important tweaks, like improving strained ties with the United States and Argentina’s creditors.

Adding to the message that her course will be maintained, Carlos Zannini, her legal secretary, who is believed to be one of her closest advisers, was picked to be Mr. Scioli’s vice-presidential running mate.

Mrs. Kirchner also pushed through a new law that would require congressional approval to sell state-owned stakes in companies, chiefly a portfolio acquired when she nationalized pension funds in 2008.

Axel Kicillof, her economy minister, said the measure would ensure that any effort to privatize such holdings in the future would not be a ”unilateral decision by the executive branch,” making it much harder to undo some of her most contentious decisions. Mrs. Kirchner herself proudly said that ”nobody’s pen will now be enough” to dilute the role of the state.

Mrs. Kirchner, who has often been underestimated by her opponents, has also moved to place supporters in important positions in the central bank and across the judiciary. Beyond that, her son, Máximo Kirchner, and Mr. Kicillof, a rising star in her administration, are also running for Congress.

People in her government contend that her influence is here to stay.

With his three-day beard, abhorrence for neckties and an office stacked high with tomes on political philosophy, Ricardo Forster fits right into the high echelons of Mrs. Kirchner’s leftist government. He even has the lofty job title to prove it: secretary for strategic coordination of national thought.

”Conflict is the energy of democracy,” Mr. Forster, a 58-year-old professor of philosophy, said in an interview. He defended Mrs. Kirchner’s combative governing style while listing the highlights of the Kirchner presidencies, including the broad expansion of antipoverty programs, and the nationalization of pension funds and the country’s largest oil company.

Some might brush off Mrs. Kirchner’s recent maneuvering as a last grasp for clout, but her popularity at the end of her second contentious term is relatively strong. With Argentina’s economy posting modest growth this year, avoiding catastrophic predictions, her approval ratings are around 42 percent, well above those of Brazil’s president, Dilma Rousseff, and Chile’s president, Michelle Bachelet, both of whom are battling corruption scandals and economic slowdowns.

”I take my hat off to her,” said Silvia Ribé, 45, an actor who was drinking coffee with friends at Gargantúa, a bar and community theater here. ”She didn’t care about losing favor abroad. She was determined to cut ties with the international system,” she added, referring to Mrs. Kirchner’s battles with the International Monetary Fund and a group of creditors in New York.

”There’s something hazy about the figure of Scioli,” Ms. Ribé continued, explaining that she was concerned he could veer too far from Mrs. Kirchner’s leftist path. ”He might sink us into the mud,” she said. ”We don’t know if Cristina is going to put a revolver against his head so that he does everything to the letter.”

Mr. Scioli, 58, a former powerboat racer who lost his right arm when his boat flipped in 1989, switched to politics in the 1990s. He won a seat in Congress as a supporter of Carlos Menem, a former president from a conservative wing of Peronism, the ideologically malleable movement that dominates Argentine politics four decades after the death of the three-time leader Juan Domingo Perón.

But not everything is lined up for the continued influence of Mrs. Kirchner, who succeeded her husband as president in 2007 and was re-elected in 2011. While her own leftist movement, Kirchnerismo, has emerged as the dominant faction within Peronism, political analysts question whether that will remain the case after she leaves office.

Mr. Scioli served as Nestor Kirchner’s vice president from 2003 to 2007, but as governor of Buenos Aires Province he has sometimes been at odds with Mrs. Kirchner and her supporters, who have viewed him as too close to corporate interests.

”His conflict with Cristina is inevitable,” said Rosendo Fraga, an Argentine political analyst, reflecting a preference here for using Mrs. Kirchner’s first name. He noted the expectation that she could try to run for president again in 2019, an ambition that could put her on a collision course with Mr. Scioli.

Mrs. Kirchner herself seems to be welcoming talk about a possible return. She recently met with the author of a line of graffiti, ”Embrace me until Cristina returns,” images of which have been widely shared on social networks.

In a well-polished video on her Facebook page, Mrs. Kirchner is shown defiantly celebrating her policies. Mr. Scioli makes an appearance, too, as if reminding him and the electorate of who paved the way for his candidacy.

”If Scioli wins,” Mr. Fraga said, ”this will be the most important political conflict of the next period, something that is already being insinuated.”

Looking forward to the end of a long stretch in which Mrs. Kirchner relished clashing with opponents in the news media and the business establishment, some Argentines cannot wait for the president and her polarizing style of governing to leave office.

”It’s the best thing that could happen to us,” said Juan Addesi, 52, a watch repairman. Mr. Addesi, who plans to vote for Nicolás del Caño, a socialist, said he was angry that his business had been hindered by import restrictions that make it difficult to obtain spare parts. ”I could be 10 times better off,” he said.

Others question how Mrs. Kirchner, whose personal wealth has grown over the past decade, according to her sworn declarations, will handle claims of corruption once she leaves office.

She is under investigation over accusations that a family hotel business in Patagonia was used to launder money. A businessman with close ties to the Kirchners has been accused of paying for block reservations through his companies, but the rooms appeared to have never been occupied. Mrs. Kirchner’s chief of staff said the investigation had become a defamation campaign against her.

Claudio Bonadio, a judge leading the case, was removed from the inquiry this year after he ordered several raids on offices of the hotel business. Judge Daniel Rafecas, his replacement, is widely viewed as partial to the government. In 2012, he was removed from a corruption case involving the vice president, Amado Boudou, after sending WhatsApp messages advising Mr. Boudou’s lawyer. One of Mrs. Kirchner’s opponents warned this week that the inquiry into the hotel business could be shelved, an expectation echoed by others.

Still, Mrs. Kirchner is trying to project her sway beyond the elections, which could go to a second round if no candidate wins outright on Sunday.

”It’s the last kiss of power for her,” said Federico Finchelstein, an Argentine historian at the New School for Social Research in New York, noting that Mrs. Kirchner had held a teleconference recently with President Vladimir V. Putin of Russia, emphasizing plans to forge closer ”strategic” ties between the two countries.

”She’s trying to assert the foreign policy of the next administration,” Mr. Finchelstein said. ”But if history prevails, there will be an exodus to the new president. After all, he’s the one who controls the purse strings and effectively signs the checks from the executive branch.”

Mrs. Kirchner’s supporters say that much depends on the paths pursued by the president and her successor.

”She’s not going to interfere in any decision that Scioli takes,” said Mr. Forster, the secretary of national thought. Then he qualified that statement, adding, ”unless there’s a dramatic shift in what this political project has consisted of until now.”

By Jonathan Gilbert
24 October 2015

BUENOS AIRES — Some voters received sacks stuffed with bottles of cooking oil, pasta and flour. Others were ferried to the polls in convoys of cars. There were even reports of a raffle in which the grand prize was a Chevrolet.

In return, the voters promised to cast their ballots for particular candidates during recent municipal elections in Tucumán, in the north of Argentina. The rampant vote buying was branded a ”scourge” last month by judges looking into the validity of the polls, although the results were allowed to stand since the practice, which experts say is widespread in Argentina, is not actually illegal.

The vote buying, documented by election observers from the National University of La Plata and highlighted in the news media, has ignited debates about the frailty of the country’s democracy as it prepares for presidential and parliamentary elections on Sunday.

”The problem is poverty and that there are people willing to lose their voting freedom for a bag of food,” Margarita Stolbizer, a candidate for the Progressive Front, said in an interview with the newspaper Perfil.

Vote buying strategies will probably sway 5 to 12 percent of Argentine voters on Sunday, according to estimates by Rodrigo Zarazaga, the director of the Center for Research and Social Action, a Jesuit institute. Mr. Zarazaga is an expert on clientelism, the term used when politicians turn the electorate into clients over a long period of time, offering services and goods in exchange for support, a common practice in the region that has been closely scrutinized here in recent weeks.

Many voters fear that such practices could skew the results of the national elections. ”They won’t vote according to their convictions,” said Héctor del Bianco, 61, who works at a car showroom. ”They’ll vote because of the money.”

In Tucumán, while all parties engaged in vote buying, the majority was attributed to the Front for Victory, an arm of the Peronist political movement that has dominated Argentine politics for decades, and which is led by President Cristina Fernández de Kirchner. The party has been in power since 2003, and is well placed to secure a fourth consecutive term in Sunday’s elections, led by Mrs. Kirchner’s successor, Daniel Scioli.

Some party officials conceded that there was vote buying in Tucumán, where the party’s candidate for governor, Juan Luis Manzur, won easily.

But Mr. Scioli, the governor of Buenos Aires Province, denounced the opposition’s efforts to annul his victory. ”It’s the impotence of the opposition,” he told reporters. ”They didn’t get the result they hoped for, so they looked to delegitimize the elections.”

Under Mrs. Kirchner, supporters say, the Front for Victory has modernized Argentina’s democracy, which is enjoying its longest unbroken run — 32 years — since a suffrage law was passed a century ago. They underscore Mrs. Kirchner’s liberal social agenda and her expansion of welfare benefits. She has also pushed for the prosecutions of former military leaders on human rights crimes charges and moved to restrict the size of news media empires.

But this progress has been undermined by a resilient culture of vote buying that is most rife within the Peronist movement, according to experts, explaining that clientelism has long been practiced by Argentina’s incumbent parties.

”If you’re buying the votes of the poor, you are silencing their preferences, and that is tragic,” said Mariela Szwarcberg, a politics professor at Reed College in Portland, Ore.

Evidence of vote buying in Tucumán includes a video posted online of two men who were candidates for a town council. They had filmed themselves driving to the town, Tafí Viejo, to hand out packs of herbal tea. ”Let’s make a trade,” says one, before adding, ”Vote for me.”

The men, who later claimed they had been joking, were candidates for Kolina, an organization that is part of the Front for Victory’s grass-roots support network.

Sacks containing staples like flour, cooking oil and sugar, worth a total of $15 to $20, were systematically distributed by several parties to voters statewide, said Sebastián López Calendino, one of the election observers.

Other practices condemned by the judges were the use of convoys, reported by election observers, to transport voters to polling places and raffles organized in the days before the elections.

One Front for Victory official raffled off a Chevrolet hatchback car, according to the local news media.

There is no provision in Argentina’s electoral code that explicitly criminalizes vote buying. Julia Pomares, a specialist on election issues and director at Cippec, an Argentine public policy research center, noted that the validity of the elections in Tucumán was challenged on constitutional grounds. Because polling booths ensure secrecy, the judges decided, vote buying does not actually suppress the constitutional right to freely choose candidates.

Politicians often use networks of go-betweens, known as ”punteros,” to whom they give public funds and resources. They supply poor voters with basic items, like food, medicine and construction materials, experts say.

Often, these campaign workers — who were the subject of a fictional hit TV series in 2011 called ”The Puntero” — also hand out welfare benefits and jobs.

In Argentina, the punteros are largely concentrated in the sprawling outskirts of Buenos Aires, the capital city that is home to nearly a third of the country. In these outlying neighborhoods, Peronists have the most extensive networks, Mr. Zarazaga said. But other parties, like Republican Proposal, led by Mauricio Macri, the mayor of Buenos Aires and Mr. Scioli’s chief rival in the elections, also rely on punteros.

”It’s a historic and commonplace practice; Peronism gets stigmatized, but there’s no party that hasn’t used it,” said Mario Gómez, 58, who works at a cultural center in Villa 21-24, a slum on the city’s south side.

”People are used to it,” said Yessica Ibáñez, 32, a self-described ”full-time mom” from Villa 21-24, explaining how friends and family had been offered jobs as janitors, or goods like mattresses and corrugated iron, a useful roofing material. ”If you ask for somebody’s vote, they ask you what you’re offering in exchange.”

Experts say that the punteros are often allowed to administer access to some of the welfare benefits and social programs expanded by the Front for Victory. Some argue that by doing this they are performing a vital role, spanning the gap between the state and marginalized corners of the country that policy makers might ignore.

”People don’t get the social ambivalence,” said Javier Auyero, a sociology professor at the University of Texas at Austin who researched clientelism here in the 1990s when, he said, it surged under a Peronist government. ”It’s a strategy of control, but it’s also how poor people solve their most pressing needs,” he added.

But Sergio Massa, a congressman who is third in the polls, has promised to ”sweep away the go-betweens who extort people with welfare benefits.”

”That breaks the circle of clientelism,” he told reporters.

By Andres D’Alessandro, Chris Kraul
24 October 2015

Despite Argentina’s slumping economy, rising crime rates and spiraling inflation, an ally of outgoing President Cristina Fernandez de Kirchner is the heavy favorite to place first in Sunday’s presidential election, a reflection of the popularity of her populist social programs and human rights record.

The question is whether Buenos Aires state Gov. Daniel Scioli will tally enough votes to win the election outright against his two main opponents, Buenos Aires city Mayor Mauricio Macri and Congressman Sergio Massa.

To do so, Scioli must win at least 45% of the votes, or garner 40% and outdistance his nearest opponent by a margin of at least 10 percentage points. Recent polls show Scioli with between 38% and 41% support, Macri between 29% and 32% and Massa between 20% and 23%.

In any scenario, the election means the end of 12 years of Kirchnerismo, which critics call a somewhat authoritarian variation of the socialist politics that have long dominated in Argentina. The late Nestor Kirchner held the top job from 2003 to 2007, and was succeeded in office by Fernandez, his wife, whose second four-year term ends Dec. 10.

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She will leave an economy suffering from 28% inflation and stagnant growth after a miserable 2014 in which total economic output shrank 2%. The slowdown’s effects have been masked by a burst in election-year public spending that will create a large government deficit this year, a mess her successor will have to clean up, said economist Cynthia Moskovits of the FIEL think tank in Buenos Aires.

But Scioli, the Victory Front party candidate and the president’s choice to succeed her, will benefit from the solid support she enjoys among young and lower-middle-class voters. They approve of her wealth redistribution efforts and subsidies of public transit and utilities prices, as well as her determined prosecution of those culpable for deaths, kidnappings and torture of thousands of victims during the military dictatorship from 1976 to 1983.

Many Argentines credit Kirchner and Fernandez with rescuing the country from political and economic chaos that followed a bond default and devaluation in 2001. Violent protests in that era resulted in 32 deaths. The country saw five presidents take office from late 2000 through 2001.

The Kirchners’ social programs included expanded pension coverage, elderly care and education subsidies. The programs were financed partly by higher tax and duty revenue produced by the global commodities boom that saw skyrocketing prices and demand for Argentine wheat, soy and beef.

The Kirchners’ policies reduced the poverty rate from 57% in 2002 to 25% in 2014. Their massive boost in public sector hiring helped lower unemployment rate from 21% in 2002 to the current 5%.

“People see her policies as benefiting those in need,” said Columbia University political science professor Maria Victoria Murillo. “Her popularity is more than 40%, which is not minor given the economy that’s not so good and the fact she has been around for eight years.”

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Other actions taken by Fernandez have been less popular, including the nationalization of public services, an airline and the biggest oil company. She is also criticized for a perceived hostility toward the media and her refusal to settle the dispute with “holdout” bondholders dating back to the 2001 default. That failure has hurt Argentina’s access to the global financial markets, Moskovits said.

Many have also decried what they see as Fernandez trying to perpetuate her hold on power, like socialist heads of state in Bolivia, Ecuador, Nicaragua and Venezuela in recent years. But her plan to run for a third term was frustrated by reversals in the 2013 legislative elections that ended any chance of a needed constitutional reform.

For those reasons, even Scioli has tried to put some distance between himself and his patron, saying that, if elected, he would name ministers who oppose some of Fernandez’s policies. He has also said that he would settle the bondholder dispute once and for all, and that he would take a tougher approach to rising crime.

“Scioli has developed an ambiguous campaign with some definite differences with respect to Fernandez,” said political analyst Sergio Berensztein.

Cecilia Mosto, an analyst with the CIO public opinion consultants, said Scioli has successfully played both sides of the political fence.

“His campaign is oriented toward an alliance with the government while differentiating himself from an economic model that shows signs of exhaustion and of deteriorating institutional integrity, including corruption,” Mosto said. “This double game has given him an advantage against his opponents.”

Vilma Farias, 60, a domestic worker in Buenos Aires and longtime Fernandez supporter, said she will reluctantly vote for Scioli.

“I have my doubts about voting for him because I think we have to improve on things that [Fernandez] hasn’t done well, especially in the last few years,” Farias said. “But I think [Scioli] will be different from Cristina. I certainly hope so.”

Prior to his election as governor, Scioli, 58, also served as vice president under Kirchner, congressman and national secretary of sports and tourism. Before entering politics, he was an internationally known racer of high-speed boats. He lost an arm in a racing accident in 1989.

By John Otis
24 October 2015

As Argentines prepare to vote Sunday, powerful clan appears to be losing its cachet even in its hometown

RÍO GALLEGOS, Argentina—From the main drag to the graveyard of this windswept Patagonian outpost, the imprint of Argentina’s first family is everywhere.

Walls are decorated with graffiti lauding President Cristina Kirchner. Her late husband and predecessor, Néstor Kirchner, has an avenue named after him, and his remains lie in a mausoleum with an eternal flame partly inspired by Napoleon’s tomb. Staring down from campaign billboards are the faces of their son, Máximo Kirchner, and Alicia Kirchner, the president’s sister-in-law.

“Since 1987 there has always been a Kirchner on the ballot,” said Javier Bielle, a former legislator here in Santa Cruz province, the base of the Kirchner family’s political dynasty. This sparsely populated expanse of glaciers and oil fields in Argentina’s deep south is to the Kirchners, he said, “what Arkansas was for Bill and Hillary Clinton.”

Yet even here, the Kirchner juggernaut that has controlled the presidency over 12 years appears to be losing momentum as Argentines prepare to cast ballots in Sunday’s general elections.

Cristina Kirchner, 62 years old, is constitutionally barred from a third consecutive term but she could run again in 2019, and her 41.7% job-approval rating is higher than that of several other South American presidents. In speeches, Mrs. Kirchner has called on her handpicked successor and current presidential front-runner, Daniel Scioli, to stay true to her populist economic policies that have included company takeovers and currency controls.

Mr. Scioli has sent strong signals that if he wins, he will chart a more centrist economic course to combat rising poverty, 25% inflation, and dwindling foreign reserves. His advisers have hinted he would negotiate with U.S. hedge-funds Mrs. Kirchner has denounced as “vultures” after they held out from a settlement of Argentine sovereign debt.

The president hopes to retain her redoubt in Río Gallegos, the capital of Santa Cruz, 1,500 miles from Buenos Aires. It was here in 1987 that “Kirchnerismo” began when her husband was elected mayor. He became governor of Santa Cruz in 1991.

Now the president’s son, Máximo, is running for one of the province’s two seats to Argentina’s lower house. Until recently, the reticent 38-year-old shunned the spotlight and preferred sleepy Río Gallegos to cosmopolitan Buenos Aires. He is under investigation for alleged money-laundering linked to the Kirchner family’s hotel business in Patagonia, and his critics point out that serving in congress would provide immunity from prosecution. He couldn’t be reached for comment. The family has denied any crime was committed.

Alicia Kirchner, who is Néstor Kirchner’s sister and the Minister of Social Protection, is in a tight race for Santa Cruz governor against incumbent Daniel Peralta and opposition candidate Eduardo Costa, who is leading in the polls.

“If she loses Santa Cruz, it would be a blow to the heart of the Kirchner movement,” said Mr. Costa.

To fend off that outcome, Cristina Kirchner has traveled to Santa Cruz three times this month for appearances with her son and sister-in-law. One was a ribbon-cutting ceremony for a public swimming pool in Río Gallegos, an event Argentine television stations were ordered to broadcast live.

Pre-empting TV programming for official announcements is supposed to be reserved for “grave” or “exceptional” events, such as a coup d’état or weather emergency. But Fernando Torrillate, a spokesman for the government’s TV regulator, insisted the swimming pool’s inauguration met the “exceptional” standard.

In her speech, Cristina Kirchner recalled how her late husband never learned more than the dog paddle because the town lacked a public pool. Like other projects Mrs. Kirchner has rushed to inaugurate ahead of Sunday’s vote, the swimming pool isn’t yet finished. As construction workers with hammers and power saws worked at the pool site a few days after Mrs. Kirchner’s visit, Néstor Turri, who lives across the street, shook his head. “Cristina is a demagogue,” he said.

Calls to the presidency seeking comment weren’t returned.

What critics consider the Kirchners’ authoritarian political style was honed in Santa Cruz in the 1990s. As governor, Néstor Kirchner pushed lawmakers to change electoral rules so he could serve three terms and pressured the media for favorable coverage, said Milagros Pierini, a local human rights activist.

More than half of Santa Cruz’s workforce are government employees. “Here, the government is also your supervisor, your boss,” said Pablo Manuel, an editor at TiempoSur, a Río Gallegos newspaper.

Home to major petroleum and natural-gas deposits but just 350,000 people, Santa Cruz has long boasted the highest per-capita budget of any Argentine province. Mr. Kirchner used it to build schools and pave roads connecting far-flung oil towns, Atlantic ports and tourist resorts flanked by massive glaciers.

A tireless campaigner, he seemed to know everybody’s name. “Even as president, Néstor would call down here to ask about some old woman to find out how she was doing and to make sure we were taking care of her,” said Juan Carlos Batarev, a local Peronist official.

Mr. Kirchner was succeeded by his wife in 2007 and then died of a heart attack three years later. Since then, Santa Cruz has been rocked with corruption scandals, some involving real estate deals in which the Kirchners were allegedly implicated.

During a 150-day strike by municipal workers this year, trash piled up in Río Gallegos before being blown into surrounding pastures by the fierce Patagonian wind. The outskirts of town now look like a dump, prompting some residents to say it is time to change course.

But at the swimming pool event, where she shared the stage with candidates Alicia and Máximo Kirchner, Mrs. Kirchner implored voters to extend the family legacy.

“Our political project isn’t about last names,” she said. “It’s about Argentina.”

By Taos Turner
24 October 2015

BUENOS AIRES — After years of rampant government spending and rigid currency controls, Argentina is so short on dollars that whoever wins Sunday’s presidential election will have to pursue unpopular policies to keep the economy afloat.

Mired in a toxic mix of economic stagnation and one of the world’s highest inflation rates, Argentines have been ditching their pesos and seeking safety in the greenback. That puts them in competition with a government that is itself scrambling to retain and obtain dollars to make debt payments and pay for imports.

The incoming president, who takes office Dec. 10, will need to stanch the bleeding of the central bank’s foreign-currency reserves, which have fallen by almost half since 2011 to $27 billion.

“Life is not going to be easy for the next government,” said former Finance Minister Jose Luis Machinea.

The growing demand for greenbacks means the central bank is losing about $2 billion a month.

Around $11 billion in reserves are on short-term loan from China. An additional $3 billion is owed to bondholders and $8 billion are deposits from the local financial system. Meanwhile, importers say the bank owes them around $9 billion for goods that have been brought into the country.

Those claims could the bank’s holdings dangerously depleted. “By December that number will be around zero,” said Juan Luis Bour, chief economist at Argentine research firm FIEL.

A central-bank spokesman declined to comment.

In Argentine “caves,” as the black-market exchange houses are commonly called, the peso has weakened to 16 to the dollar, while the official rate has remained at 9.5 pesos. Departing President Cristina Kirchner has kept the official rate stable to contain inflation, estimated to reach 25% this year, but the policy has reduced competitiveness for exporters.

As the global commodities bust has spread, a recession in Brazil has compounded Argentina’s troubles. Brazil’s currency has weakened by about 32% this year, making it harder for Brazilians to buy Argentine exports.

The three leading candidates to succeed Mrs. Kirchner, including her preferred heir, Daniel Scioli of the ruling Front for Victory coalition, believe policies need correcting to rein in inflation and reduce a budget deficit surpassing 6% of gross domestic product.

Argentina’s economy boomed during Mrs. Kirchner’s first term, bolstered by high prices for the country’s soybean exports. Poverty and unemployment fell. But from 2011 to 2014, the economy shrank 3.1% in per capita terms, the most in Latin America, according to consultancy Orlando J Ferreres & Asociados.

The Kirchner administration has aggressively printed money and increased public spending by around 30% in annual terms. But continuing on that path would stoke further inflation, possibly forcing the next president to cut spending or raise taxes — unpopular policies that could infuriate Kirchner loyalists in Congress.

The International Monetary Fund expects Argentina’s economy to contract 0.7% next year, and analysts say inflation could jump to 35% if the government devalues the peso.

But economists say the next president will have no choice but to ease currency controls and settle a legal battle with U.S. hedge funds that has prevented Argentina from tapping global credit markets.

“None of the candidates can escape from this,” says Nicolas Dujovne, a former director of Argentina’s central bank.

Mr. Scioli, who is leading in the polls, has pledged to gradually tweak the economy. His rivals, the conservative mayor of Buenos Aires, Mauricio Macri, and Sergio Massa, a young dissident of the ruling Peronist movement, say they would quickly lift currency controls.

October 26, 2015

The polls leading up to Argentina’s presidential election Sunday got it all wrong. Numerous surveys indicated ruling party candidate Daniel Scioli, President Cristina Fernandez de Kirchner’s chosen successor, would win enough votes for an outright victory.

Instead, 56-year-old Mauricio Macri, the center-right mayor of Buenos Aires and former boss of the popular football club, Boca Juniors, won 35.2 percent of the vote to Scioli’s 35.9 percent, with 86 percent of the polling stations reporting, virtually insuring the country’s first-ever run-off election on November 22.

“What happened today changes the politics of this country,” Macri told his supporters late Sunday. Macri wants to lift capital controls and trade restrictions to win investor confidence and bring hard currency into the dollar-starved economy.

Scioli has vowed to uphold the core elements of “kirchnerism,” a populist creed built around trade protectionism, social welfare and defense of the working classes. The 58-year-old Buenos Aires provincial governor and powerboating fanatic who lost his right arm in a 1989 racing accident, also promised a change in style to attract more investment and increase productivity, and has assembled an economic team of free-market advocates. He talked of a more gradual approach to monetary reform, while maintaining a generous social welfare safety net.

Under Argentine electoral law, in order to win outright in the first round a candidate must claim more than 45 percent of the vote, or at least 40 percent with a margin of 10 points over the runner-up.

By Kenneth Rapoza
October 25, 2015

The days of hardline Peronism, Cristina Kirchner-style, are over. As of Sunday, Oct. 25, Kirchnerism officially rides off into the sunset. And whatever replaces it today will be a significant improvement for Argentina. Once the Paris of the South, it has become the Venezuela of the Southern Cone of the Americas. Its Yankee-go-Home government managed to keep civil unrest in check, but destroyed the economy in the meantime. For this reason, nearly everyone with money at work in the country will be saying good riddance when the day is done.

“Regardless of Sunday’s presidential election result, the end of the Kirchner administration marks the beginning of significant changes in both external policy and domestic politics for Argentina,” say Barclays Capital researchers led by Pilar Tavella in New York.

Currently, Buenos Aires mayor Daniel Scioli holds a lead in the polls. He is no stranger to the Kirchner juggernaut. He was Cristina’s husband Nestor’s vice president between 2003 and 2007. He is a Peronist, but not as hard line as Kirchner, business leaders told FORBES during a trip to the city last year. Scioli is the candidate most likely to be elected president, either on Sunday or after a run-off vote on November 22.

If Sunday’s result is tight, there could be significant uncertainty on Monday morning.

A number of congressmen, governors, and mayors will also be elected. Should results be similar to the primary elections, the next Congress will be fragmented. There will also be changes in provincial leadership. Congress and governors will likely play a larger role in shaping politics and policies under the next administration.

It is uncertain how collaborative the outgoing administration will be up to the formal handover of power on December 10.

But, the need to boost central bank profits and jump start reserve accumulation, as well as the fact that Scioli seems to want Alejandro Vanoli to remain at the central bank, leads Barclays to believe an official devaluation of the peso to about 11.5 to the dollar is plausible. The official exchange rate now is 9.52. On the streets, known as the “Blue Market”, it sells for around 12 to 1.

By Dave McNary
Oct 23, 2015

Fox has set a Jan. 29 release date in the U.S. for the crime film “The Clan,” Argentina’s entry for the foreign-language category for the Academy Awards.

The film, directed by Pablo Trapero from his own script, will launch in New York and Los Angeles before expanding. Trapero won the Silver Lion Best Director Award at the Venice Film Festival.

“The Clan” has also been named as an official selection at the upcoming AFI Fest in November.

Producers are Hugo Sigman, Matías Mosteirín, Agustín Almodóvar, Pedro Almodóvar and Esther García — the same producing team behind last year’s “Wild Tales” — as well as Trapero.

The story centers on the Puccio family, which kidnapped four people in Buenos Aires in the 1980s and murdered three of them. The film set a weekend box office record in Argentina when it opened in mid-August.

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By Andrés Oppenheimer
October 21, 2015

Poverty has grown under President Cristina Fernández
Argentina is among countries growing the least in Latin America
The winner of Sunday’s presidential election will have to adopt belt-tightening measures

Argentina’s President Cristina Fernández de Kirchner still enjoys relatively high popularity rates thanks to an artificially inflated economy, but she may go down in history as one of Argentina’s most disastrous presidents ever.

Fernández, who will start her final weeks in office after Sunday’s presidential elections, has performed an economic miracle in reverse: Despite inheriting the country’s biggest economic bonanza in recent history, thanks to record prices for Argentina’s commodity exports, she will leave Argentina poorer than before.

There is no economist in the world who can dispute this: When she took office in 2007, Argentina’s economy was growing at 8 percent annually, and was one of the most rapidly growing economies in the world.

This year, Argentina’s economy is stagnant at 0.4 percent, and will contract by 0.7 percent in 2016, according to International Monetary Fund (IMF) estimates. Alongside Venezuela and Brazil, it’s Latin America’s worst performing economy.

The percentage of Argentines living in poverty has risen from 27.9 percent of the population in 2007 to 28.7 percent in 2014, according to Argentina’s Catholic University’s Social Debt Observatory. The Fernández government stopped releasing poverty figures two years ago.

When it comes to inflation, Argentina changed its way of calculating inflation in 2007. Since then, the government has estimated inflation to run at about 10 percent a year, while international financial institutions and private economists calculate it at 27 percent.

But the saddest fact is that Argentina, which was one of the world’s most advanced and best educated countries early in the 20th century, is now ranking near the bottom of international education, innovation and competitiveness rankings.

Argentina now ranks 59th among the 65 countries from around the world that participated in the PISA standardized test of 15-year-old students. In science and technology, despite the country’s wealth of individual talents, Argentina registered only 81 international patents last year, compared to South Korea’s 18,200, according to the U.S. Office of Patents and Trademarks.

In the World Economic Forum’s 2014-2015 Global Competitiveness ranking of 144 countries, Argentina ranks 104 in overall competitiveness, 138 in protection of property rights, 127 in irregular payments and bribes, 142 in wastefulness of government spending, 143 in favoritism in government decisions, 135 in government transparency, 133 in reliability of police services and 138 in ethical behavior of firms.

And yet, polls show that nearly 40 percent of Argentines are supporting government-backed candidate Daniel Scioli in Sunday’s vote, which could be enough for him to win with a divided opposition.

How can one explain that more than a third of Argentines support the government candidate, despite Argentina’s dramatic involution?

Part of it is because the government is giving cash subsidies to millions of people and has increased the number of public employees by 42 percent, to 1.7 million people. Part of it is because the government controls much of the media, and its propaganda machine has fooled many into thinking that the country has been better off under Fernández.

And part of it is — as Nobel prize winner Mario Vargas Llosa told me two weeks ago — due to Argentina’s “persistence in making mistakes, which seems to be an Argentine vocation.”

My opinion: Whether Scioli wins or loses on Sunday, Argentina is nearing its hour of truth. With an economy deeply in the red, continued capital flight, and simultaneous economic downturns in China and Brazil, Argentina’s biggest export markets, whoever wins the election will have to carry out painful economic adjustments.

By then, Fernández will be out of office, fighting to avoid legal prosecution on massive government corruption charges and possible wrongdoing in cases such as the mysterious death of government prosecutor Alberto Nisman, and hoping to influence the future government through the judiciary, congress and other institutions she now controls.

But when the belt-tightening begins, many Argentines will realize that she has squandered her country’s economic bonanza in a populist fiesta, and that she has been one of her country’s worst presidents in recent memory.

By Taos Turner
October 21, 2015

Candidate endorsed by President Cristina Kirchner suggests he will take a more conciliatory stance toward U.S.

BUENOS AIRES— Daniel Scioli, the front-runner in Sunday’s Argentine presidential election, comes from a populist ruling party that revels in defying the U.S.

But while reaping the benefits that accompany President Cristina Kirchner’s endorsement, Mr. Scioli is quietly indicating he would welcome foreign investors and settle a dispute with U.S. bondholders that has kept Argentina from tapping global credit markets.

Mr. Scioli recently tweeted a photo of himself with U.S. Ambassador Noah Mamet, who has never met with Mrs. Kirchner. His aides have been conversing with the U.S. Drug Enforcement Administration, which sharply reduced its Buenos Aires staff since Mrs. Kirchner curbed her government’s cooperation.

Such evidence of a more conciliatory stance toward the U.S. has caused grumbling among Mrs. Kirchner’s top aides, who want Mr. Scioli to closely adhere to her policies should he win. Argentina’s constitution bars her from a third term.

‘Daniel wants Argentina to be a normal country—to be free of the things that make it not normal.’
—Alejandro Morales, an adviser to Mr. Scioli

Under Mrs. Kirchner, Argentina has allied itself with Venezuela, Russia and other countries challenging U.S. interests. Her government has intervened in the economy, expropriated foreign-owned firms and ignored a U.S. court order to pay what could amount to more than $1.8 billion to hedge funds.

“Clearly, he’s not one of them, but he doesn’t say it,” political analyst Federico Thomsen said in reference to Mr. Scioli’s differences with Mrs. Kirchner’s populist Peronist movement.

Throughout the campaign, Mr. Scioli has publicly remained at the president’s side, avoiding statements that would alienate the far-left part of her base, which views him with distrust.

But the potential cabinet members Mr. Scioli has revealed are considered distant from Mrs. Kirchner, said Ricardo Romano, a prominent Peronist who was deputy chief of staff for former President Carlos Menem. “The disclosure of his would-be cabinet was a pre-emptive move to avoid potential interference from Mrs. Kirchner,” he said.

So far the strategy appears to be working. Mr. Scioli, the 58-year-old governor of Buenos Aires province and home to nearly 40% of the country’s population, is the Peronists’ best hope of retaining the presidency. The scion of a once-prominent business family, he is leading a field of three major candidates ahead of a first round of voting, drawing 38% support, according to a recent poll by Management & Fit. His main challenger, Buenos Aires’s market-friendly Mayor Mauricio Macri, is in second with 29%. Sergio Massa, a dissident Peronist who broke with Mrs. Kirchner, trails at 21%. To win outright and avoid a November runoff, Mr. Scioli would need at least 40% of the vote and a minimum 10-point lead over Mr. Macri.

‘I don’t think there’s much ideology there. Look at his track record—he’s been with everybody. ’
—Political analyst Federico Thomsen

Though Mr. Scioli was a no-show at a presidential debate earlier this month and gives speeches short on details, his aides and close allies have said he is pondering a new direction for Argentina, both in economic terms and in its relations with Washington.

“Daniel wants Argentina to be a normal country—to be free of the things that make it not normal,” said Alejandro Morales, an aide, referring to rigid currency controls and Latin America’s second highest inflation rate after Venezuela’s.

An ally, Juan Manuel Urtubey, the governor of Salta province, recently told business leaders in New York that China’s economic slowdown demands a range of reforms here, including better relations with Washington. “With Daniel Scioli as president, these things are possible,” Mr. Urtubey said.

Economists say a sharp shift may be unavoidable: Foreign reserves are set to run out just as the new president takes office in December. Argentina’s closest trading partner, Brazil, is mired in its worst recession in 25 years, and the economy here is on track to contract 0.7% next year.

Mr. Scioli’s advisers say he would cut back on costly utility subsidies, incentivize exports and overhaul a statistics agency that economists accuse of doctoring inflation data. It remains unclear how fast he would move on those plans.

In brief interviews with The Wall Street Journal, Mr. Scioli wouldn’t say how his presidency might differ from Mrs. Kirchner’s. “They are phases of the same project,” he said, implying his administration would continue with her policies.

Argentina’s Presidential Candidates
Meet the top contenders in Sunday’s election

Daniel Scioli
58 years old
Coalition: Victory Front
VP: Carlos Zannini

A former speedboat racing champion and now the governor of Argentina’s biggest province, Daniel Scioli was vice president from 2003-2007. As the ruling party candidate, he has called for continuity.

Mauricio Macri
56 years old
Coalition: Cambiemos
VP: Gabriela Michetti

A former Boca Juniors soccer club president and now the mayor of Argentina’s capital city, Mauricio Macri has long led the calls for changing Argentina’s economic and foreign policies.

Sergio Massa
43 years old
Coalition: United for a New Alternative
VP: Gustavo Sáenz

A mayor and former cabinet chief for President Cristina Kirchner, Sergio Massa later turned against her policies and has called for putting corrupt politicians in jail.

Those who have closely followed his career describe him as enigmatic, or at least not given to bold policy pronouncements.

“You have to interpret him, guess what he’s saying and look at his gestures,” said Pablo Ibáñez, co-author of “Secret Scioli,” a biography highlighting his penchant for vague pronouncements that reveal little.

A former speedboat racing champion who lost his right arm in a crash, Mr. Scioli entered politics in the 1990s, serving in Congress and allying with Mr. Menem, a darling of Wall Street. From 2003 to 2007, he was vice president to Néstor Kirchner, Mrs. Kirchner’s late husband, who helped bury U.S. plans for a hemispherewide free-trade zone.

“I don’t think there’s much ideology there,” said Mr. Thomsen, the analyst. “Look at his track record—he’s been with everybody.”

Critics of Mr. Scioli say he is more interested in marketing his image than in managing the country.

“The only ministry that works in the province is the publicity ministry,” said Mr. Massa, one of his rival presidential candidates.

When heavy flooding hit the province in August, Mr. Scioli flew to Italy—returning only after photographs of him in first class hit the press while much of the province was underwater.

He dedicated just 5% of public spending to infrastructure from 2008 through 2013, far less than any other Argentine province, according to Iaraf, a think tank. Standard & Poor’s recently said in a report that the province’s financial management was weak and lacked planning.

But analysts at both S&P and Moody’s Investors Service said in interviews that Mr. Scioli’s economic team has been professional and transparent. They also noted that what one of them called Mrs. Kirchner’s “haphazard” macroeconomic policies hamstrung Mr. Scioli with rampant inflation and other hurdles.

London-based consultancy Capital Economics said in a research note that Mr. Scioli, who became governor in 2007, had “impressively” turned a substantial fiscal deficit into a surplus. His plan to appoint Silvina Batakis—currently the provincial finance chief—to run Argentina’s economy should he win is also seen as a positive sign, it said.

Gustavo Marangoni, an adviser who is president of one of Argentina’s biggest public banks, says Mr. Scioli has a solid business sense.

“Daniel understands the mentality of businessmen very well because he comes from a business family,” he said.

By Lucinda Elliott
October 22, 2015

Fund managers are sticking by their positions as country approaches a change of government.

As the Kirchner years draw to a close, many investors are convinced there is nowhere to go but up for Argentina. Ahead of the October 25 presidential election, a survey by FT Confidential Research shows those fund managers with exposure to Argentine equities are holding on to their investments or even planning to buy more.

But fund managers with no exposure are still not ready to take the plunge, the survey found.

Eight out of 20 equity fund mangers polled during the third quarter of this year have exposure to Argentina, unchanged from three months ago and up from six at the beginning of the year.

And while allocations are still shy in comparison with the other five Latin American markets surveyed, a small cadre of investors plan to step up their exposure in the final quarter of this year, regardless of the election outcome. Nine investors plan to hold Argentine shares in their portfolio in the fourth quarter.

There is increasing confidence that Daniel Scioli of the ruling Peronist party, the frontrunner in opinion polls, will win the presidency and seek a speedy solution to a long-running and bitter dispute with a group of holdout US hedge funds that has locked Argentina out of global capital markets for a decade, and that he will begin the macroeconomic reforms needed to fix Argentina’s stagnant economy.

“Scioli winning the election is priced in, and the stocks I own can’t go down much further; so I’m in,” said one portfolio manager based in Santiago who manages $500m dedicated to Latam equities.

Fund managers polled singled out what they said were attractive investments including Argentine banks, real estate companies and online retailer Mercado Libre.

Equity allocations to Argentina vs benchmark — number of respondents

Q1 2015
Q2 2015
Q3 2015
Q4 2015*
Equal weight
No investment
Source: FT Confidential Research. *planned allocations

“All the long-only guys are going into Argentina, so I’m tempted to follow,” said one New York-based manager of a leading international fund. “The hedge fund guys have sold out of Argentina recently creating some buying opportunities.”

Nevertheless, 11 of the 20 managers polled said they would continue to stay away from Argentine stocks after the election, suggesting optimism about the changes ahead is not undiluted.

October 21, 2015

First lady leaves a royal mess for the next president in Buenos Aires

Argentina is passing from an age of easy prosperity under President Cristina Fernández to more penurious years without her. Since 2004, the country has enjoyed a virtuous cycle of economic growth and social progress. The “victorious decade”, as the strident Ms Fernández likes to trumpet it, is largely thanks to a sovereign debt default, which remains unresolved, and a lucky commodity price boom, which has turned to bust. How to deal with the coming downturn, the legacy of the 2002 default, and the heightened populism Ms Fernández leaves behind are the main challenges facing the victor of Sunday’s presidential election (Ms Fernández cannot run for a third term). The universal lesson is that the adjustment Argentina needs to make is best done quickly; delays only increase costs, especially to the poor.

Two candidates lead the field. Both have stressed, albeit in deliberately vague terms, the need to address growing economic problems. These include currency restrictions and 20 per cent inflation, as well as settling with holdout creditors. These New York-based hedge funds have cloaked themselves in the theology of contract law and won a technical ruling that legally bars Argentina from international capital markets — and just when the country needs extra external financial support.

First in the running is Daniel Scioli, the “continuity candidate”, who has campaigned on a programme of gradual change. As a leading light in the ruling Peronist party, he also has Ms Fernandez’s blessing. That makes his position similar to that of Dilma Rousseff, Brazil’s president, who won power in 2010 after she also was anointed by her predecessor. Like Ms Rousseff, Mr Scioli’s biggest draw is “governability”: the notion that, as a Peronist, he can manage Congress best. Yet that is also Mr Scioli’s biggest drawback — like Ms Rousseff in neighbouring Brazil. Today, it is her Workers party that is blocking the economic measures the country needs to deal with the commodity bust.

Close behind lies Maurico Macri, the “turnround candidate”. The centre-right mayor of Buenos Aires has campaigned on a platform closer to shock treatment, and his biggest selling point, as a non-Peronist, is “credibility”. But this is also his biggest drawback: as an outsider, Mr Macri may be less able to pass reforms. Again, Brazil provides a mirror: Mr Macri’s position is similar to that of Aécio Neves, the centre-right candidate who lost the 2014 election partly because his outsider’s message of economic cold turkey alienated voters, even though Ms Rousseff later took many of its ideas.

Mr Scioli may gain enough votes on Sunday to win outright, rather than face a run-off in November. But whoever becomes president, the need for change is pressing. Government spending has doubled in just five years to 40 per cent of output. However socially progressive that may be, Argentina can no longer afford such free-spending populism — as evidenced by its widening and unfunded fiscal deficit.

Decisive economic action can be politically painful. Yet it is the best course. It would speed investment and lending into Argentina’s underinvested and under-leveraged economy. It would strengthen Buenos Aires’ hand in negotiations with the holdout creditors. And it would mean that Argentina has a better chance of avoiding Brazil’s fate, where a scandal-infested government has suffered the country to slip into a deep recession and seen its own myth of a “victorious decade” turn to ashes. Argentina can still avoid that damming historical judgment — something that all Peronists, even the heterodox Ms Fernández, would surely prefer to avoid.

By Jesica L. Santos
October 21, 2015

On October 25, Argentinians will go the polls to elect their next democratic president who, for the first time since 2003, won’t have “Kirchner” as a last name. But the choice Argentinians will really be making concerns not an individual but, rather, the type of country they want to recover.

The current populist government has been in power for 12 years if we count all the administrations of both Néstor Kirchner (deceased) and his widow and current president, Cristina Fernández de Kirchner.

Having failed to obtain the support needed to amend the Constitution in order to seek a third term, Kirchner recently single-handedly appointed as her successor Daniel Scioli, the former offshore powerboat racing champion and current, more moderate (or at least not as combative) governor of Buenos Aires, the largest province in the country. Scioli owes much of his political support, if not all, to the fact that Kirchner chose him to succeed her as opposed to having a primary, as the rest of the political parties do, to choose the nominee. But first, she made sure to impose on Scioli a running mate whose loyalty to her and her husband has been bullet-proof over the years, Carlos Zannini. And in doing so, rumor is, she has tried to secure her own continuity with decision-making power behind the scenes.

The opposition is represented by five candidates who basically run on the slogan of change, with only two really having the possibility of giving Scioli, who instead promises continuity, a run for his money. These are center-right Mauricio Macri, the current mayor of the city of Buenos Aires (the most important and influential in the country), and Sergio Massa, a Peronist centrist who defected from the Kirchner government two years ago over personal disagreements with Kirchner during the time he served as her Chief of Staff.

A lot is at stake for Argentinians, as their country faces a myriad of serious problems ranging from corruption scandals surrounding the Kirchners themselves and the currently-indicted Vice President Amado Boudou; an inflation rate of over 25% (unless you ask the government who claims it is in low single digits); unprecedented social polarization; a stagnating economy and steep deficit; isolation from global markets; rampant violent insecurity in the streets that were once safe for kids to play in; a total erosion of the public’s trust in judicial institutions; rising poverty levels in urban areas; a lack of investment that prevents growth; an unsustainable fiscal situation; and a very dangerous increase in drug-related crimes.

These are some of the few but grave problems which plague the country, to which we must add the political style of its current leader, known to have created (or imagined) enemies everywhere and infused society with class-related resentment seen fewer times before.

A mere week away from the national presidential election, (a reminder that for Argentinians between the ages of 18 and 69 voting is mandatory) little do we know with any degree of certainty about what might await the country on December 10 when the new president is to take the oath of office.

Polls are generally not to be trusted as most of them are commissioned by the political parties themselves and their results used for marketing purposes during TV ads. And then we have street polls, which give results that are as volatile as the political environment in the country.

As an example of this lack of predictability and lasting allegiances, recently, a candidate for Massa’s party, Mónica López, switched to Scioli’s party but continued to be on the ballot for Massa and appeared on national TV asking that people not vote for her. That is how politics can be in this country.

As a result, we can rely, only a little, on other sources available to get an idea of which candidates people might be leaning towards. If we go by what citizens are manifesting on social media, or to journalists and political scientists on the ground who try to gauge voting tendencies in a professional way despite the natural margin of error that exists with these exercises, we seem to have a scenario in which Scioli continues to be the front runner with approximately 40% of the vote, closely followed by Macri with approximately 30%. This, however, means nothing, particularly if we take into account that to win in this first election and avoid a run-off one, one candidate needs to obtain either 45% of votes, or 40% and a 10-point lead over the candidates who comes in second. As things stand at the moment, and noting once more than in Argentina all can change in a day especially with the high number of undecided voters that exists, it is still improbable that we will see a winner in the first round on 25 October.

The issue that is hard to understand for opponents to the Kirchners’ three administrations is that this is still the scenario even though there is clearly 60% of Argentinians who disapprove of the current government and favor change. This standing was manifested in the primary election held last August where results reflected the projections just described as the likely outcomes in the next election as well (Scioli: 38.4%, Macri 30.1%, Massa: 20.6%). But it is the fragmentation of the opposition that seems to be the cause for a potential failure to achieve a victory in the first round rather than an active support for continuity through the endorsement of Scioli.

The opposition has made the mistake of allowing personal egos to get in the way of forming alliances meant to identify what unites them rather than what separates them. A closer scrutiny of the situation also shows that little change can Massa really offer, when he was the Chief of Staff of Cristina Kirchner for two years and the mastermind of major appointments and policies. But, to the ever-growing poorest, Macri may deviate so much from the current populist agenda that these fear they could lose the welfare plans they have been granted in the last decade, although the candidate denied intending to do so if he wins the presidency. And Scioli seems to have reached a ceiling of those loyal to Kirchner so it is questionable if he will be able to expand the margin he got in his favor in the primary election.

These last weeks could have been key to swaying the undecided but, unlike his opponents, Scioli did not show up at the much-awaited first presidential debate ever on 4 October, claiming he did not want to debate when his ideas are well-known to people already. But what his rivals understood with his decision not to debate them was that either he is not prepared to answer questions, or that Kirchner did not let him, casting a doubt over his preparedness to assume the responsibilities associated with running a country.

But so, if we have no clear winner in the first election, what can happen on 22 November (date set for the second round)? This will depend on whether at that point the opposition will strike a deal to push for change and achieve it, finally. It is my assessment that if Scioli were to face a second round, he could lose if the opposition rallies support for the only candidate at that time who stands a chance. At a minimum, Scioli would be greatly debilitated politically within his party and among the opposition by the results of the election, what could put him at more risk for an actual de facto manipulation on the part of Kirchner. This situation would indeed be a terrible one for Argentina but, fortunately, we are not sure if Scioli could even win first.

What is unquestionable, however, is that regardless of the election results, 10 December 2015 will mark the end of an era for Argentina and a much hoped-for turning point for the majority of its population. Even if Scioli ends up taking office, there will be change for the country. Argentinians will no longer be subjected to a constant abuse of power, nepotism and frequent plans for swapping presidential chairs among family members, and demagogy who targets those with the least opportunities when corruption allegations abound among those in power.

Argentinians will also perhaps have better chances of seeing a restoration of the credibility of institutions, such as the judiciary, and of a significantly deteriorated diplomatic relation with, well, the world. And so Argentina will be a better country as a result. It is just a matter of how much better.

And this exactly will be decided by its citizens this week, when they will choose alternation as part of a healthy democratic government system, not the “least bad” successor of the closest the region has had to a despotic monarch.

By Carolina Millan
October 21, 2015

* Futures contracts are pricing in 25% devaluation in 3 months
* Argentina’s foreign reserves are hovering near a 9-year low

A devaluation is coming to Argentina regardless of who wins presidential elections Sunday.

That’s what traders are betting in the offshore futures market. They see the government allowing its official exchange rate to plunge 25 percent in the next three months to a record low 12.76 pesos per dollar. The central bank controls the rate through daily interventions.

Currency speculators are ratcheting up their devaluation wagers even as front-runner Daniel Scioli, who has promised to make only gradual changes to the country’s foreign-exchange policies, widens his lead in presidential polls. That’s because the central bank is burning through international reserves to prop up the official rate. To traders, that means the new president will have little choice but to allow the peso to weaken significantly or risk depleting reserves already near a nine-year low.

“The market is pricing that no matter who is in the next government, they’re going to have to devalue and fast,” Daniel Chodos, a strategist at Credit Suisse Group AG, said by telephone from New York.

The central bank declined to comment on devaluation expectations in futures markets.

Scioli says the country doesn’t need a large devaluation of the peso which would hurt the purchasing power of Argentines. Leading opposition candidate Mauricio Macri has pledged to allow the exchange rate to float freely on his first day in office if elected, with advisers saying it would likely be somewhere in between the official rate of 9.5 and the black market rate of 16.03 pesos per dollar.

President Cristina Fernandez de Kirchner, who is unable to run for a third-consecutive term, devalued the peso by 19 percent in January 2014. But policy makers have limited declines in the currency this year to 11 percent, compared with a tumble of 32 percent in Brazil, Argentina’s biggest trading partner.

Argentina’s reserves have fallen 18 percent in October to $27.4 billion in large part due to a $5.9 billion payment on its so-called Boden bonds.

“With the overvalued peso, the Brazilian real depreciating and the poor state of the foreign reserves following the Boden 15 payment, the devaluation will have to be faster and less gradual than the market had expected,” Credit Suisse’s Chodos said.

Fernandez has imposed a number of currency restrictions to prevent Argentines from pulling money out of a country where inflation is running above 20 percent, the second-highest in the Western Hemisphere. The controls have spawned a myriad of illegal currency markets where Argentines can sidestep limits on their ability to obtain dollars to better preserve the value of their savings. In the black market, the peso sank to a record 16.11 per dollar Oct. 19.

While the offshore market is signaling a large devaluation, trading in the local futures exchange market known as Rofex indicates that no such move is in the offing. That’s because the central bank also intervenes in that market daily in an effort to tamp down expectations, according to Jorge Piedrahita, Chief Executive Officer of Torino Capital.

In the Rofex market, the peso is expected to fall just 4 percent by December to 9.9 pesos per dollar.

But with Argentina’s reserves dwindling and the country’s exports becoming less competitive as the currencies of its trading partners fall further, Fernandez’s successor will find it hard to avoid a devaluation.

“Even with the uncertainty of the elections, it’s clear that there’s an expectation that the government will have to adjust the exchange rate sooner or later,” said Ezequiel Aguirre, a currency strategist at Bank of America Corp.

By Pablo Rosendo Gonzalez and Charlie Devereux
October 22, 2015

* The two leading candidates plan to cut soybean export taxes
* Macri, Scioli also pledge to eliminate wheat, corn taxes

While it remains unclear who will win Sunday’s presidential election in Argentina, one thing is already decided: farmers are poised to benefit as both leading candidates plan to eliminate wheat and corn export taxes and cut a soybean levy.

Wheat and corn taxes should be cut “immediately” while the 35 percent soybean export levy should be reduced to 20 percent, Miguel Bein, main economic adviser to leading presidential candidate Daniel Scioli, said Wednesday in a report posted on his consulting firm’s website. Mauricio Macri, Scioli’s main contender according to local polls, has previously said he would eliminate corn and wheat taxes while cutting the soybean levy by 5 percent a year.

President Cristina Fernandez de Kirchner, who can’t run for a third consecutive term, has clashed with farmers since gaining office in 2007 when she unsuccessfully tried to raise the soybean tax to 45 percent. That ignited 129 days of strikes, road blocks and food shortages across the country until July 2008 when then Vice President Julio Cobos voted against the increase. Soybeans support a third of government spending.

Stimulating Exports
Argentine farmers have exported $17 billion of grains and oilseed this year, the lowest for the period since 2007, according to exporters’ consortium data, as they wait for a change of government. In 2014, they sold a record $24.1 billion of grains and oilseed to boost central bank reserves.

“By stimulating the export of soybeans stored by farmers we would accelerate the injection of dollars into the Central Bank without issuing debt,” Bein says in the report. He estimates that farmers are hoarding as many as 22 million metric tons of soybeans, about one third of last season’s record crop, or $7.4 billion worth of oilseeds.

Argentina, the world’s third-largest grower of the oilseed after the U.S. and Brazil, is the world’s largest exporter of soybean oil and derivatives, used in soy milk, tofu and animal feed.
Rebuilding Reserves

Cutting export tariffs will help the next Argentine government rebuild its depleted foreign reserves, which at $27.4 billion are near a nine-year low, the report said. Higher reserves would allow Argentina to negotiate from a stronger position with holdouts from the 2001 default.

Argentina defaulted last year for a second time in 13 years after Fernandez defied a New York court order requiring the country to repay disgruntled creditors.

Scioli is within a fraction of winning the presidency in the first round of elections to be held Sunday. He had 39.7 percent of intended votes against 28.8 percent for Macri, according to the average of four polls viewed by Bloomberg. Scioli would need to exceed 40 percent and have a 10 percentage point lead over the second-place candidate to avoid the first run-off in Argentina’s history.

By Sarah Marsh
Oct 21, 2015

In the affluent Recoleta neighborhood of Buenos Aires, where grand 19th century buildings hark back to an era of prosperity, middle class voters fear a presidential election on Sunday will do nothing to halt Argentina’s long decline.

“We always hope things will change for the better but they just get worse. This used to be a rich country,” said Lucila Novillo, 53, who has struggled to keep her interior design business afloat over the past four years as tight capital controls virtually paralyzed the real estate market.

All the leading candidates in the race to succeed leftist President Cristina Fernandez have promised reforms to ease the interventionist policies that her opponents and investors say have choked the economy.

Yet the front-runner is ruling party candidate Daniel Scioli, who has Fernandez’s backing and is broadly supported by poorer Argentines who benefit from expanded subsidies under her government. Scioli offers the least amount and slowest pace of change.

Many middle class voters like Novillo, who will cast her ballot for opposition candidate Mauricio Macri, fear Argentina’s problems are too deep-rooted for any one president to fix and will keep dragging it down regardless who wins.

Despite vast natural resources and a well-educated workforce, the South American country has steadily declined from its perch as one of the world’s richest nations in the 1930s, lurching from one financial crisis to the next.

While Argentina remains Latin America’s third largest economy, its next government will inherit a host of woes from double digit inflation and precarious foreign reserves to last year’s debt default.

“We should be a great country. We have brilliant, well-educated and creative people,” said Novillo. “These qualities should help us grow, but corruption prevents that. The roots of corruption have reached into every corner of this country.”

Most of Fernandez’s cabinet members face corruption allegations, authorities are investigating a possible money laundering scheme at a luxury hotel her family owns, and her vice president is being tried for abuse of power.

The justice system often fails to clean up such cases, many Argentines complain, fostering a lack of confidence in the country’s institutions.


Recoleta’s middle-class and wealthy residents reminisce about Argentina’s heyday when Buenos Aires was known as the “Paris of the South” and complain about its economic decline and what they perceive as worsening crime, healthcare and education.

“Our public education used to be excellent, people came from all over Latin America to study at Argentine universities,” said Eduardo Jesus Zimmermann, 84, a former banking executive.

“Now Argentines head to the United States, England or elsewhere abroad because public universities are a disaster.”

Many put the country’s decline down to Peronism, the fragmented populist movement that has dominated politics since the first presidency in the 1940s of Juan Peron, who won hero status for his fiery nationalism and defense of workers’ rights.

“We’ve been going downhill for 70 years since Peron,” said Zimmermann, on his way to a meeting of landowners.

But Peronism remains Argentina’s most potent political force and Peronist parties have won nine of the 11 presidential elections they have contested. With Scioli, they appear primed to win another.

Zimmermann said Peronist power structures, such as its hold over trade unions and Congress, would make it hard for his preferred candidate, the pro-business Macri, to make the necessary reforms even if he won the presidency.

Macri has campaigned on a platform of change, promising to dismantle capital controls and trade restrictions from his first day in office to win investor confidence and bring hard currency into the dollar-starved economy.

While his pledges are popular among the urban middle class, voters in low income neighborhoods fear he will cut generous welfare benefits introduced by Fernandez.

Those neighborhoods, often densely populated, are ruling party strongholds and might carry Scioli to victory without even needing a second round runoff vote.

Polls show Scioli close to the 40 percent threshold that would be enough for him to win outright providing he has a lead of 10 percentage points over Macri, a strong probability.

For some, the chance of real change is just too small to wait around for.

Delfina Raffo, 30, said she was leaving Argentina next month, following in the footsteps of friends and cousins in search of a brighter future elsewhere.

High taxes and the stagnant economy forced her to close her Recoleta clothes boutique earlier this year. Two robberies at gun-point made the decision easier and she plans to move to Singapore which is safer and where she believes she can earn more.

“I feel we are just going to continue on the same path we’ve been going along … with ever more poverty, and the middle class being pulled lower,” Raffo said.

By Patrick Gillespie
22 October 2015

NEW YORK (CNNMoney) — Wall Street’s hedge funds can’t wait for Argentina’s next president.

They’ve been battling with the current president, Cristina Fernandez de Kirchner, and her predecessor and late husband, Nestor, for 12 years over huge debt payments. That could soon change.

Argentines will elect a new president on Sunday, and a major issue is whether the new leader will finally end the country’s fight against New York hedge funds.

After defaulting on $95 billion of debt in 2001, the country has been in a decade-long fight in courts with the hedge funds, also known as “vultures” in Argentina, South America’s second-largest economy.

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.

There are three candidates running for president: Daniel Scioli, Mauricio Macri and Sergio Massa. Scioli is most similar to the current president and he’s leading in the polls.

But many experts say Macri, second in the polls, is Wall Street’s favorite and most likely to negotiate with the hedge funds. That’s because Macri has proposed economic and financial reforms that would undo Kirchner’s policies, which investors strongly dislike.

“Argentina’s debt problem has to be fixed quickly so that we can return to having credit,” Rogelio Frigerio, the leader of Macri’s political party, PRO, recently told CNN’s Diego Laje in Buenos Aires. “We need to finance these [economic] development policies.”

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

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

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

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.

Peso problems

For years, ordinary Argentines couldn’t buy dollars from local banks because of government restrictions. Now they can, but there’s still major limits on how much they can exchange.

So many Argentines exchange pesos for dollars on the black market because they don’t want to deal with government restrictions.

Three years ago, one dollar equaled about 6 pesos on the black market. Now one dollar gets you 16 pesos. The official exchange rate is 9.50 pesos to the dollar.

“We think the Argentine currency is significantly overvalued,” Sebastian Rondeau, a Bank of America economist, wrote in a research note. He says the real value is closer to the black market exchange rate.

Change of tune: we could negotiate

For years, presidential candidates have said they would never negotiate with the hedge funds. But each of the current candidates, or their advisers, have hinted that they would consider negotiating with the holdouts.

But settling with funds would be a deeply unpopular decision. In a politically-divided nation, Argentines unite over their hatred of the hedge funds.

“The problem is — how do you package it, how do you sell it after saying you would never negotiate with them,” says Eugenio Aleman, an Argentine and senior economist at Wells Fargo. “They have to figure out how to pay.”

Investors can’t wait for a new president. Argentina’s stock index, Merval, is up 27% so far this year, and experts say it’s because of optimism that the next president will resolve the dispute and open up Argentina’s economy to foreign investment.

NML Capital declined to comment for this article, but it has repeatedly offered to negotiate with Kirchner.

“Argentina is going to pay. The question is how much it’s going to pay,” Daniel Artana, senior economist at the Foundation for Latin American Economic Investigations, told CNN in a phone interview from Buenos Aires.

22 October 2015

U.S. biodiesel producers are asking a federal appeals court to scrap EPA’s approval of imports of biodiesel from Argentina used as a qualifying renewable biomass fuel under the agency’s renewable fuel standard (RFS), claiming EPA failed to undertake necessary public comment on what they call a flawed tracking system for the biodiesel.

EPA Jan. 27 issued an approval of a tracking system designed to show that biodiesel from Argentina meets the criteria to be considered “renewable biomass” under the renewable fuel standard (RFS). The approval, in the form of a letter to the Argentine Chamber of Biofuels (CARBIO), constitutes a judicial reviewable “final agency action,” says an Oct. 8 opening brief filed in appellate court by the National Biodiesel Board (NBB). Relevant documents are available on See page 2 for details. (Doc. ID: 185601)

NBB, representing U.S. biofuel producers, says the decision approves a flawed system that allows access to the U.S. market for biodiesel produced from Argentinian soybeans, and CARBIO’s tracking system cannot ensure that the imported fuel is truly renewable.

NBB says the decision should have been open to public notice and comment, and is also asking the U.S. Court of Appeals for the District of Columbia Circuit to vacate a separate agency action — a letter from the agency refusing their request to seeking public input on the plan.

Further, NBB says EPA’s approval of what the board sees as an inadequate tracking system alters the underlying RFS regulations governing biodiesel, and reopens them to judicial review. The board therefore also asks for remand of those regulations to EPA to address the shortcomings that allow the imports at issue.

“EPA failed to provide any notice of the CARBIO proposal it purports provides sufficient quality assurance to ensure that soybean oil from Argentina, a country that has seen a rapid expansion of agricultural lands, came from lands that were in production prior to December 19, 2007. Public comments were necessary for the first plan of its kind,” says the brief.

NBB, representing U.S. biofuel producers, says that the CARBIO tracking system relies on the identification of “go areas,” which are shown by satellite imagery to have been agricultural in 2007 and not newly cultivated areas that have been recently cleared of forest. However, it is unclear how CARBIO will define such areas, and EPA lacks the means to check that they are correctly identified, the brief says.

“EPA’s review of the CARBIO proposal was arbitrary and capricious in that it did not comply with its own regulations. There was no explanation or analysis to support the identification of ‘go areas’ as ‘existing agricultural lands,’ to ensure feedstock producers, handlers or importers are in compliance, or to even understand the scope of the program,” the filing says. “Indeed, EPA appears to have handed its authority over to third parties, one of which has clear conflicts of interest,” the group says referring to CARBIO. “Thus, EPA could not have ensured that the CARBIO proposal provides the adequate level of quality assurance in clear contravention of its regulations.”

NBB further says that EPA’s actions have “ripened” the underlying RFS regulations on biodiesel for a legal challenge, and that they should be vacated and the relevant provisions on imports and alternative biomass tracking systems remanded to EPA.

The U.S. biodiesel producers say that Argentinian producers are set to “flood” the U.S. market with “biomass-based diesel subject to minimal quality assurance mechanisms,” having lost access to their previous major market, the European Union.

Meanwhile, EPA is preparing to finalize its multi-year RFS proposal setting blending targets for biodiesel and other alternative and renewable fuels. The agency under a consent decree must by Nov. 30 finalize the fuel targets for 2014 through 2016. — Stuart Parker

21 October 2015

In addition to constant policy changes that affect the rules for the insurance sector, the industry has had to come up with creative solutions to cope with Argentina’s high inflation, and the economic environment remains one of the most challenging in the continent for insurers.

Inflation in Argentina, put at around 30% annually by some private groups who disagree with the government’s figures, undermines the ability to estimate the insurable interest-value, according to law firm Kennedys.

The most serious inflation-induced distortions come when calculating the immediate value of insured property.

Once the amounts that are considered appropriate are established, there will be immediate deviations as the face value of the insured property increases due to inflation. In such cases insurance policies will not fulfill their purpose of returning the insured party to the same financial situation as before the loss, as the value of the insured property exceeds the sum insured.

Despite the fact that the most affected party seems to be the policyholder, the industry suffers from these distortions as people are put off insurance.

One solution used by insurers has been to include “adjustment clauses” in the policies extending the coverage beyond the insured sums, simulating a market value for the property. This strategy has the downside that they usually include a cap which in turn translates into an additional premium to be charged to the client.

Other solutions used have been issuing quarterly or even monthly policies, which have higher costs for clients; or US dollar-denominated policies, but these are made ineffective by government exchange controls.

In some countries such as Chile with the Unidad de Fomento and Venezuela with the Unidad Tributaria special index-linked currency units exist designed to offset the effect of inflation. In Argentina the Unidad de Cuenta de Seguro existed decades ago but was abandoned in the 1990s when the peso was pegged to the US dollar, and was never revived.

Moreover, inflation reduces clients’ purchasing power, in turn making insurance more expensive with the subsequent impact on demand.

12. VOLKSWAGEN TO RECALL AROUND 17,000 VEHICLES IN BRAZIL (Dow Jones Institutional News)
By Rogerio Jelmayer
22 October 2015

SAO PAULO–German auto maker Volkswagen AG (VOW.XE) will recall 17,057 vehicles in Brazil to fix software that manipulates emission tests.

The recall will affect Volkswagen’s Amarok pickup, produced in Argentina in 2011 and 2012. The company said it will notify owners of the vehicle from the first quarter of 2016 on details of the recall.

In September, Brazil’s federal environmental agency, Ibama, opened an investigation into Volkswagen to determine if the German auto maker committed fraud in the South American country with its diesel engines. Ibama could impose a fine of up to 50 million reais ($12.7 million) on Volkswagen if the company was found to have violated any of the country’s vehicle-emissions rules.

The U.S. Environmental Protection Agency said last month Volkswagen has admitted to using software on some of its VW and Audi diesel-powered cars to dupe U.S. emissions tests.

Volkswagen is the third-largest auto maker in Brazil in terms of sales, behind Fiat Chrysler Automobiles NV (FCA.MI) and General Motors Co. (GM).

The German auto maker sold 226,942 vehicles in Brazil in the first nine months, according to auto maker association Anfavea.

By Angelica Kershaw
21 October 2015

In similar developments, the ministers of health of Argentina and Peru (MoHs) are working separately on the implementation of electronic patient health records (EHR). According to the regional source Andina, Peru’s MoH in plan to implement (EHR) at a national level in order to make patient records available to hospitals and other healthcare establishments, and improve the efficiency of the national healthcare system by avoiding duplicate patient tests. Similarly, the Argentine Ministry of Public Health in Misiones, has launched the first stage of the province’s digital medical record system, which will initially be introduced for patients within the public healthcare sector. This phase involves the creation of a database that will be accessible throughout the province, as well as the issuance of medical cards.

Significance: With this initiative, the Peruvian government will be implementing law 30024, which establishes the creation of a national registry of EHR and the basis of the system. The regional project in Argentina aims to organise the existing patient information rather than alter the current charging system used at each hospital. However, both of the initiatives are likely to improve patients data report and accessibility by them and healthcare providers facilitating the diagnosis and prescription processes.

By Rene Rodriguez
21 October 2015

Watching The Clan, you have to keep reminding yourself this absolutely insane story really happened. The story of the Puccio family, who lived in a wealthy suburb of Buenos Aires and became infamous for a series of astonishing crimes in the 1980s, has fascinated Argentina for decades but may not be all that well-known in the U.S. This taut, polished thriller, which has been made with the energy and pop-culture savvy of a Hollywood production, should change that.

Director Pablo Trapero (White Elephant) opens the picture with a quick prologue that uses news footage to recount the 1983 appointment of the democratically elected president Raúl Alfonsín and his ensuing reprisals against crimes committed during the country’s “Dirty War,” during which government-sponsored kidnappings left a toll of more than 30,000 desaparecidos (the vanished).

As the film opens, Arquimedes Puccio (Guillermo Francella), a dead-eyed psychopath who worked as an intelligence operative for the previous regime, is continuing his nasty work of kidnapping wealthy people for ransom – and keeping them prisoner in the home he shares with his wife and five children. In an early scene, we watch Arquimedes walking through his house. He asks his middle son Alex (Peter Lanzani) to stop watching TV and checks in on his younger daughter to tell her mom has dinner ready. Everything seems normal – a quotidian routine. Except Arquimedes then makes his way down to the basement, where a hostage is being kept inside a dingy bathroom, hooded and chained and crying for help.

The juxtaposition of a happy home hiding a dungeon of horrors is the primary focus of The Clan: How did Arquimedes and his family manage to carry on as if nothing was happening, even though there were bleeding, injured captives underneath their floorboards? Trapero, who co-wrote the script with Esteban Student and Julian Loyola, turns Alex into the audience surrogate. He’s a handsome, popular young man who works at his father’s surf shop, plays rugby and has a new girlfriend. Oh, and occasionally Alex also helps his father carry out a kidnapping, even serving up one of his rich friends as a victim.

Except Alex isn’t aware – at first – that his father has no intentions of ever returning his hostages alive, even after their families have paid their ransom. The Clan can be terrifying one moment and darkly comical the next: A long sequence depicting the kidnapping of a woman is scored to David Lee Roth’s Just a Gigolo, while another kidnapping attempt goes horribly wrong, Pulp Fiction style. Trapero brings a lush style to the film that helps to heighten the overall weirdness: If it wasn’t based on a true story, you’d write the movie off as preposterous nonsense.

Francella’s performance is too one-note to give the monstrous papa any dimension – the actor’s cold eyes never register any emotion – and the other family members are relegated to the background (the movie cries out for a scene in which Arquimedes’ wife voices how she feels about her husband’s crimes). The strained, strange relationship between father and son ultimately becomes the emotional center of The Clan, culminating with an astonishing closing shot guaranteed to induce startled gasps. It’s a great, jarring moment that is the work of a filmmaker clearly in love with his craft – and a flavor for the darker side of human nature.

By Charles Dolph
October 21, 2015

National elections on October 25th present voters with sharply contrasting visions of government’s role

On October 25th Argentines go to the polls for general elections that will shape the future of Latin America’s third largest economy. In the wake of Hugo Chávez’s death and amid increasing turmoil in neighboring Brazil, developments in Argentina take on added significance in the region.

In addition to the country’s first non-Kirchner president in twelve years, voters will choose provincial governors, senators, and congressional representatives, as well as parliamentary representatives to the South American trade bloc MERCOSUR.

Recent provincial contests resulted in victories for candidates from outgoing President Cristina Fernández de Kirchner’s Front for Victory (Frente para la Victoria) in both Chaco and Tucumán. In Tucumán, the result was disputed by opposition supporters amid violence directed at opposition candidates and allegations of electoral fraud. Despite protests involving clashes with police the result was subsequently upheld by Tucumán’s Supreme Court.

August primaries established three main presidential candidates: successor to Kirchner in the Front for Victory coalition and outgoing governor of Buenos Aires province, Daniel Scioli; dissident Peronist Sergio Massa of the Renewal Front (Frente Renovador); and mayor of Buenos Aires Mauricio Macri of center-right Let’s Change (Cambiemos). Recent polls show Scioli on the cusp of the 40% of the vote plus a 10% edge over his nearest opponent necessary to avoid an unpredictable runoff on November 22nd. However it is far behind Kirchner’s 54% tally in 2011.

The not-quite-commanding margin for Scioli is partly due to electoral realignment since Argentina’s 2013 legislative elections. His emergence as the Front for Victory candidate can be directly traced to the success of Sergio Massa’s Renewal Front. Cristina Kirchner’s cabinet chief from 2008-09, Massa openly split in 2013 to form an alliance rooted in industrialists and mayors from the province of Buenos Aires.

Massa’s coalition won crucial mid-term victories that denied Kirchner the Congressional supermajority necessary to support a constitutional amendment which would have allowed her to run for a third consecutive presidential term. The elections also revealed a gap on Kirchner’s left, as the Trotskyist Workers’ Left Front (Frente de la Izquierda y de los Trabajadores) garnered three seats in the National Congress as well as provincial and municipal legislative representatives across the country, highlighting that the lessons of Argentina’s 2001-02 uprisings have not been forgotten.

Front-runner Scioli has therefore been wooing social movements and the left wing of his own party – channeling Pope Francis’ social agenda in declaring that if elected he will create a Ministry of Popular Economy – while also seeking to attract $30 billion a year in foreign investment to make Argentina a “productive paradise.”

Electoral realignment has not only paved the way for and conditioned Scioli’s candidacy, it has drawn the opposition candidates Massa and Macri closer to each other. However it has so far stopped short of producing an outright electoral alliance between the two.

Beneath changes in the electoral landscape are deeper structural challenges confronting Kirchnerism. Economic growth boomed from 2004-10 under Néstor Kirchner and during Cristina’s first term. While critics are quick to dismiss the impressive economic growth as rooted in the dumb luck of a commodities boom – especially in soy – Mark Weisbrot of the Center for Economic Policy Research points out that soy export indicators in GDP growth do not support such a narrative.

While claims of absolute reliance on soy may be overstated, its structural impacts cannot be denied. Because soy has virtually no domestic market, its emergence as a key export allowed Kirchner administrations to sidestep the conflicts of the past over the prices of beef and wheat, products crucial both for exports and domestic consumption by urban popular sectors. Yet, the growth of soy has generated other political tensions. Its critical role in financing extensive state spending on social programs led to a standoff with agro-export interests when an increase was proposed in export taxes in 2008.

The soy boom has also fueled rising land prices and concentrated ownership in the hands of transnational corporations. This has partially offset the fiscal benefits of soy, as revenues have paradoxically funded the social programs covering the basic needs of those displaced from the countryside by its expanding production.

The resulting “agriculture without farmers” recalls the “pampas without settlers” used by historian James Scobie to describe expanding wheat production in the 19th century. Such echoes of Argentina’s agro-export past underscore the shift – common in the region – from Washington consensus structural adjustment programs to what sociologist Maristella Svampa calls the “commodities consensus” of renewed reliance on mineral extraction and export-oriented agricultural production.

As Argentina’s main source of foreign currency, soy dovetails with the other major external constraint on Argentina’s economy, namely debt. Only after a bitter 2010 dispute with the head of Argentina’s Central Bank did Cristina Kirchner secure access to the reserves necessary to pay off the sovereign debt, renegotiated after the 2001 default.

While a bumper soy crop in 2014 helped replenish the Central Bank’s foreign reserves, they remain under pressure. Economy Minister Axel Kicillof announced earlier this month that nearly $6 billion would go to pay holders of Argentina’s Boden 2015 bonds. Meanwhile, officials triumphantly declared the Boden 2015 payment “the end of a long process of dis-indebtedness” – a clear swipe at holdout “vulture funds” currently litigating in New York for full repayment of secondary market bonds purchased after Argentina’s 2001 default.

The battle with vulture funds, in particular, has become a political rallying point for Kirchner in her final year in office. The UN General Assembly recently adopted nine principles on sovereign debt restructuring triggered by the June 2014 US Supreme court decision preventing Argentina from paying creditors who had agreed to previous restructurings. While the UN principles are non-binding, Kirchner and Kicillof have touted them as a major victory, and sent them to the Argentine Congress to be drafted into domestic law.

Discussion of these structural constraints has been largely muted in the presidential campaigns. Scioli, articulating his economic plan, focused mostly on bringing inflation down to single digits without austerity, but did not mention the debt dispute. These structural issues were also largely absent from the October 4th presidential debate – the first in Argentina’s history – in which Scioli did not even deign to participate.

But economic pressures have been mounting. In January 2014, the Central Bank announced the largest currency devaluation since 2002. Facing a return of high inflation, capital flight, falling foreign reserves, and a devaluing peso, Kirchner has variously turned to currency and price controls. Such measures have met with lukewarm success, as de facto inflation has continued to rise and the “blue” or unofficial dollar hit an all-time high of 16.08 pesos in late September.

Critics of Kirchnerism point to familiar economic problems, as well as growing corruption and insecurity. Nevertheless Peronism – the political legacy of President Juan Perón who governed between 1946-55 and 1973-74 – remains the dominant political force in Argentina. Even Macri, whose political career has been based on being a gorila (Argentines’ name for non-Peronists), recently embraced Perón. Flanked by erstwhile Kirchner ally and head of the General Confederation of Labor (Confederación General de Trabajo) Hugo Moyano, Macri inaugurated a statue to Juan Perón in downtown Buenos Aires in the hope that some of the populist magic would rub off on him.

Even as all three main candidates claim the legacy of Perón, voters will decide on visions for the role of the state that clearly diverge. The divide is most glaring between Scioli and Macri, who will almost certainly be the two candidates on November 22nd should the election go to a runoff. While the former promises basic continuity with the Kirchnerist model, Macri, drawing metaphors from his days as president of the soccer club Boca Juniors, argues that the state should act only as a “groundskeeper” for the field on which private enterprise are the true players. Macri’s plan means fiscal austerity and a general return to the 1990’s economic model that led Argentina into collapse in 2001. In a second round scenario between the two, Sergio Massa would be the king-maker, strengthening his position long-term.

A victory for Scioli on October 25th or after is not guaranteed. Should he prevail he will inherit a country that has substantially recovered from its debt default and crisis of political representation that peaked in 2001-02, even as structural challenges have become apparent. This stability has consolidated under Peronism during more than a decade of Kirchner administrations. The Radical party (the Unión Cívica Radical), Peronism’s historical counterweight, has become associated with overseeing hyperinflation in 1989 and economic and political crisis in 2001. The military is thoroughly discredited. Macri’s upstart Let’s Change coalition has little reach outside the Federal Capital of Buenos Aires.

In this political landscape, the Kirchnerist avatar of Peronism appears poised between continuity and schism. Prominent human rights activist Estella de Carlotto, much to the delight of Scioli’s media critics, recently referred to him as a potential “transition” president keeping the seat warm for Cristina Kirchner to run again in 2019. However, Massa’s emergence within Peronism points to a rightward drift among a significant sector of the movement. The dominance of Kirchnerism in Argentine politics and society might, paradoxically, also be its greatest source of instability.

By Belén Marty
October 21, 2015

* Commerce Secretary Says Consumers Need Him to Stop “Deceptive Marketing”

The Argentinean government is taking greater control over the products sold in the country. As of Wednesday, October 14, Argentina’s high-profile Commerce secretary, Augusto Costa, will now be in charge of approving labels for food and beverages, as well as fragrance, personal-care, and cleaning products sold in Argentina.

Resolution 420/2015, published on Wednesday in the Official Bulletin, requires companies to present product labels and tags to the Commerce secretary in advance.

The Trade Loyalty Department will then have 15 days to decide whether or not the goods will be placed on the Argentinean market. In the event that the agency does not issue a ruling on a given product within the time frame, the item may enter the market, but will be subject to subsequent regulation.

Costa explained the government’s reasoning for the new policy with an example: He placed two Hellmann’s brand ketchup bottles side by side. On one bottle, the label read “fresh tomatoes,” and on the other, “fresher tomatoes.”

“We met with Unilever [Hellmann’s distributor] and we taste-tested each ketchup on a sausage, and they tasted the same,” Costa explained. “These are strategies that companies all over the world use to mask hikes in prices. They may not be breaking any laws, but we created this legislation to get rid of the loophole, and put a stop to this deception.”

Qué buen uso le está dando Augusto Costa a su master en la London School of Economics. Sommelier de ketchup.

— CACK (@caterinack) October 16, 2015

“What a great use of Augusto Costa’s Master’s degree from the London School of Economics. Ketchup sommelier.”

Less than 15 days away from the presidential election, Costa explained that no new personnel will be hired to perform these newly created functions.
“We will use officials already in office to carefully determine which products are the most relevant, like mass-consumption products. We will not fill the building with camporistas [Kirchner supporters], nor change the job market in Argentina.”

The resolution also prohibits companies from placing the words “sale” or “discount” on product labels. The government argues that “if the company cannot guarantee the savings will reach consumers, they should not include this message.”

According to the initiative, the Commerce Department aims “to ensure the proper execution of domestic commercial policies regarding protection for consumers and a competitive market.”

By Charles Newbery
October 21, 2015

On a street corner in Buenos Aires, “No fue magia” (“It wasn’t magic”) is painted on a wall above the initials of President Cristina Fernández de Kirchner.

The graffiti is praising what is seen as the success of Argentina’s president – and that of her late husband and predecessor, Néstor Kirchner – since the country emerged from the 2001-2002 financial crisis.

It also shows how adept the couple have been in building and sustaining a fervent following for their brand of populist left politics, known as Kirchnerism.

When Mr Kirchner took office with the (still ruling) Justicialist Party in 2003, “he vowed to lead Argentines out of hell and into purgatory. He told them they weren’t responsible for the crisis, but victims,” says Eduardo Fidanza, director of Poliarquía Consultores, a public opinion and political consulting firm in Buenos Aires.

Mr Kirchner blamed the free-market policies of the 1990s that had been prescribed by the International Monetary Fund and were advocated by the big banks and corporations. He said these policies pushed Argentina into a crisis of 25 per cent unemployment and 54 per cent poverty in the early 2000s.

In contrast, he pursued inclusive growth aimed at benefiting all members of society, not just big business, as he claimed. Recovery came quickly – and robustly. The economy grew by an average of 6 to 8 per cent each year between 2003 and 2011, and unemployment fell below 7 per cent.

Soaring international commodity prices and demand played a significant role in this recovery as Argentina is one of the world’s leading suppliers of beef, corn, soybeans and soybean derivatives like soy oil.

Mr Kirchner helped fuel exports, chiefly by keeping the exchange rate undervalued. The export boom fattened central bank reserves and brought budget and trade surpluses.

Through the good times, the Kirchners put a focus on culture, labour and the poor, as well as addressing Argentina’s difficult past. They reopened the trials into state torture during the 1976-83 military dictatorship, ramped up state funding for film and television programming, and made football free to watch on TV. Same-sex marriages were legalised. They created child and pregnancy subsidies to help the poor through the crisis, and nationalised Aerolíneas Argentinas, the national airline and YPF, the national oil company. And unions regained their collective bargaining powers, which help to boost wages and pensions.

All of this instilled a sense of stability after so many years of volatility, making the Kirchners “appear as the saviours of Argentine society,” Ana Wortman, a cultural sociologist at the University of Buenos Aires, tells Equal Times. This won them widespread support from Argentina’s middle class, not just the poor and working classes.

Cristina Fernández succeeded her husband in 2007 with 45 per cent of the vote, and won re-election in 2011 with an unprecedented 54 per cent, helped by sympathy for her husband’s death in 2010.

Now 62, Cristina will leave office on 10 December 2015 with a 40 per cent approval rating, rare in a country where most second terms – and some firsts – end in crisis.

Amongst her supporters, Cristina has “a quasi-religious status for saving Argentina from catastrophe,” Wortman says.

Economic woes

Her presidency, however, brought a change to the Kirchnerism model that could be its undoing. Cristina aggrandised her husband’s message. It was no longer about reaching purgatory; it was about remaining in heaven, living in abundance and not accepting austerity, Fidanza says.

The first years of recovery came without many hitches as factories used their neglected capacity after the economic crisis to meet rising consumer demand. But investment didn’t keep pace, due to currency controls, price caps, protectionist trade policies, heavy regulation and other interventionist measures that cut profit potential and made it harder to do business.

Inflation soon hit double digits and peaked at 40 per cent in 2014, before coming down to 27 per cent this year as a slowing economy cut demand. Blackouts and petrol shortages worsened, and infrastructure creaked. Fifty-one people died in a train crash in 2012 after a series of derailments.

“The economic model is unsustainable,” says Eduardo Levy Yeyati, an economist and author of Porvenir, an exploration of future development models for Argentina. “We’re squeezing the last drops of lemon so that people have the feeling of wellbeing.”

The government is running a 6 per cent budget deficit on track to reach 8 per cent in 2016. Shrinking dollar reserves are making it harder to service the national debt and pay for essential imports like energy and food. Manufacturers get dollars in rations for importing equipment and parts, slowing their output. Companies can’t readily send profits abroad, putting a damper on investment. Argentina can’t borrow abroad to ease the strain until a US$100 billion default from 2001 is fully settled, and hiking taxes any further could spark protests like a four-month farm revolt in 2008. Or it could turn more union bosses against Kirchnerism, and deepen a polarisation between its followers and opponents.

Presidential election

The hard times are expected to run through to 2016, a forecast that would mar any party’s chances to retain power.

However, that’s not the case for Kirchnerism. The ruling Justicialist Party candidate, Daniel Scioli, is ahead in the polls for the 25 October general election.

A former vice president of Mr Kirchner and the current governor of Buenos Aires, Scioli, 58, has a 10-point lead on Buenos Aires Mayor Mauricio Macri, a 56-year-old conservative businessman. In third place is Sergio Massa, 43, a congressman and former chief of cabinet for President Kirchner.

All three are more moderate than President Kirchner, and there’s a consensus amongst them that adjustments must be made to rekindle growth, says Levy Yeyati.

This includes settling the defaulted debts, addressing an overvalued exchange rate, cleaning up bogus economic data, scrapping capital controls, cutting inflation and slashing subsidies to rein in the budget deficit.

Such steps are expected to attract what has largely eluded Kirchnerism: foreign investment. But the initial cost is likely to be job losses, higher utility rates and lower purchasing power.

“It was one thing to take the country from hell to purgatory, and another to take it from heaven to purgatory,” says Fidanza.

The belt-tightening won’t come easy. There will be the threat of strikes no matter who becomes president, says Norberto Galasso, a historian and author of Kirchnerism (2003-2015): The Project that Transformed Argentina.

Argentines have grown used to welfare and advancement under Kirchnerism, from buying new cars to sending their children to university for the first time, he says.

“Many people want the model to continue no matter the difficulties”.

For this reason, Galasso believes, Cristina has fielded a close confidant, Carlos Zannini, as Scioli’s candidate for vice president. Zannini, 61, will keep Scioli in check and maintain Cristina’s influence to run for president again in 2019.

“Cristina is a fighter for her convictions,” he says. “I don’t see her dedicated to caring for her grandchildren. She will continue to be an influencer.”

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By Jonathan Gilbert
23 October 2015

BUENOS AIRES — As Argentina prepares for a new president, a glimmer of hope has emerged that a ferocious standoff with American hedge funds may be resolved within months.

On Sunday, Argentines will vote on who will succeed President Cristina Fernández de Kirchner. The front-runner, Daniel Scioli, has at times shared her taste for fiery populist oratory.

Nonetheless, if elected president, he is expected to quietly seek a compromise with the hedge funds over nearly $100 billion of bonds that Argentina defaulted on in 2001.

”It’s very important to close out the holdouts issue,” said Gustavo Marangoni, an economic adviser to Mr. Scioli. ”It’s like a pebble blocking a funnel of investment.”

The standoff has kept the country locked out of global lending markets. Mrs. Kirchner has maneuvered to reach the end of her presidency without the need to return to those markets, but a new leader would need access to help rectify Argentina’s economy, analysts said.

”Whoever wants to govern Argentina needs a country with access to capital markets,” said Federico Thomsen, an economist based in Buenos Aires.

That will mean ending the feud with the hedge funds, often referred to as holdout creditors — or ”vultures,” in the words of Mrs. Kirchner’s government — led by a unit of the billionaire Paul E. Singer’s firm, Elliott Management.

The impasse dates to 2012, when Judge Thomas P. Griesa of the Federal District Court in Manhattan ruled that Argentina could not service the debt it restructured in the years after its 2001 default if it did not pay the litigating holdout creditors, in full, at the same time.

Argentina refused to accept the ruling, earning rebukes from Judge Griesa. Even facing the judgment of a United States federal court, Argentina issued dollar-denominated bonds this year under local law, but it had to pay premium interest rates of 8 to 9 percent. This angered the holdouts, who claim the new debt was marketed internationally and therefore subject to Judge Griesa’s ruling.

Mrs. Kirchner, 62, who is not permitted to run for a third consecutive term, has led a crusade against the hedge funds, accusing them of extorting her government.

Polls here suggest that Mr. Scioli could win on Sunday without the need for a runoff. His closest challenger is Mauricio Macri, a former businessman and soccer club president who has traditionally been viewed more favorably by investors. Mr. Macri has said that he would negotiate with the holdouts.

Yet politics colors these positions. Mr. Macri’s statements appear to have been intended as just criticisms of the government. In interviews, Mr. Macri’s economic advisers said they would let the issue languish and straighten out the economy by addressing other problems.

”I don’t think it’s life or death for Argentina,” said an adviser, referring to resolving debt dispute.

And on the campaign trail, Mr. Scioli, having been endorsed by Mrs. Kirchner, has been nearly as aggressive as the president in calling for a ”world without vultures.”

Mr. Scioli, a former powerboat racer turned state governor, indicated that he would not improve on the terms agreed to by a majority of bondholders in debt swaps in 2005 and 2010. They received about a 65 percent ”haircut” with some deals enhanced by payments pegged to Argentina’s growth rate. That is an offer that the hedge funds have already rejected.

”Argentina’s proposal is clear,” Mr. Scioli, 58, told reporters recently, smoking a cigarillo on the sidelines of a boxing match at a sports club he built next to his home in the Paraná River delta. ”We have to see now if they have the willingness to adapt to what Argentina has been offering.”

Mr. Scioli’s reliance on Mrs. Kirchner ”means he cannot address these issues publicly,” Nicholas Watson, who analyzes Argentina for Teneo Intelligence, a global advisory firm based in New York, wrote in a note to clients.

But if Mr. Scioli wins the presidency, he is expected to forge his own path, independent of the ideological constraints of Mrs. Kirchner’s leftist political movement, known as Kirchnerismo.

”Kirchnerismo is over,” said an adviser to Mr. Scioli who spoke on the condition of anonymity. ”Soon enough, they’ll realize.”

Mr. Marangoni and Mario Blejer, another adviser, said that Mr. Scioli’s government would reinitiate talks that have long been at an impasse.

”I’m in favor of opening negotiations with a very firm stance,” Mr. Blejer said in an interview.

A third adviser, Miguel Bein, who could not be reached for comment, said at a conference in May that Argentina might pay up to 70 percent of the roughly $1.7 billion owed to the holdouts, a sum that includes interest.

That may not be enough to satisfy the holdouts, who have asked for nothing less than the full $1.7 billion.

Mr. Scioli is expected to make other changes in economic policy, including reducing monetization of the fiscal deficit to calm inflation, which is estimated at more than 25 percent, and a gradual devaluation of the peso that could help lure foreign investment and boost competitiveness.

These will require tapping global bond markets to bring in dollars, said Jimena Blanco, who monitors Argentina for Verisk Maplecroft, a risk analysis firm in London.

In the short term, the country may also need those dollars to bolster the central bank’s reserves, which dropped far below $30 billion this month after the government paid off $5.9 billion of maturing bonds.

Although many economists agree that Argentina should end the dispute with the hedge funds so it can bring in dollars by issuing debt abroad, others offer another argument: that the country can talk but delay a deal until the hedge funds cede ground and, in the meantime, attract big foreign investment or even issue debt.

Another presidential candidate, Sergio Massa, 43, an energetic lawmaker who bolted from Mrs. Kirchner’s party in 2013, supports this approach.

Mr. Massa said he would seek to strengthen his negotiating position with the holdouts by first returning to debt markets, using risk mitigation instruments offered by regional development banks to issue bonds at around half the rate investors currently demand.

”Argentina cannot go to Griesa’s bench and surrender,” Mr. Massa said at a lunch with reporters.

If the government reaches a settlement in the coming months, it could still have trouble raising money if it does not also make repairs to its economy, said Siobhan Morden, head of Latin America strategy at Jefferies in New York. She cited Argentina’s fiscal deficit, which is estimated at about 7 percent of gross domestic product, and the precariousness of the central bank’s reserves.

”Does legal access to the markets mean market demand?” Ms. Morden said. ”No. The markets aren’t lenders of last resort.”

By Frederick Bernas and Diane Ghogomu
23 October 2015

BUENOS AIRES — Election season in Argentina is heralded by images of smiling candidates, gazing down from billboards and up from fliers distributed by zealous volunteers. Many names strike a familiar chord with voters, but this year an unfamiliar face suddenly materialized, drawing millions of eyes: Omar Obaca.

”Who knows, he might turn out to be another Obama,” said Laura Buccafusca, 67, a well-coiffured retiree who was walking her dog in the Congreso area, reflecting on the American president’s relatively high popularity here.

But Omar Obaca has no chance of winning. Indeed, he is not even running. He is a fictitious African-Argentine candidate, dreamed up by an advertising company to satirize Argentine, and perhaps American, politics, and setting off a whirlwind in the process.

The comedy campaign has exploded into an Internet sensation, channeling a desire for change after more than a decade of one-family rule — and igniting a fierce debate here over the ways in which black people are portrayed in a society that has long prioritized its ties to Europe.

The billboards advertise an online video series that has drawn more than seven million views. Some of the episodes showcase farcical policies like ”Everyone Dressed as Police” to reduce street crime; paying Argentina’s national debt to China with caramel candy; or rigging the weak Argentine peso to a fantastically strong exchange rate of four American dollars.

”Obaca is the politician that all politicians want to be, but they can’t — because they don’t have ideas and they’re not black,” said Sebastián Rodas, a director at NAH! Contenidos, the advertising company behind the project. ”We’re making fun of the idea that someone can use their color to market themselves in a political campaign. He has proposals, but the first thing is: ‘I’m black, I look like Obama. Maybe that’s good. Vote for me!”’

Some Argentines of African origin have expressed excitement at seeing one of their own in the limelight.

”It gives me hope to see an Afro-descendent as protagonist — this is the first time an Afro actor has had a mass audience,” said Paulo da Silva, 27, an African-Argentine actor whose family left Brazil for Buenos Aires when he was 3. ”For every 10 roles that exist for a white person, there is one for a black person.”

But some leading activists counter that Obaca revives old stereotypes. The newspaper Pagina 12 recently published a scathing op-ed that accused the campaign of ”resorting to one of the oldest traditions of aristocratic families of yesteryear: the black buffoon.”

Its author, Federico Pita, president of the African Diaspora of Argentina, wrote that ”naturalization of racism and white supremacy” had allowed a character who ”ridicules, stereotypes, stigmatizes” to gain huge popularity.

Carlos Álvarez, president of a group called Agrupación Xangô, said that community members had filed a complaint with the National Institute Against Discrimination, Xenophobia and Racism. He called Obaca a ”vulgar” stereotype of a ”happy black guy to liven up the party,” exemplifying ”structural racism.”

The advertisers at NAH, who are generally dismissive of criticism of the campaign, said they were fascinated by the campaign that swept Mr. Obama to victory in 2008, including its groundbreaking social media strategy.

”Political marketing is totally fake, but the first Obama campaign was very genuine,” Mr. Rodas said. ”They didn’t fear doing things differently.”

The actor who plays Mr. Obaca, Marcos Moreno Martínez, grins and radiates an easy charisma, talking in local slang with emphatic hand gestures that evoke his theatrical background.

He got the call for what he described as ”just another casting” in 2010 and was instantly selected for a pilot episode, filmed on the spot. NAH had intended to produce the Obaca series for elections in 2011, but no buyers emerged until the online channel FWTV came forward last year.

Months later, Mr. Martínez, 38, said he felt like a ”star” every time he stepped onto the streets of Buenos Aires, as steady streams of fans request selfies by his side.

”It never ceases to surprise me,” the actor said. ”Kids in other provinces see me, even when I’m not dressed as Obaca, and say, ‘What a genius, I’ll vote for you!”’

He was previously known for playing an inmate in ”Tumberos,” a successful TV drama about corruption and prison life during tough times after Argentina’s 2001 financial crisis.

That led to film and theater roles, but Mr. Martínez needed more income. Like some other struggling actors, he worked as a taxi driver for several years, before selling his car to invest in materials to build a small house that he now rents out. He lives in the provincial city of Luján, about 42 miles from Buenos Aires.

”Nobody ever gave me anything,” he said, recalling the years of crushing three-hour commutes from his home into the capital, where he attended theater classes as a university student. As well as acting, he plays percussion in a Latin dance band and runs music workshops at a school in his neighborhood.

”Obaca arrived at a moment with a lot of political violence,” Mr. Martínez said, describing a polarized atmosphere that breeds social tension.

”People needed to laugh at a fictional politician who promises an Argentina that will not happen,” he added. ”That’s why they get on board with the Obaca dream.”

On Sunday, national elections will bring an official end to 12 years of ”Kirchnerism,” the political movement named for the late president, Néstor Kirchner, who was married to — and succeeded by — the incumbent, Cristina Fernández de Kirchner.

After winning four-year terms in 2007 and 2011, she is constitutionally barred from seeking a third consecutive term.

Although some in Argentina say the country is ready for a political shift, continuity is expected. The front-runner, Daniel Scioli, is a former vice president who has been governor of Buenos Aires Province since 2007 and was endorsed by Mrs. Kirchner.

”None of the candidates has been able to generate a perception of something new,” said Philip Kitzberger, a professor of political science at Torcuato Di Tella University.

But critics contend the Obaca campaign comes at the expense of Argentina’s small black population. Argentina’s 2010 census reported that about 150,000 (or just 0.4 percent) of its 40 million people considered themselves ”Afro-descendent” — an ethnic category that was reinstated after more than 130 years of not appearing on the survey.

Erika Edwards, an assistant professor of Latin American history at the University of North Carolina in Charlotte, said that such a tiny number was probably an underestimate. Argentina’s first census showed that blacks made up about a third of the population in the late 18th century, with most arriving as African slaves. But a huge European immigration, specifically called for by the first Argentine laws, shifted the country’s demographics.

”Miscegenation and racial mixing were actually encouraged under the guise of ‘blanqueamiento’ — the concerted whitening of the nation,” Dr. Edwards said.

In the mid-19th century, Domingo Faustino Sarmiento, revered as the father of education in modern Argentina, announced the ”extinction” of African-Argentines at a time when the black community still published its own newspapers in Buenos Aires.

Despite such assessments, African-Argentines like José Agustín Ferreyra, a prolific filmmaker, and Oscar Alemán, a versatile musician who played jazz with Louis Armstrong, gained recognition in their fields. But African-Argentines still say such accomplishments are neglected.

Mr. Martínez defended his character in the Obaca campaign, contending that there were ”much worse things” than a black politician in a suit who is broadly admired. ”I was asked to play delinquents, thieves or drug dealers so many times that one day I decided to never accept that again,” he said.

By Benedict Mander in Buenos Aires
October 23, 2015

Sensational allegations of drug trafficking have done little to dent Aníbal Fernández’s chances of becoming the governor of Buenos Aires, the second-most powerful political office in Argentina.

But they may have a knock-on effect on the presidential poll also taking place on Sunday, dragging down his Peronist ally, the presidential candidate and current governor of Buenos Aires province Daniel Scioli.

In order to secure a comfortable nationwide victory, the centrist Mr Scioli needs a candidate in the populous province who can win by a much wider margin than Mr Fernández.

Shocking accusations that Mr Fernández masterminded a series of grisly murders in order to take control of an ephedrine trafficking ring — his alleged alias was “the Walrus” on account of his bushy moustache — have contributed to him becoming a “lead life jacket” for Mr Scioli’s electoral performance, says Carlos Germano, a political analyst.

“In the 32 years since Argentina regained democracy, I have never seen an election this close,” says Mr Germano.

The allegations, widely reported in Argentina, have been made by a convicted gangster from prison and have been dismissed by Mr Fernández as a political smear driven by opponents and elements of the media.

The presidential contest is hugely important for Argentina, as it determines the pace and scope of reform needed to turn around one of Latin America’s largest economies.

It will also determine whether Peronism — the political movement that has controlled the country for most of the last 70 years — remains in power after 12 years of populist rule by president Cristina Fernández de Kirchner and her late husband and predecessor, Néstor Kirchner.

Daniel Scioli
Buenos Aires governor and presidential candidate for the ruling Frente para la Victoria (Front for Victory) party, Daniel Scioli, waves during a rally in Quilmes, Buenos Aires Province, on October 20, 2015. Argentine will hold general elections on October 25, in which for an outright winner the candidate needs 40 percent of votes and a 10-point lead ahead of the runner-up. Otherwise, it will head to a runoff on November 22. AFP PHOTO / EITAN ABRAMOVICHEITAN ABRAMOVICH/AFP/Getty Images
Born into a middle-class family, Daniel Scioli first distinguished himself when he negotiated his kidnapped brother’s ransom and release from leftwing guerrillas when he was just 18. But it was his sporting career that brought him fame. After losing his right arm in a powerboat racing accident in 1989, he went on to win several world championships over the next decade. After being elected to congress in 1997, Néstor Kirchner chose him as his vice-president in the 2003 elections.

Mr Scioli’s main rival is the centre-right Mauricio Macri, the market-friendly mayor of the city of Buenos Aires campaigning for change.

Most polls show Mr Scioli within a hair’s breadth of winning 40 per cent of the vote, with Mr Macri polling at close to 30 per cent, making the election too close to call due to polls’ statistical margin of error. Although no pollster disputes that Mr Scioli will win the most votes on Sunday, there is little consensus over whether he will gain enough to avoid a more unpredictable run-off vote on November 22. In order to win outright, contestants must gain 45 per cent of the vote or 40 per cent with a ten-point lead over the runner-up.

Although Mr Scioli is the would-be successor of a president leaving a deeply toxic economic legacy — including a fiscal deficit of about 7 per cent, net foreign exchange reserves of less than $10bn and one of the highest inflation rates in the world — paradoxically most voters see him as the candidate best placed to fix these problems. “Corruption is always an issue, but it won’t define the elections — a bit like education. The fundamental issue here is the economy,” says Mr Germano.

Many Argentines are still suspicious of the “neoliberal” economic policies characterising the 1990s that they fear Mr Macri would resort to in order to kick-start the economy.

And such is the huge sway of Peronism — a political philosophy whose tenets vary according to who fronts it — that Mr Macri attempted to woo undecided Peronist voters by unveiling a statue of the working class hero, Juan Perón, in a square in the city of Buenos Aires.

Mauricio Macri
Presidential candidate Mauricio Macri speaks during a rally in Lanus, on the outskirts of Buenos Aires, October 21, 2015. The Argentinian ruling party’s candidate Daniel Scioli is primed to win the presidential election outright on October 25, with a commanding lead over his nearest rivals, two polls published in local papers on Sunday showed. His closest rival, Macri, the center-right mayor of Buenos Aires city, is seen getting 28 percent of the vote in the election, according to the poll. REUTERS/Marcos Brindicci
The son of a powerful Italian business magnate says it was a 12-day kidnapping ordeal at the hands of corrupt police officers in 1991 that convinced him to go into politics. First, though, he spent a decade running popular football club Boca Juniors. He turned to politics in 2003 and later became a congressman before being elected in 2007 as mayor of Buenos Aires.

Meanwhile, Sergio Massa, the dissident Peronist candidate in third place with around 20 per cent of support, is further complicating Mr Macri’s presidential bid by attempting to persuade voters that he has a better chance of defeating Mr Scioli in a second round vote.

Indeed, it is Argentina’s divided opposition that cleared the way for the Kirchner couple’s self-styled “victorious decade”, which saw the economy’s revival after a devastating crash in 2001. Since then, the Radical party in power at the time, which has traditionally been Argentina’s other main political group, has never recovered the population’s confidence.

Nowhere is the outcome more unpredictable than in the province of Buenos Aires, whose 17m population represent 38 per cent of voters.

Traditionally a Peronist heartland due to its largely working class population, Mr Fernández’s rival from Mr Macri’s “Let’s Change” coalition, María Eugenia Vidal, has soared in polls amid the drug allegations. Mr Fernandez still, however, looks likely to win.

“In a normal country, Vidal, a fresh-faced, experienced politician with no corruption smudges and a reputation as a skilled administrator, would be a shoe-in in an election where she is competing with an old-style Peronist who has been battered by purported links to drug trafficking,” says one jaded observer.

“It’s a very volatile situation,” says José Octavio Bordón, a former presidential candidate and provincial governor.

He argues that although voters are discontent, the absence of a crisis situation like in 2001 means that some 15-20 per cent of voters remain undecided, with “none of the presidential candidates inspiring either great enthusiasm or great fear”.

“The coin has been tossed, but it’s still in the air,” he says.

October 24, 2015

And the beginning of saner economic policies, perhaps.

FIRST, she thrust her finger skyward. Then came a right-left combo, punctuated with an eruption of hip swaying. Beside her with a rigid smile stood Daniel Scioli, the governor of Buenos Aires province and presidential candidate, looking like a child mortified by the antics of his mother. The campaign rally, held earlier this month, was meant to be for him, but the outgoing Argentine president, Cristina Fernández de Kirchner, stole the spotlight.

For the last time, Mr Scioli hopes. On October 25th Argentina will hold the first round of elections to choose a new president, along with half the lower house of Congress and a third of the Senate. They will bring to an end 12 years of government under Ms Fernández and her husband, Néstor Kirchner, who died in 2010. The main question to be settled is how much continuity there will be with the Kirchners’ populist and divisive rule. Mr Scioli is running as Ms Fernández’s heir, under her Peronist party, the Front for Victory (FPV), yet hopes to be his own man. His main rival, Mauricio Macri, the mayor of the city of Buenos Aires, leads an electoral coalition called Cambiemos, “Let’s Change”.

Argentina needs change. As Ms Fernández slips out of office the economy is starting to crumble. Currency controls and trade restrictions, which she imposed in 2011, are choking productivity; inflation hovers at around 25%. The budget deficit is swelling and foreign-exchange reserves are dwindling. Argentina cannot seek external financing until it ends its standoff with creditors who rejected a debt-restructuring plan. Unless the new president quickly reverses Ms Fernández’s populist policies, a crisis is inevitable.

Few Argentines know that yet. Many credit the Kirchners with rescuing the economy from a slump in the early 2000s and for the growth that ensued (which owed a lot to high prices for soy beans, the biggest export). They were open-handed leaders: 40% of the population receives a pension, salary or welfare from the government, a share that has doubled since Ms Fernández took office in 2007. Among recent presidents, only her husband left office with higher approval ratings.

That is why Mr Scioli subjects himself to awkward appearances with her. Recent polls suggest that he is close to the threshold needed for victory in the first round: 40% of the vote with a lead of ten percentage points over his nearest competitor. Mr Macri’s lacklustre campaign has been hurt by corruption allegations against a congressional candidate from his coalition. He splits the anti-Fernández vote with Sergio Massa, a feisty Peronist who left FPV and is third in the polls. If Mr Macri can force a second round, to be held on November 22nd, he might beat Mr Scioli by picking up Mr Massa’s votes. Poliarquía, a polling group, puts support for Mr Scioli in a run-off at 49%, with Mr Macri at 45%.

Whoever wins will have to disappoint voters. To restore competitiveness and open production bottlenecks the next president will have to allow the peso to depreciate and lift restrictions on exports and imports. The gap between the official value of the peso and the “blue-dollar” (ie, free-market) rate has widened to around 70%. Subsidies will have to be cut to narrow the budget deficit, expected to be about 6% of GDP this year (see chart). The central bank is likely to raise interest rates to force down inflation. That may trigger a recession. To have any hope of attracting international capital Argentina will have to strike a deal with its hated creditors.

Mr Scioli hopes that both kirchneristas and their foes will see in him what they want to see. The country can solve its economic problems with “no [fiscal] adjustment, no mega-devaluation and no [economic] shrinkage,” he told The Economist. Any measures will be “gradual”. An inflow of dollars will keep the peso strong. “There will be joy,” he promises.

Mr Macri is more market-minded than Mr Scioli and does admit that the peso will have to devalue. But he also downplays the hardship to come. That said, the front-runners have more in common with each other than they do with Ms Fernández. They are less confrontational and have gathered impressive teams of advisers to whom they listen and delegate. Each is eager to repair Argentina’s strained relations with the United States. Both want to attract investment, relax trade controls and resolve the debt standoff.

What distinguishes Mr Macri most is his determination to break with the Peronist practice of aggrandising presidential power at the expense of other institutions. Ms Fernández enfeebled Congress, the central bank and the official statistics agency, which she stopped from reporting bad news. She undermined the independence of the press and had a go at the judiciary. Mr Macri’s advisers say he would build up institutions with the power to check the presidency. He “will do a real shock to recover the institutional credibility of the country very fast,” promises Federico Sturzenegger, a pro-Macri congressman.

The risk, though, is that Mr Macri might not be able to do much of anything. If elected he will lack a majority in both houses of Congress. At most, two of Argentina’s 24 governors will be his allies. His campaign manager, Marcos Peña, insists that he overcame similar hurdles as mayor of Buenos Aires. But managing a rich city is far different from governing a fractious country of 40m. The two non-Peronist presidents since the military dictatorship ended in 1983 were both forced out of office early.

Mr Scioli has a different worry: that Ms Fernández will continue to upstage him after she leaves the presidency in December, especially if the economy runs into trouble. Many congressmen are loyal to her, as is his likely successor as governor of Buenos Aires province, the country’s most populous. Ms Fernández has said little about her plans, but the song that set her dancing may provide a clue: “A thousand years can pass, you will see a lot fall down. But if we stick together, they won’t hold us back.” It did not sound like a farewell.

October 24, 2015

The front-runner promises continuity. The country needs change

FOR eight years Cristina Fernández de Kirchner has beguiled, enraged, entertained and divided Argentines. She is one of Latin America’s most popular presidents, but her combative style has alienated some of her citizens and much of the outside world. Constitutionally unable to run again in Argentina’s general elections, the first round of which takes place on October 25th, she will be succeeded by a duller figure. The two leading candidates to replace her, Daniel Scioli of her Peronist Front for Victory and Mauricio Macri, Buenos Aires’s mayor, have none of her pizzazz. But either would be a great improvement.

True to her Peronist pedigree, Ms Fernández has hoarded power and suppressed dissent. She has bent the central bank to her will, muzzled the government’s statistics institute and bullied the media. She has tried, less successfully, to suborn the independence of the judiciary.

She leaves an economy in even worse shape than it looks. Like other commodity producers, Argentina is suffering from falling prices for its exports. To this, Ms Fernández has added woes of her own making. The government keeps the peso overvalued. It taxes soybeans and other exports, thereby punishing the country’s most competitive producers. It has repelled foreign capital by defaulting on debt and refusing to settle with its creditors. To husband foreign exchange, it restricts imports. Ms Fernández distracted Argentines with lavish spending on welfare and energy subsidies. That trick will not work for much longer. The country is in danger of running out of reserves; the budget deficit this year is likely to be 6% of GDP; inflation is estimated at 25%; and growth is absent.

The next president will need to escape disaster. That will mean letting the peso fall, reducing subsidies and ending the stand-off with creditors. In the short run, the volte face will hurt. Spending cuts, plus higher interest rates to contain inflation, are likely to push the economy into recession. Only as exports pick up and capital flows back will confidence, and growth, gradually return.

All the main presidential candidates would change the economy’s course, though it is hard to tell from their campaigns just how they would go about it. Running as Ms Fernández’s heir, Mr Scioli suggests that he does not need to make abrupt changes. Despite being a speedboat racer in his youth, he wants to change the economy’s course only gradually. Sergio Massa, a Peronist who has fallen out with Ms Fernández and is running third in the polls, is somewhat more forthright about the need for adjustment. But it is Mr Macri, an economic liberal, who comes closest to admitting the scale of the problem. He acknowledges the need for a big devaluation and seems readier than his rivals to remove capital controls.

Choose Macri-economics
That is one reason to prefer Mr Macri to his two Peronist rivals. The other is the prospect that he would undo the damage Ms Fernández has inflicted on Argentina’s politics. His team promises an “institutional shock”, a change of practice that would make the presidency more accountable and strengthen other bodies, including the central bank and the judiciary. That is the sort of change that Argentina needs if its democracy and economy are to mature.

It will not happen under Mr Scioli. His defenders say that he will be better at dealing with Congress, which will be dominated by his allies. The others, they say, will get nothing done. That is a risk. But the risk of obstruction is a bad reason to pick a second-best president. Argentines should choose Mr Macri.

Oct 22, 2015

The Economist meets the front-runner in Argentina’s elections

ON OCTOBER 19th, Daniel Scioli, the governor of Buenos Aires province, who is the front-runner in Argentina’s presidential election, granted an interview to The Economist. The first round of the election is to be held on October 25th.

As he ate pastries, called supporters and smoked a mini-cigar, here’s how he answered The Economist’s questions. The interview is edited and translated from Spanish.

THE ECONOMIST: Before we start, we wanted to thank you for having us here and giving us this interview.
DANIEL SCIOLI: International relations and the international media will always have room in my agenda.

TE: What would the first 100 days of your presidency look like?
DS: Our agenda is one of the development of the country, which includes accelerating everything that has to do with investment, the energy sector, incentivising the repatriation of capital, gradually addressing inflation, competitiveness of regional economies, subsidies. Always prioritising having a strong internal market.

TE: Could you be a bit more specific?
DS: The country is already stable. No shock or comprehensive economic package is needed. What people see in me is a calm, trustworthy person who can successfully carry out an agenda of integration and foment production. We want to produce more in the energy sector and agricultural sector, and do more in science, technology, tourism and sustainable mining. We want normality. Not to mention, the new president will assume office right when the vacation season begins.

TE: So you’re saying things will be tranquil? Historically, December has been quite rife with conflict and wage strikes.
DS: There will be joy about the fact that all is good—peaceful holidays. With a lot of optimism.

TE: You have said that you want to keep the exchange rate regulated. How do you plan to do that?
DS: A responsible administration of the Central Bank. The peso won’t weaken because, as more dollars enter the country, which will happen, there won’t be any problem. Both exchange rates [the official rate and the free-market “blue dollar” rate] will converge.

TE: And where will the dollars come from?
DS: Exports, repatriation of capital, swaps, for example the one with China, accords with Brazil, international credits from the Inter-American Development Bank, World Bank, Latin American Development Bank.

TE: Recently you called the holdout creditors [who refused a debt restructuring plan put forward by Argentina] “vultures”. Does this mean we can expect you to follow the same hard line with them that Cristina Fernández de Kirchner [the current president] has?

DS: Everyone calls distressed investment funds that. Argentina has the will and the capacity to pay. But we want to do it in just and equitable conditions. And conditions that are sustainable for the country. We are not closed, but we also aren’t going to pay what they’re looking for because it’s disproportionate with respect to what we agreed to with the rest of our creditors. The idea is to look for a settlement with the terms that the rest of the creditors agreed to. That is the position that Argentina currently is taking. The problem is there’s another candidate going around saying he wants to pay the holdouts everything they are asking and so they’re waiting eagerly to see who wins the elections. The truth is that it is a speculation that won’t come to fruition. But beyond the holdout issue, Argentina is going to continue growing, continue developing, and it won’t have any problems–either in attracting investments, or dollars—no problems.

TE: What measures do you plan to implement to increase confidence?
DS: I will make decisions that will generate growing interest in Argentina. They will all be reasonable, gradual, inspire investment and create a very good business environment. That’s how I work.

Jorge Telerman, Mr Scioli’s campaign chief: The Economist knows about the conference you participated in with investors the other week. There must have been $15 billion at those tables. And what was the mood?

DS: You mean, did people like me?
JT: Yes, they loved you.

DS: I was the candidate to make the best impression and I went in jeans and sneakers.
TE: What do you plan to do to reduce the fiscal deficit, which is expected to reach 6% of GDP this year?
DS: Seek economic efficiency. Streamline state companies, make sure subsidies are only being granted to those who need them and seek investment. Even Cuba is saying it’s time for economic sustainability. Even Raúl Castro is saying that. We’ll have an efficient environment. There will be no [fiscal] adjustment, no mega-devaluation and no [economic] shrinkage, because that generates social consequences.

TE: Your advisors say you want to lower inflation, which is now 25% and is predicted to rise next year, to a single-digit level in four years.
DS: We’re going to do it before that.

TE: How?
DS: Investment and increasing productivity in the fields of science, technology and logistics.

TE: The other day Ms Fernández said that the “project” must continue…
DS: The project has certain core elements: industrialisation of the country, decreasing the country’s debt burden, recovering YPF [the state owned oil company] and the railroads and implementing social programs.

TE: So you will not continue with all elements of Ms Fernández’s model?
DS: The demands of a society are always evolving.

TE: And Ms Fernández? It is the first time in recent history that an Argentine president is leaving office with such high popularity ratings. What role will she have after her term ends on December 10th?
DS: It’s great that she’s so popular—great for the country and for her. Her political experience should not be underappreciated. I like to consult everyone.

TE: And will she retain power? A lot of people are very loyal to her.
DS: But she’s part of the project. She’s part of our political team. It’s not us and them. We’re all part of the same political project. There have been
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21 octubre, 2015

FRIDAY, October 9th






By Andre F. Radzischewski Special to the Washington Times
Thursday, October 8, 2015

BUENOS AIRES | Charismatic and canny, Pope Francis has forged close ties with global power brokers and is said to have swayed President Obama’s views on tough issues such as Cuba and Syria.

But the pontiff has also found time to meddle in the day-to-day politics of his native Argentina — and may have played a behind-the-scenes role in preventing the premature departure of President Cristina Fernandez, his one-time nemesis.

Following the mysterious death of a prosecutor who had indicted Mrs. Fernandez on conspiracy charges, Francis in January stepped in forcefully to keep the president from being deposed in a “soft coup,” The Washington Times learned from a close personal friend of the pope.

Local magnates had plotted to seize the moment and oust the president after Alberto Nisman was found with a gunshot wound to his head hours before he was due to testify on a supposed top-level cover-up of Iran’s suspected involvement in the 1994 bombing of a Jewish community center in Buenos Aires.

But through calls and intermediaries, Francis persuaded “the right people at the right moment” to let Mrs. Fernandez serve our her second term, set to expire Dec. 10, Gustavo Vera, a Buenos Aires legislator and social activist who maintains a close friendship with the former Cardinal Jorge Bergoglio, said.

Worried that such an ouster might be followed by a large-scale devaluation of Argentina’s currency — a measure that would have disproportionately affected the poor — “Francis intervened strongly so that the constitutional continuity [would] be respected,” he said.

Helping a democratically elected leader finish her term should amount to “common sense for any Argentine,” Vatican protocol official Monsignor Guillermo Karcher, a close Francis confidant, said in an interview from Rome.

Monsignor Karcher would not comment on the specifics of the January incident. But the pope has never shied away from involving himself in local politics, a trait highlighted during last month’s visit to the United States, where he weighed in on hot-button topics from immigration to capital punishment and met with Kim Davis, the controversial Kentucky county clerk briefly jailed for refusing to issue marriage licenses to same-sex couples.

The pope respects secular institutions and does not mean to interfere in the affairs of sovereign nations, Monsignor Karcher said. Still, Francis “does speak out on important topics,” he said. “He does not have prejudice against anybody. He speaks with one [side] and the other,” the Vatican official added when asked about the Davis encounter.

The boldness of his pontificate, though, may be felt strongest in his native Argentina, where Francis is said to have pulled strings in day-to-day politics a number of times, even though he has yet to visit his native land in the 2 years since his surprise selection as pope.

In January, he seemed to back the nomination of a young jurist to the Supreme Court, an effort that eventually failed because of the candidate’s inexperience. Some analysts say Francis may even have led Mrs. Fernandez to anoint Buenos Aires Gov. Daniel Scioli over more radical rivals as her party’s nominee in the Oct. 25 presidential election.

The relationship between pope and president, meanwhile, has been the subject of much speculation. Mrs. Fernandez had been among Cardinal Bergoglio’s harshest critics during his time as Buenos Aires archbishop, but following Francis’ 2013 election, she made a point of forging more cordial ties with the Jesuit pope.

The pontiff has met with her on more than half a dozen occasions, and the 78-year-old has adopted a “merciful” stand toward the leader known for her harsh rhetoric and confrontational style, Mr. Vera said. “I think he has given her a lesson in humanity,” he said.

By Andre F. Radzischewski
Thursday, October 8, 2015

BUENOS AIRES — For the first time in a dozen years, the Kirchner family is set to leave the Casa Rosada — the Argentine version of the White House — but President Cristina Fernandez’s grip on power will likely extend far beyond the vote in two weeks to determine her successor.

Amid accusations of large-scale corruption and opposition charges of widespread electoral fraud, Ms. Fernandez is determined to do whatever is necessary to protect her legacy and, so critics say, the clout she needs to shield herself from prosecution. Anything but a lame duck, the 62-year-old leftist president has refused to cede center stage to Buenos Aires Gov. Daniel Scioli, her own Justicialist Party’s presidential nominee, making an already rough campaign even more complex.

During the past 12 years, Ms. Fernandez and her late husband and predecessor, Nestor Kirchner, have governed the country in a style that critics dub “monarchical,” and they originally intended to alternate in the presidency to circumvent limits on consecutive terms.

Although Mr. Kirchner’s unexpected 2010 death torpedoed that plan, Ms. Fernandez has shrewdly preserved — and extended — the clan’s influence as she went after independent judges and prosecutors, cut federal funds from provinces led by critical governors and stacked government ministries and state-run companies with fierce loyalists.

“They continue to run the country as if they were its owners,” said opposition lawmaker Fernando Iglesias, author the local best-seller “It’s Peronism, Stupid,” referring to the country’s longtime strongman. “I believe the country is worse off than in 2001,” he said recalling the economic crisis that ended in riots and the resignations of two presidents.

A staggering economy, stubbornly high inflation and the mysterious death of a prosecutor, Alberto Nisman, have all led to Ms. Fernandez’s popularity suffering significantly since her 2011 landslide re-election. But many Argentines still back the president’s Peronist wing, and Mr. Scioli, her hand-picked successor, is still favored to take the reins after the Oct. 25 vote.

Mr. Scioli’s main challenger is Buenos Aires Mayor Mauricio Macri, a pro-market onetime businessman who once was seen as a real threat to end the Kirchners’ dominance of Argentine politics with a platform seeking to end the state’s economic interventionist ways. But he has been falling in recent polls, hurt in part by the rise of a third candidate, dissident Peronist Sergio Massa, who claimed over a fifth of the vote in a recent poll.

Under Argentine electoral law, a candidate needs 45 percent of the vote — or 40 percent with no other candidate higher than 30 percent — to win outright in the Oct. 25 election. Otherwise, the top two finishers will compete in a runoff in late November.

With his poll numbers surging, Mr. Scioli has been taking a front-runner’s approach in recent days, even skipping a televised debate in which Mr. Macri and four other candidates participated. A survey by Ricardo Rouvier and Associates Oct. 2 gave the ruling party candidate 41.3 percent to 30.2 percent for Mr. Macri. Mr. Massa was third with 20.6 percent.

Preserving her clout

Political observers say Ms. Fernandez, despite her shaky political standing, has skillfully maneuvered to preserve her clout after she formally steps down Dec. 10.

To avoid an internal struggle among her own political base, Ms. Fernandez in June tapped Mr. Scioli to lead her Front for Victory, even though she never particularly warmed to the governor of the nation’s most populous province — a key electoral district. His coronation thus did not come without a major concession — the incumbent imposed her chief ideologue, Carlos Zannini, as Mr. Scioli’s running mate.

Nor did Ms. Fernandez hesitate to keep in play the possibility of another run for the presidency when term limits no longer keep her from doing so. “I hope that I do not have to return in 2019,” she said earlier this year, “because that means that who comes after me will be better than me.”

Mr. Zannini’s selection, meanwhile, is only part of a multipronged strategy to cement the Kirchner influence beyond the next president’s inauguration, said Daniel Arzadun, a political scientist and author of a book about the family’s role within Peronism.

Ms. Fernandez is enlisting allies in Congress, where her son and potential political heir, Maximo Kirchner, is running for a seat for the first time. Meanwhile, she can count on the Front for Victory’s ultraloyal grass-roots groups to help her maintain control of the Peronist movement — and come out on top in a potential power struggle with a Scioli-led government.

“The Kirchnerist wing will be left out [of government],” Mr. Arzadun said. But traditionally, “the political power in Argentina revolves around Peronism.”

Irritated by Kirchner loyalists’ lackluster commitment to his campaign, Mr. Scioli said last week that he had no intention of being a “transitional president.” If he moves into the Casa Rosada, the former powerboat racer may well take a page out of the family’s own playbook and cut deals with powerful provincial governors to counter the influence of his predecessor.

But Mr. Macri has not been shy about playing on fears that Ms. Kirchner will be the power behind the throne if her anointed successor wins. When Mr. Scioli declined to take part in the debate Sunday, Mr. Macri remarked, “It looks like [the ruling party] is having trouble defining who is going to govern if it wins the presidency.”

Ironically, a victory by Mr. Macri, the outgoing president’s longtime nemesis, might make it easier for Ms. Fernandez to unite Peronists behind her and hold on to power in the long run, Mr. Arzadun said.

Whomever Argentines pick as their next president Oct. 25, the Kirchners are unlikely to stand by idly during the next four years. But the voters’ choice still matters, Mr. Arzadun said.

By Kamilia Lahrichi
9 October 2015

Argentina has a new law for treating children in hospitals that requires doctors to literally send in the clowns.

The groundbreaking law — the first in the world — for Argentina’s largest province, Buenos Aires, was inspired by the “laughter therapy” of U.S. physician Hunter “Patch” Adams and was implemented in August. All public hospitals in the province that have pediatric services are required to work with specially trained clowns.

The project is “complementary medicine to bring joy to sick children in hospitals, their families and the medical and non- medical personnel,” according to the Argentine Senate.

Ezequiel Belsu, 12, was crippled by pain from a pulmonary disease in intensive care at Hospital Piero. He was not moving.

But his eyes suddenly widened and he smiled when three clowns stepped into his room.

“Up until the clowns got in, he felt desperate. It’s the first time he spent so much time away from his home, so it made him feel better,” said the boy’s mother, Rosana Belsu.

The three go by Dr. Lala, Dr. Azul Primavera (blue spring in English) and Dr. Lulo Alegre. Their real names, respectively, are Evelyn Smink, Mara Asuncin Giardina and Miguel Alegre. And they are trained by the organization Puente Clown in Buenos Aires.

Jos Pellucchi, a physician who is director of Payamedicos, an organization of medical clowns, said clowns have been working in more than 150 hospitals in Argentina and Chile since 2002.

The clowns consult with pediatricians to know which patients they can entertain without disturbing them — or being exposed to a disease.

“We do an activity with everyone in the hospital, from the cleaning employees to the security officers and the doctors, to generate well-being in the workplace,” said Gustavo Iribarne, another Puente Clown professional.

The doctors believe the clowns benefit the patients.

“The fact that someone comes in with a white medical coat and a red nose saying the same things (as a doctor) but with a distinct language changes everything,” said Daniel Rivero, head of pediatrics at Hospital Piero.

“Health issues are not just related to our body. Determining factors include and human contact, which can change how our body works,” he said.

Clowns are important because “the hospital’s environment is very strict with white doors and aggressive people who put needles in children’s veins, tell them bad news and make them swallow awful medicine,” he added.

To build a bridge, clowns give patients in neighboring rooms each end of a rope. The clowns then relay jokes and messages between rooms.

This way, Ezequiel can communicate with his hospital neighbor, 12-year-old Sofia Benites from Paraguay who had her appendix removed.

With some patients, the clowns know that laughter isn’t always the best medicine.

“We don’t necessarily want to make people laugh. Although laughter is always curative, we want people to reconnect with their childhood’s world, dreams and fantasies,” Smink said.

By Charlie Devereux and Charlie Devereux
October 8, 2015

*Scioli adviser says candidate will resolve debt dispute sooner
*Bonds have soared on bets the next president will end default

Bond investors have long believed Mauricio Macri to be the presidential candidate in Argentina who will make ending the nation’s decade-long legal dispute with creditors a priority. With the election just three weeks away, they may want to reconsider.

Macri, the leading opposition contender, is pledging to restore Argentina’s finances by jettisoning currency controls and cutting subsidies that have swelled the budget deficit to a 14-year high. According to Macri’s own adviser, Federico Sturzenegger, those priorities will make striking a deal with hedge-fund foes led by Paul Singer’s Elliott Management less urgent.

By contrast, Daniel Scioli, the front-runner in polls, will seek to finance the deficit by regaining access to overseas debt markets, rather than making wholesale changes to many of the policies implemented by President Cristina Fernandez de Kirchner, according to former central bank Governor Mario Blejer, a Scioli adviser. That will make reaching an accord with the likes of Singer a priority.

Fernandez’s refusal to abide by a U.S. court ruling requiring Argentina to repay disgruntled creditors led to the nation’s second default in 13 years.

“He’ll be forced to negotiate sooner,” Luis Caputo, the president of Axis Inversiones, a money manager that owns Argentina debt, said from Buenos Aires. “This is more about logic than ideology.”

Argentina hasn’t sold debt under international law since it defaulted on a record $95 billion in 2001. Creditors including Singer rejected the government’s debt restructuring deals in 2005 and 2010 and won the right to full repayment in U.S. courts.

‘Social Constraints’

U.S. District Judge Thomas Griesa has blocked the country from honoring its foreign debt until the government reaches a settlement with the so-called holdouts. Fernandez calls the investors “vultures” and has refused to comply with the ruling, triggering another default in 2014.

Scioli and Macri have both indicated they’d hold talks to end the debt dispute. That’s helped spark a 19 percent gain in Argentina’s foreign bonds in the past year, the biggest in emerging markets, according to data compiled by JPMorgan Chase & Co. Government notes due 2033 which fell into default last year are trading at 102.33 cents on the dollar.

The winner of the Oct. 25 election will inherit a budget deficit of about 7 percent and foreign reserves hovering near a nine-year low.

“Scioli believes that you cannot fully correct the deficit given the political, social, economic and financial constraints,” Blejer, who is now vice president of Banco Hipotecario, said in an interview at his office in Buenos Aires. “This makes it extremely important to solve the problem of the holdouts because if you can’t close the deficit quick, you need to finance it in a way that is not damaging.”

‘Negotiate Firmly’

Scioli said Wednesday that the conflict with creditors has held Argentina back from progressing. Jorge Telerman, Scioli’s campaign manager, didn’t respond to an e-mail seeking comment.

“We’re going to have the willingness to negotiate firmly, with tenacity and open to, in fair and equal terms, finalizing something that has conditioned Argentina,” Scioli said at an event with business executives in Buenos Aires.

Macri is betting that his victory will stoke foreign investment in Argentina, which would help boost the country’s reserves, Sturzenegger, who’s a member of Congress, said in an interview at Bloomberg’s offices in Buenos Aires. By reforming Argentina’s institutions and reducing the risk of investing in the country, Macri can help state-run companies such as oil company YPF SA obtain lower borrowing costs, he said.

Lower Incentive

The oil and gas producer, seized from Repsol SA by Fernandez in April 2012, saw yields on its $1.5 billion of notes due 2025 climb to a record 10.77 percent last month before falling to 9.65 percent Wednesday.

The government’s foreign-exchange controls have also spawned myriad illegal currency as Argentines favor dollars in a country where inflation exceeds 25 percent.

“If Macri does his institutional shock, unifies the exchange-rate market, the yield of YPF bonds comes down from 11 percent to 5 percent,” Sturzenegger said. “Then the incentive as a government to solve the holdouts problem is lower because you have financial means of your own.”

Ivan Pavlovsky, Macri’s spokesman, didn’t return a voicemail seeking comment on what Sturzenegger said about creditor negotiations.

Stephen Spruiell, a spokesman at Elliott Management, declined to comment.

To Jefferies Group LLC’s Siobhan Morden, Scioli would have to do more than just end the debt impasse for Argentina to regain access to overseas credit markets. The country will still find it hard to get financing as long as it’s dependent on commodity revenue and refuses to devalue the peso, she said.

“Debt issuance alone is not a strategy,” Morden, the head of Latin America fixed income strategy at Jefferies, said in an e-mail.

By Juan Carlos Hidalgo
October 8, 2015

One of the most controversial and radical moves implemented during the populist rule of Cristina Fernández de Kirchner in Argentina was the nationalization of private pension funds in 2008.

Not only did the government seize $29.3 billion in pension savings but, since the private pension funds owned stock in a multitude of companies, the government also seized that stock and used it to appoint cronies to their boards. This significantly increased the government’s control over the private sector.

Even though none of the opposition candidates has proposed peddling back the nationalization of the pension funds, the Kirchner administration is taking no chances. This week the government enacted a law that makes it extremely difficult for future administrations to sell the stock: from now on it will require a two-thirds majority vote in both chambers of Congress. Since kirchnerismo will likely remain a significant political force in Congress in the foreseeable future, it will enjoy a veto power over any future sale of the stock regardless of who wins the presidential election in late October.

Tellingly, the Argentine government has also drafted legislation that would limit the extraordinary executive powers that the presidency has accumulated since the Kirchner couple came to power in 2003 (Cristina was preceded by her husband Nestor). But don’t count on Cristina discovering her inner Montesquieu. The Kirchner administration has signaled that the bill would be approved only if an opposition candidate wins the election.

Thus, even though Cristina might have only few more months in power, much of her economic model will live on.

TUESDAY, October 13th









By Peter Prengaman
October 12, 2015

BUENOS AIRES, Argentina — Like a dark cloud, the bitter fight between Argentina and a group of holdout creditors in the U.S. has hung over South America’s second largest economy for years, preventing the country from accessing international credit markets.

The dispute pits creditors led by U.S. billionaire Paul Singer against Argentine President Cristina Fernandez, who has refused to pay the $1.5 billion owed to hedge funds she refers to as “vultures.” A U.S. district judge’s rulings in favor of the hedge funds have put Argentina in default, scaring off would­be investors and forcing the country to search for money in unorthodox places.

For Fernandez, who along with her late husband and predecessor Nestor Kirchner helped lead the country after a devastating financial crash in 2001, the issue has been a deeply personal fight and she has taken a tough approach, including a refusal to even engage in talks over the last year.

But many people think her successor being chosen in the Oct. 25 presidential election will feel compelled to resolve the standoff.

“There are big incentives for the next president to resolve this because the government needs foreign funding,” said.

Gabriel Torres, a senior credit officer for Moody’s Investor Services in New York. “For years, it’s been clear that deep down the current administration didn’t care about this.”

A cash crunch would be the biggest prod for clearing up the conflict, analysts say. Argentina has about $27 billion in foreign reserves, relatively low for such a large economy in which the government offers generous subsidies.

The governing party’s presidential candidate, Daniel Scioli, governor of Buenos Aires province who leads in the polls, has taken up Fernandez’s hard line, yet he is also promising to find a solution. Economists on his team have made clear that Argentina will have problems raising money until the dispute is settled. His main opponent, outgoing Buenos Aires Mayor Mauricio Macri, has vowed to negotiate a resolution.

While the candidates remain vague, there are several ways the spat could be resolved. As part of a deal, Argentina could get loans on preferential terms to pay creditors off in lump sums. The country could also simply reissue the debt with new bonds at higher rates.

Still, many Argentines believe the country has been unfairly picked on, which means candidates have to talk tough when it comes to the holdouts, notes Roberto Bacman, director of the South American research firm Center for Public Opinion Studies.

The dispute goes back to Argentina’s $100 billion default on its debts in late 2001. In 2005, and then again in 2010, most of the country’s creditors accepted lower­yield bond swaps. But a group led by Elliot Management refused and sued Argentina in New York federal court. Elliot officials declined to comment on the conflict.

A familiar pattern has subsequently emerged: U.S. District Judge Thomas P. Griesa rules against Argentina, often raising the stakes, such as recently opening the door for Argentine assets in the U.S. to be seized. Economy Minister Axel Kiciloff accuses Griesa of overstepping, and Argentina ignores the rulings.

Largely cut off from international loans, Argentina has turned to countries such as China for backdoor ways to get desperately needed financing. In the last two years, Argentina has signed several agreements with the Asian powerhouse, including multibillion­dollar infrastructure projects and a currency swap.

Fernandez has touted the deals, but the terms have never been made public, and analysts have little doubt China exacts a price far more than the roughly 3 percent interest rate currently available in international loan markets.

“It’s the equivalent of somebody going for a payday loan,” said Brett House, a former IMF economist who is chief economist at Alignvest Investment Management, a Toronto­based investment firm. “Argentina is mortgaging the future” with such deals.

From the outside, the solution seems obvious: negotiate a deal and move beyond the stalemate. But inside Argentina, a country rich in natural resources with a long history of booms and spectacular busts, it’s a political land mine.

Macri learned that the hard way. In June 2014, long before becoming a presidential candidate, he said: “We must go, sit down with Judge Griesa and do what he says.”

Macri was roundly criticized, and now rarely talks about the matter on the campaign trail. When he does, he promises to be a tough negotiator who will not simply pay an “unjustified” sum.

There are other considerations, such as the “me, too” holders of about $5.4 billion in defaulted debt, a second group that has taken Argentina to court. In June, Griesa ruled Argentina also must pay them before paying its majority creditors, a decision that an appeals court threw out in August. Still, they and other holdout creditors will probably have to be included in an eventual deal.

Torres, at Moody’s Investor Services, says that Argentina’s outstanding debt is relatively small for an economy estimated at $600 billion and that the country is capable of paying it. Until it’s paid off, Argentina won’t be able to get loans on good terms and will struggle to attract foreign investors.

“Reaching an agreement with the holdouts has some costs, but not doing so has huge costs,” Torres said.

By Clyde Haberman
October 11, 2015

Grandmothers, an old saying goes, are angels in training. If so, one contingent that has had a great deal of practice can be found in Argentina.

The chief pursuit of these women is more temporal than celestial. With focused anger, they have spent more than three decades seeking to unravel and, when possible, correct one of the more shocking human rights outrages of modern times.

This installment of Retro Report, a series of video documentaries chronicling major news stories of the past and their abiding consequences, delves into the theft of babies by the military junta that ruthlessly ruled Argentina from 1976 to 1983. Those were the years of the dirty war, as it was called. Thousands upon thousands of Argentines — at least 10,000 and possibly as many as 30,000, according to some human rights groups — became los desaparecidos, the disappeared. “Desaparecido” was a word that politically attuned people around the world came to recognize instantly, even if they spoke almost no Spanish.

Men and women whom the junta deemed leftist subversives were abducted by death squads, most never to be seen again. They were routinely tortured in secret detention centers and then murdered, their bodies cremated or buried in mass graves or dropped from airplanes into the Atlantic Ocean. The junta described its victims as terrorists, but its definition was, to put it mildly, expansive. “One becomes a terrorist not only by killing with a weapon or setting a bomb, but also by encouraging others through ideas that go against our Western and Christian civilization,” the junta’s leader, Jorge Rafael Videla, said in 1977. He died two years ago in a Buenos Aires prison, where he had been serving a life sentence for crimes against humanity.

The junta’s brutality had a twist: Some of the kidnapped women were pregnant. A few had small children. The pregnant captives were kept alive only long enough to give birth. Then, as described in a 2004 article in the Harvard Women’s Law Journal, the junta embarked on “an unprecedented and systematic plan to steal and sell the babies of its victims.” The mothers were killed. Many fathers were, too. And the babies — about 500 of them, in a widely accepted estimate — were handed or sold to military families and to others considered “politically acceptable.” Birth certificates were falsified. The infants’ true identities were effectively erased. In some instances, they went to the very people who had killed their parents.

As this nightmare unfolded, two Argentine rights groups came into being in 1977: Las Madres de Plaza de Mayo and Las Abuelas de Plaza de Mayo, the mothers and the grandmothers of a central square in Buenos Aires. Every Thursday, they marched in silent protest around the plaza. The mothers sought to learn the fates of their dead children, the grandmothers the whereabouts of their stolen grandchildren, known as los desaparecidos con vida, the living disappeared.

Not everyone was even aware at first that a grandchild existed. One such abuela was Estela Barnes de Carlotto, a school principal. She knew that the eldest of her four children, Laura, had disappeared toward the end of 1977. Only later did she learn that her politically active daughter had been pregnant. Laura was murdered after giving birth to a boy in June 1978. Still later, Ms. de Carlotto found out that the baby’s father was another activist, Walmir Montoya. He, too, was killed, and his remains were not identified until 2009.

Ms. de Carlotto, who turns 85 on Oct. 22, joined Las Abuelas in 1979 and became its president 10 years later. Her story is central to the Retro Report video. Identifying and finding missing grandchildren turned into her life’s mission, with every success representing one more blow against the murderous junta. “Each case,” she has said in interviews, “is a triumph of truth over lies, horrors and deceit.”

Yet as stolen babies were tracked down one by one, 113 of them by May 2014, the search for her own grandchild proved futile. Then, suddenly, in the summer of 2014, there was a turnaround. Genetic testing proved conclusively that a musician, Ignacio Hurban, was Laura’s child. Given Ms. de Carlotto’s national prominence, the discovery was a triumph that resonated emotionally across Argentina.

Mr. Hurban had long wondered if he was truly the biological son of the couple who reared him from infancy, farmers who had received him in 1978 from a powerful landowner with ties to the junta. He did not seem like them at all, either in appearance or in cultural interests. A year ago, on his 36th birthday, he learned that he had in fact been adopted. Wondering if he might be one of the living disappeared, he had a blood test. After the results confirmed his parentage, making him the 114th grandchild to be identified, he changed his name to Ignacio Montoya Carlotto. Since then, three more such identifications have been made, bringing the total to 117.

Forensic genetics, the key to discovering many of the lost grandchildren, has proved an indispensable human rights tool. Advances in DNA analysis make it possible to match a person with his or her biological grandparent; that has been happening in Argentina since 1984. In 1987, the National Bank of Genetic Data was created there, the first of its kind in the world, and it now stores several hundred family profiles. Roughly 10,000 young adults (babies snatched during the dirty war are typically now in their mid- to late 30s) have had themselves tested for possible matches. In that manner, dozens of them have found their biological grandparents.

In part because of the Argentine experience, international accords now recognize certain fundamental human rights. The Convention on the Rights of the Child, approved by the United Nations General Assembly in 1989, asserts that nations must “respect the right of the child to preserve his or her identity,” a requirement that extends to one’s name and family relationships. In 2006, the General Assembly affirmed that a “forced disappearance” that is part of a systematic attack on a civilian population qualifies as a crime against humanity.

The identification of abducted Argentine babies has not been without pain. Some children, on discovering their true identities, have resisted leaving the only parents they know. Also, some adoptive parents have been criminally charged, with the couple who reared Mr. Montoya Carlotto now also facing that risk. His newly found grandmother, focusing on such couples in general, told Retro Report, “Without exception, they have to be brought to justice.”

Then again, some grandchildren are comforted to learn that they were not abandoned by their biological parents, as they long believed. “Initially, most victims experienced psychological shock when their true identity was revealed,” Dr. Victor B. Penchaszadeh, a once-exiled Argentine geneticist who returned home several years ago, wrote this year in The Journal of Community Genetics. But in time, Dr. Penchaszadeh said, “knowledge of the truth, painful as it was, was emotionally liberating from the perversity, lies, concealment and violence that in many cases had surrounded their rearing.”

Ms. de Carlotto vowed to continue the search for those still missing and “for truth and justice.” She will do this, she said, “while I have life in me.” But she is well aware that the clock is ticking. Grandmothers may be angels in training. But unlike celestial messengers, they are not immortal.

October 10, 2015

The Trans-Pacific trade agreement signed last week between the United States and 11 other Pacific Rim countries will be another nail in the coffin of the populist governments of Brazil, Argentina, Venezuela and other countries that will be left even more isolated from the global economy — and poorer — than before.

Once ratified by the countries that signed it, the agreement — officially known as Trans Pacific Partnership (TPP) and heralded as the biggest trade deal in history — is expected to cover 40 percent of the world economy. It’s likely to be a major boost to trade and investments among the United States, Japan, Australia, Singapore, Canada, Mexico, Peru, Chile and the remaining Pacific Basin signatory countries.

But what has gone almost unnoticed is that it will further isolate the struggling economies of Brazil, Argentina, Venezuela and other countries on Latin America’s Atlantic coast, whose disastrous populist governments have refused to enter free trade deals with the world’s biggest economies.

And what’s even sadder, this is not even a major topic of discussion in Brazil, Argentina or Venezuela, whose leaders live in an ideological bubble, oblivious to the fact that the commodity price boom their countries benefited from in recent years was a stroke of luck that is not likely to be repeated anytime soon.

While their governments pretend that everything is fine, Brazil, Argentina and Venezuela are facing an economic tsunami that may worsen their current crises.

At last week’s annual meeting of the International Monetary Fund and the World Bank in Lima, Peru, the IMF projected that Venezuela’s economy will contract a whopping 10 percent this year, and that the country will suffer a 200 percent inflation rate this year, the world’s highest. Brazil’s economy will contract by 3 percent, and Argentina’s will remain flat at 0.4 percent this year, and contract by 0.7 percent next year, the IMF said.

These populist governments, which are already weakened by corruption scandals, face bad news everywhere: China’s economy is slowing, world commodity prices have plummeted, nervous investors are fleeing from emerging countries, the U.S. dollar is gaining strength while their currencies get weaker, and the U.S. Federal Reserve may soon raise interest rates, which will make it more expensive for developing countries to borrow abroad and pay their debts.

And now comes the Trans-Pacific deal, which will make international companies more likely to open up manufacturing plants in Latin America’s TPP-member countries than in non-member ones. Whereas investing in any TPP member country will alllow multinational corporations to export duty-free to the entire TPP market accounting for 40 percent of the world economy, investing in non-TPP members such as Argentina, Brazil or Venezuela will only allow them to export duty free to their Mercosur economic bloc, which accounts for only 5 percent of the world economy.

In addition, the Trans Pacific deal will allow member countries to export to one another under common regulations. By comparison, non-members will have to adapt their exports to the individual import regulations of each of the 12 TPP member countries.

All of this will lead to a formal partition of Latin America. There will be a Pacific bloc led by TPP member countries that will be linked to the world’s biggest trading bloc, and an Atlantic bloc led by Brazil, Argentina and Venezuela that will be linked to an economically troubled China. The division, which has already existed de facto, will now become official.

My opinion: South America’s populist cycle may soon come to an end in several countries, as a result of new economic realities. Whether they like it or not, Brazil, Argentina, Venezuela and their ideological allies will have to desperately seek investments to face the perfect economic storm that is heading toward them.

The Trans-Pacific agreement is just the latest reason why they should leave behind their unsustainable demagogic isolationist models, and seek new trade and investment agreements with the biggest world blocs as fast as they can.

By Walter Bianchi
Oct 11, 2015

The Argentinian ruling party’s candidate Daniel Scioli maintains a commanding lead in the presidential race but still lacks enough voter support to win outright in the first round, a poll by the Poliarquia consultancy showed on Sunday.

Scioli, a moderate Peronist from President Cristina Fernandez’s Front for Victory Party, has support from 37.1 percent of those who have decided how they are going to vote, according to the poll published in the daily La Nacion.

His nearest rival Mauricio Macri, the center-right mayor of Buenos Aires city, trails with 26.2 percent, while Sergio Massa, who defected from the ruling party in 2013, has 20.1 percent ahead of the Oct. 25 ballot.

Scioli owes much of his support base to Fernandez loyalists. While he has made new investment a pillar of his campaign platform he has given little away on how far he would unwind state controls in the economy.

That has limited his appeal to voters weary of capital controls, import restrictions, rampant inflation. Some polls show a united opposition would win a second round.

Macri promises swift reforms to open up markets in Latin America’s third biggest economy but many voters worry he would return Argentina to the neo-liberal policies of the 1990s that led to a devastating economic depression.

To win outright in the first round a candidate requires 45 percent of valid votes or 40 percent and a 10-point lead over their nearest rival.

“Scioli is near the 40 percent threshold but there is no certainty he will reach it,” said Eduardo Fidanza, director of Poliarquia.

The pollster said that if undecided votes were taken into account Scioli would poll between 38.5 and 41 percent, Macri between 27.5 and 30 percent and Massa 21 to 23.5 percent.

The poll was carried out from Oct. 2-7 and surveyed 1,838 people across the country.

By Charles Newbery
12 Oct 2015

Argentina’s state-run energy company YPF plans to ramp up unconventional natural gas production to help close the nation’s supply deficit and expand petrochemical output.

“Fifteen percent of our gas production comes from tight and shale,” CEO Miguel Galuccio said late Thursday at the Argentina Oil & Gas Expo in Buenos Aires. “We have a goal of getting 50% of our gas production from these formations by 2020.”

YPF is producing gas from tight plays like Lajas and Mulichinco, as well as from Vaca Muerta, one of the world’s most promising shale plays that has attracted the attention of majors like Chevron, ExxonMobil and Shell.

Argentina has 802 Tcf of shale gas resources, far more than its 12 Tcf of proved conventional reserves, according to the US Energy Information Administration.

There is room to meet domestic demand, given that the country is running a deficit in gas, which meets 50% of national energy demand.

Gas production has dropped by about 20% to 118 million cu m/d over the past decade, led by maturing output from conventional reserves.

This has left slack capacity on pipelines that can be filled without much infrastructure investment.

Galuccio said another incentive is that the government is subsidizing gas prices from new developments to encourage exploration and production. Producers get $7.50/MMBtu at the wellhead for such new output, more than a $4/MMBtu average for conventional production.

As the country pays about $7.50/MMBtu or more for imported gas in its liquefied form, there is an incentive to close the deficit with local production, he said, more so if global gas prices rise in the future.


With more gas supplies, YPF wants to expand its petrochemical production.

“There is an important opportunity to create a regional hub for petrochemical production in Argentina,” led by polyethylene, polypropylene and other polyolefins and derivatives, Galuccio said.

“This will make it possible to replace imports and become a net exporter of petrochemicals,” he said.

In August, YPF announced plans to buy stakes in two polymer producers in Argentina for $122 million by the end of 2015. The assets include an 180,000 mt/year polypropylene plant and another with 130,000 mt/year of capacity.

Galuccio said the petrochemical output will add between $1/MMBtu and $2/MMBtu to the revenue the company makes on its gas production.

With this additional revenue, YPF could widen its exploration and production to riskier locations that it can’t develop now because gas prices are not high enough, he said.

YPF produces 45 million cu m/d of gas, more than a third of national output.

9 Oct
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21 octubre, 2015

PBS News Hour Runs NYTimes Video History on Grandmothers of the Plaza

How the children of Argentina’s ‘disappeared’ are being reunited with their birth families
October 19, 2015 at 6:20 PM EDTDuring Argentina’s military dictatorship, as many as 30,000 people simply “disappeared,” including some young, pregnant women, whose babies were then given to couples deemed sympathetic to the regime. What happened to those children, who are now adults? Retro Report, distributed by The New York Times, offers a look at efforts by desperate grandparents to find their family members.

JUDY WOODRUFF: During the military dictatorship in Argentina, from 1976 to 1983, as many as 30,000 people simply disappeared. Some of those were young pregnant women. An estimated 500 of their babies were then given to couples who were often deemed sympathetic to the regime.

What happened to those women and their babies is explored by the documentary project Retro Report and distributed by The New York Times. We’re partnering with them to bring you a version of this piece here.

MAN: A three-man military junta has taken over the government of Argentina.
NARRATOR: The coup began in the early morning hours of March 24, 1976.
MAN: The action was swift and efficient, and the new ruling junta composed of coup leaders seemed in firm control.
NARRATOR: It wasn’t long before the military dictatorship started rounding up guerrilla groups and those believed to be left-wing subversives.
Housewife and school principal Estela de Carlotto was 47 years old back in November of 1977 when her 22-year-old daughter, Laura, disappeared.
ESTELA DE CARLOTTO, Mother of “Disappeared Child” (through interpreter): She was the first of my four children. Laura was a very respectful girl, but with a strong personality. She became politically active because she wanted change.
NARRATOR: Carlotto says she was frantic to find out what had had happened to her daughter.
ESTELA DE CARLOTTO (through interpreter): At that time I was the same as other mothers, very naive. We didn’t know that the military were coming to kill people. We were expecting the return of our children.
NARRATOR: But it wasn’t to be. Carlotto would never hear from her daughter Laura again.
In August of 1978, she was killed by her captors. Although devastated, Estela de Carlotto was one of the more fortunate ones. She was given her daughter’s body to bury. It was two years later that she learned something she had suspected: Laura had been pregnant and given birth to a son before she was murdered.
ESTELA DE CARLOTTO (through interpreter): I buried Laura. I knew where Laura was. But I didn’t know where my grandson was.
NARRATOR: Not long after, she joined the grandmothers, or abuelas, of the Plaza de Mayo.
ESTELA DE CARLOTTO (through interpreter): Being on my own was dangerous. I couldn’t share my sorrow. So, to find the grandmothers was to find company, to exchange ideas and to look after one another.
NARRATOR: The dictatorship lasted seven years. During that time, as many as 30,000 people were tortured and killed at detention camps all over the country. Many of the victims were buried in mass graves.
After the regime fell, the grandmothers were desperate to not only find out what had happened to their children, but to also recover their grandchildren, who had been stolen at birth.
ESTELA DE CARLOTTO (through interpreter): In the beginning, we were searching, but we didn’t have a way to prove which were our grandchildren.
NARRATOR: So they turned to science. And, in 1987, they began storing their profiles in a newly created national genetic bank. By May of 2014, Estela de Carlotto and the grandmothers had found or identified 113 missing grandchildren.
And, at the age of 83, her determination seemed stronger than ever.
ESTELA DE CARLOTTO (through interpreter): I will never stop doing what I do, because there is inside a very powerful strength that is love, love for our children and grandchildren.
IGNACIO HURBAN, Adoptee (through interpreter): I first heard of grandmothers and of Estela de Carlotto when I graduated from secondary school and went to study in a music conservatory.
NARRATOR: Ignacio Hurban was born in June of 1978, at the height of the dictatorship. His parents were farmers near the city Olavarria, some 220 miles from Buenos Aires. On his 36th birthday in 2014, Ignacio found out that he had been adopted.
IGNACIO HURBAN (through interpreter): It was a shock, yes. The parents who raised me didn’t tell me. When I asked them, they confirmed what I had been told.
NARRATOR: Not long after his discovery, Ignacio went to the grandmothers, who arranged for a blood test. In August of 2014, just days after taking the test, Ignacio got the results from the head of the commission.
IGNACIO HURBAN (through interpreter): She told me whose grandchild I was and that my grandmother was waiting for me, very excited. We met immediately, the next day.
ESTELA DE CARLOTTO (through interpreter): Given his good nature and nice character, he said, in jest, of course, “If I’m a grandson of the grandmothers, I hope Estela is my grandmother.” He seemed to have sensed it.
NARRATOR: Yuki Goni is an author and journalist.
YUKI GONI, Journalist: The country came together, I think, in this huge cry of joy. I went to the press conference where she appeared publicly with him for the first time, and there’s a room packed full of journalists all in tears, myself included, because she represented so much for us.
I mean, she had been so brave. She had put so much of herself at stake. And, finally, she had her reward.
NARRATOR: But it also meant something else: Her grandson’s adoptive parents would face a legal investigation.
ESTELA DE CARLOTTO (through interpreter): The people who raised my grandson committed a crime. It’s a serious crime, a crime against humanity. There are extenuating circumstances, in that they were farm people under a very domineering master, who one day brought them a child and told them, do not ask questions and never tell him he is not your own son.
I personally do not blame them or exonerate them. That is in the hands of the justice system.
NARRATOR: Ignacio Hurban is now Ignacio Montoya Carlotto. Although he has changed his name, he says his bond with the parents who raised him remains strong, and he is proud to be the 114th grandchild identified.
At the age of 84, Estela de Carlotto shows no sign of slowing down, taking her message and now her grandson around the world.
IGNACIO HURBAN (through interpreter): There is my public life with my grandmother and my private and emotional life with her, a life we’re building. In that sense, it’s just a grandchild and a grandmother.
ESTELA DE CARLOTTO (through interpreter): When I met my grandson, I could hug him. He doesn’t look like his mother, but I knew that in his blood was my daughter Laura. And it was like I got her back.
JUDY WOODRUFF: You can watch the full documentary by Retro Report, “The Disappeared,” on The New York Times Web site. That’s








19 October 2015

BUENOS AIRES, Oct 19 (Reuters) – Argentina’s peso weakened to a record low 16.10 per U.S. dollar on the black market on Monday, currency traders said, as investors and speculators bet on a devaluation after a new government takes office in December.

The peso has tumbled more than 21 percent on the black market since early June, weighed down by uncertainty over how the next president would deal with capital controls. Argentines go to the polls on Sunday.

“No one doubts that we will see a devaluation,” said one market trader who declined to be identified because he is not authorized to talk to media. “The question is when.”

The peso traded officially at 9.4950 on Monday, leaving a 70 percent margin between the official rate which is tightly controlled by the central bank and the black market. The wide margin suggests the official rate is over-valued.

Daniel Scioli, the candidate for the ruling Front for Victory party, talks of gradual monetary reforms and says shock measures like devaluation are not the solution to structural imbalances in the economy.

Scioli’s main rival, business-favorite Mauricio Macri, promises to begin lifting capital controls on his first day in office and to allow the peso to float freely. That has been widely interpreted by many Argentines as shock therapy.

Argentina’s next president will inherit a sovereign debt default, precariously low net foreign reserves, double-digit inflation and a widening fiscal deficit.

By Carolina Millan
October 19, 2015

* Currency weakens to 16.11 per dollar in street markets

* Argentines seek protection in dollar ahead of elections

Argentina’s peso fell to a record in unofficial street markets as demand for safe-haven assets increased before presidential elections this weekend that are expected to bring changes to the country’s monetary policy.

The currency weakened 1.1 percent to 16.11 per dollar in the black market, where Argentines go to avoid controls that limit their ability to buy pesos at the official rate, according to That surpassed a previous record low of 16.06 on Sept. 25.

Argentina’s official peso trades in a market that’s tightly controlled by the central bank, which has intervened to limit declines since President Cristina Fernandez de Kirchner’s government devalued the currency in January 2014. Demand for dollars has increased over the past few weeks as Argentines wager that the next government is likely to allow the peso to fall further, according to Ezequiel Aguirre, a strategist at Bank of America Corp.

“As the elections get closer and closer, people see the possibility of a currency adjustment approaching and seek refuge by buying black-market dollars,” Aguirre said from New York.
Front-runner Daniel Scioli has said he would make “gradual” changes to monetary policy if elected. Leading opposition candidate Mauricio Macri has pledged to allow the country’s exchange rate to float freely starting from his first day in office.

The peso weakened 0.1 percent Monday in the official market to 9.4951 per dollar. It has declined 11 percent this year, compared with a 19 percent drop for the Colombian peso and a 32 percent tumble for Brazil’s real.

By Charlie Devereux
October 19, 2015

* Ruling party’s Scioli needs at least 40% on Oct. 25 to win

* A second round against runner-up would be held Nov. 22

Argentina’s ruling party candidate Daniel Scioli is within a fraction of winning in the first round of presidential elections to be held Oct. 25, polls show.

An average of four polls viewed by Bloomberg show Scioli close to surpassing the necessary threshold of 40 percent with a 10 percentage point lead needed to avoid the first run-off in Argentina’s history.

Poll of polls

Poll of polls

While Scioli enjoys a comfortable lead, surveys also show the opposition would pose a bigger challenge in an eventual second round on Nov. 22. Some polls show Mauricio Macri, who has an average of 28.8 percent of intended votes for the first round, would close the gap to within the margin of error, while at least two polls show that dissident Peronist Sergio Massa would defeat Scioli.

After results took almost 12 hours to be confirmed in August’s primary elections, the electoral authority has said it will transport ballots from Buenos Aires province, which makes up about 40 percent of the electorate, as they come in to speed up the counting process. Still, if there are calls for a recount, it may take a week before the country knows whether there will be a second round, according to the electoral council.

Argentina’s Cristina Fernandez de Kirchner will hand over the presidency on Dec. 10 after two consecutive terms in office.

By Nathaniel Parish Flannery
October 19, 2015

Argentina is one of Latin America’s most confounding economies. It is a country with stately, European style cities such as Buenos Aires and Cordoba and an export base that remains trapped in the nineteenth century. It has been said that in Latin America, Argentina is turning into Venezuela and Venezuela is turning into Zimbabwe. Argentina has many positive attributes but it remains a very challenging market for investors. While Argentina remains an important market for companies such as Ford and GM and has experienced rapid growth in e-commerce, Argentina has missed out on a lot of the positive economic trends under way in other parts of Latin America. Because of the country’s complex political and economic problems, Argentina’s large market of credit-card holding online shoppers hasn’t attracted much attention from Amazon, Home Depot, and Wal-Mart, companies that are investing heavily in Mexico. To get a sense of what trends are worth following as Argentine voters go to the polls on October 25 I reached out to Carl Meacham, the director of the Americas program at the Center for Strategic and International Studies (CSIS), a bipartisan Washington D.C.-based think tank.

Nathaniel Parish Flannery: What trends are underway in Argentina as the country approaches its October 25 election?

Carl Meacham: Since President Cristina Fernández de Kirchner took office in 2007, Argentina’s policies have shifted far to the left and the ripple effects have not been great. The state has expanded throughout the economy, which is, at this point, largely stagnant. Despite a degree of growth recently, economists largely agree that it isn’t sustainable – and could be reversed by the implementation of tighter fiscal and monetary policies after the elections this fall. Meanwhile, the Kirchner administration has been engulfed by corruption scandals and allegations of impropriety which have eroded confidence in her, though she remains popular with a large segment of the population.

Politically, the run-up to the elections has been primarily dominated by three candidates: Daniel Scioli, a relative moderate from Kirchner’s party, Sergio Massa, a relative centrist, and Mauricio Macri, who most clearly articulates a market friendly agenda. Scioli is the clear frontrunner, with Macri and Massa in second and third place, respectively.

The three candidates differ on many points and although it’s not impossible, it is improbable to see the election resolved in a single round on October 25. The second round, if required, would follow on November 22. But the candidates have a few points in common, too. First, they agree that Argentina’s vast welfare system should remain largely unchanged, given its widespread popularity. Second, the dollar exchange rate must be liberalized eventually. Third, export taxes that target the country’s agricultural sector must be reduced. And fourth, and arguably most importantly, the fiscal deficit and inflation must be curbed.

So where we see a consensus – among the candidates and among Argentines – around this idea that some of Argentina’s fundamentals need a degree of reform. Some of this has been fueled by the scandals, sure, but plenty has grown out of the realization that mismanagement is to blame for many of the country’s economic troubles. But change works slowly in Argentina. Argentines’ desire for change is unlikely to manifest as a large-scale divergence from what we’ve traditionally seen in the country – largely because Argentina’s political system, dominated by the Peronist movement, overwhelmingly favors continuity.
Projected GDP Growth For 2015

Meacham: Economically, Argentina is stagnating. Politically, the country’s establishment is under intense public scrutiny. And internationally, Argentina has been increasingly isolated from global markets and systems.

The U.S.-Argentina bilateral relationship has suffered in part due to the South American country’s unsettled debt dispute with a group of U.S. bondholders, and because of the Kirchner government’s reticence toward the United States. Though the country has paid off most of its outstanding debt, a significant sum remains.

A complete thawing between the two countries is unlikely until Argentina begins a process to reach a settlement with remaining U.S. bondholders. This will ultimately prove an important component to rectifying the bilateral relationship.

All three candidates have demonstrated their awareness that the country’s fiscal situation is unsustainable, and all three are likely to come to some agreement to settle the debt dispute.

But this much is true for sure: whoever wins the election will inherit an economic mess, and it’s unlikely that the new administration will manage any big changes within the first 12 months, particularly since likely winner Scioli has a reputation for being deliberate and cautious – and more likely to follow many of Kirchner’s policies.

Broadly, the revival of Argentina – and of U.S.-Argentina relations – hinges on the new administration’s ability to evolve toward an embrace of economic reform and increased engagement. Despite the challenges, the country’s new president will enjoy plenty of diplomatic means to signal a willingness to strengthen bilateral and global ties and facilitate change. And even a small show of confidence could trigger a wave of support from Washington.

The rise in drug trafficking and associated criminal activity is a particularly salient issue in Argentina at the moment, but weak bilateral ties have largely stood in the way of a higher degree of bilateral cooperation on counternarcotics activities. DEA cooperation with its parallel law enforcement agencies in Argentina – particularly for security training – has the potential to serve both countries interests, while rebuilding trust in a less visible (and therefore lower stakes) environment.

Washington could also signal its renewed willingness to work with the incoming Argentine administration from day one: by sending a high-level delegation to the new president’s inauguration. In its ideal form, Vice President Biden and Secretary of Commerce Penny Pritzker would travel to Argentina to welcome in the new president – and to begin rebuilding the political and commercial ties that have languished for the past 12 years, under Fernández de Kirchner and her predecessor and late husband, Néstor Kirchner.

Inflation In Latin America’s Biggest Economies

Meacham: For investors, there are two elements to this election that matter: Will the winning candidate implement the reforms Argentina needs? And if yes, when and at what pace?

So what reforms does Argentina need? The country’s regulatory environment is in need of serious restructuring. As it currently stands, doing business in Argentina is largely based on private relationships forged between businesses and the elites – fueling perceptions of risk and a lack of transparency. This, in turn, generates a high degree of ambiguity around the movement of money and the allocation of investment funds. Meanwhile, those investors that do funnel money into the country face enormous barriers to repatriating profits and accessing dollars to pay for imported intermediate goods, such as auto parts – another in a long list of factors that discourage investment, such as judicial insecurity.

The elections are also likely to lead to a devaluation of the Argentine peso. Devaluation is nearly inevitable as is its blowback on the economy and its investors. It’s a step Argentina needs, but may be a hard pill to swallow especially for brave investors already in Argentina who have accumulated large peso holdings due to capital controls.

All of this has made many foreign investors hesitant to enter the market, despite the potential returns to be had. Still, many investors are eager to do business in Argentina and lend to its government, provided it take measures in the direction of reform. The fact remains that Argentina desperately needs access to lending and foreign direct investment – hopefully it will prove motivation enough for the new administration to make speedy progress.

By Greg Grandin
Oct 19, 2015

Cristina Fernández is despised by the neoliberal elite, but her government has improved the lives of many, many people.

Over the last few years, as Argentina has struggled with a sagging economy and its share of political crisis, opinion and policy makers in the English-speaking world have tended to treat its president, Cristina Fernández de Kirchner, as a hot mess, the Paula Abdul of Latin American politics. Secretary of State Hillary Clinton inquired about her mental health (as revealed in a WikiLeaked cable), and The Economist called her presidency a “psychodrama.” The Economist has devoted so much ink to pathologizing Fernández that it has created a new genre: stalking as political commentary. Anonymously written articles (as per the magazine’s house style) describe the Argentine president as a control freak whose “need to control extends to her image” (unlike, say, every other major politician in the Western Hemisphere), cattily noting that “she never appears in public without looking glammed up.” Peronism, of which Fernández is the standard bearer, is less about “ideas,” the magazine says, than a “set of political emotions.”

Just last year, Fernández, who survived brain surgery in 2013, was being written off as an unpopular lame duck. “Her approval-rating languishes at 30%”! Her economic populism is ruinous! She picked a fight with London over the Falklands to divert attention away from her failures! She had a historic naval ship seized by creditors in Ghana! She killed Alberto Nisman! “The Fairy Tale” is ending for “Argentina’s new Evita”! She “lashes out” against critics! She appointed a Marxist Keynesian, or a Keynesian Marxist, as minister of the economy! She’s “out of touch with reality”! She’s “destroying the Argentinian economy”!

Argentina’s economy has been tightening since 2010, largely the result of lowered commodity prices. And Fernández’s clumsy handling of the death of prosecutor Alberto Nisman last January sparked widespread protests. But her popularity over the last year has gradually increased, today reaching “unheard of levels for a president in her final term.” More importantly, her handpicked successor, Daniel Scioli–governor of the province of Buenos Aires–is predicted to win the presidency, either in this Sunday’s first-round vote or in a run-off. (To win on Sunday, Scioli will have to garner either 45 percent of the vote or 40 percent with a 10 point margin; if not, a second round takes place on November 22.)

Those emotional Argentines! If only they could index their feelings to the slumping price of soy, rather than their operatic nostalgia for Evita, they would understand that the rational choice this weekend would be Mauricio Macri, a conservative businessman and current mayor of Buenos Aires who, according to the Argentine economist Roberto Lampa, embodies “the most obtuse neoliberal orthodoxy of the 90s.” China is in crisis, damn it, and Argentines are voting like it is 2002.

The tribunes of the world’s financial markets have had their eyes on this Sunday’s election for a long time, hoping that voters would not just reject Kirchnerism but end the Latin American left’s nearly two-decade-long run of electoral success. They have done all they could to plump for Macri, just as they did all they could to plump for Bachelet’s opponent in Chile, Dilma’s opponent in Brazil, Vásquez’s opponent in Uruguay, Morales’s opponent in Bolivia, Correa’s opponent in Ecuador, yea unto when the nightmare started, with Hugo Chávez’s 1998 win in Venezuela.

There is no doubt that the Latin American left is in crisis, for many different reasons, some self-inflicted, others more structural. But it still wins at the polls because, compared with the disastrous Washington-backed economic policies of the 1990s, this generation’s governing left has managed to improve the material, everyday existence of many, many people.

Argentines have long called the 1990s the “lost decade” (“la década perdida”), when neoliberals put the whole country out for bid, driving the nation into an economic whirlwind that was biblical in its proportions. More recently, Argentines are calling the 12 years of Kirchnerism–eight presided over by Fernández and four by her predecessor and late husband, Néstor Kirchner–the “la década ganada” (the “won decade”), a period that witnessed the institutionalization of enormously popular social policies. Just as anti-Chavistas in Venezuela have to campaign promising to be better Chavistas than the Chavistas (that is, they promise to expand and better administer the social-welfare programs Chávez’s government put into place), in Argentina, according to Jennifer Adair, a historian of Argentina, “every single candidate has had to contend with the ongoing popularity of Cristina and the policies of this past decade. The most dramatic example of this has been in the campaign of Macri, who recently gave a speech that one-by-one listed off the achievements of the Kirchner years, vowing that his national government would continue them.”

These policies include an impressive array of new redistributionist programs, including a “universal payment per child” (“asignación universal por hijo,” best thought of as a basic, minimum income tied to size of family household); protection for domestic workers; pushing back against the IMF and the hedge funds; re-nationalization, including of energy production and of Aerolíneas Argentinas; legalization of up to 2 million migrants, in what might be the world’s most humane border policy; prosecution of military officers involved in human-rights abuses during the dictatorship; legalizing same-sex marriage; lowering of the voting age from 18 to 16; Fútbol Para Todos (Soccer for All, the free, live TV broadcast of soccer matches). There’s low unemployment and steady public investment in public works and infrastructure, though inflation remains a problem.

Many of these achievements were indeed made possible by the commodities boom, as The Economist never ceases to point out. But, as the historian Ernesto Semán says, when commodity prices declined and the peso began to lose its value, the government neither turned to the right (as Juan Perón himself did in 1949) nor enacted knee-jerk austerity. Instead, it struggled to figure out ways to maintain, and even expand, its accomplishments. Fernández stumbled, particularly in her early handling of the Nisman crisis. Enemies, especially in the corporate and supranational press, went on the offensive. Fernández’s “rhetoric became repetitive” and, to some, tiresome.

But after eight years in office–and 12 years of Kirchnerismo–her popularity, and that of her policies, is undeniable. Contrary to what was last year a nearly universally held consensus, she hasn’t capitulated to the vulture funds who have been circling the country since her husband’s death in 2010. Argentina returned to democratic rule in the early 1980s, and every single one of her presidential predecessors save her husband, Néstor, left office either early or in disgrace. In contrast, Fernández is not only leaving beloved, her preferred candidate is set to succeed her.

But that fact might be what undoes her legacy. Many supporters of Fernández do not trust Scioli. Semán describes him as a “terrible governor of Buenos Aires province with bad ratings for most of his administration.” Scioli is running on Fernández’s and Kirchner’s accomplishments, but Google his name, along with the word “pragmatic,” and you’ll be taken to scores of articles in places like The Economist, Barron’s, Foreign Policy, and so on predicting that he will be his “own man.” In this case, pragmatism means only one thing: He’ll break with Kirchnerism, align with Washington, and make peace with global markets. This would include, among other things, deregulation, giving in to the hedge funds, and liberalizing the currency, with a further devalued peso making austerity inevitable. Semán also points out that Scioli is significantly more socially conservative than Fernández, on issues such as gay rights, crime, and abortion.

In Argentina, as in Venezuela and Brazil, Latin America’s new left has outlasted its first generation of leaders. We’ll see if it can survive their successors.

POLITICAL PARODY at its best..

we deserve d a few laughs from this POLITICAL CIRCUS..

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