Argentina's President Loses Power in Mid-Term Elections

What's next for Argentina?

Argentina's President Cristina Fernandez de Kirchner faced a major test in the recent mid-term election in which she lost considerable power and her party's congressional majority vanished. The June 28 mid-term election could be better described as a referendum on Fernandez. As the first woman president elect her party fed the fire, turning the elections into a poll on the President's popularity. More than 70 percent of voters voted for opposition parties, according to official election results - indicator that Fernandez's popularity and support for her Peronist leaning party, Frente Para la Victoria (FPV) may be waning among the 19 million voters who went to the polls.

The Kirchner's have dominated the Argentine political scene since Nestor Kirchner, her husband, was elected in 2003 and credited for the nation's rapid recovery from the 2001 financial crisis which devastated the economy. Opting out of re-election in 2007, his wife Fernandez de Kirchner ran and took office with an 80 percent approval rating. However, the good times for Latin America's "power couple" who have also been described as the Kirchner dynasty were short lived as the economic crisis hindered hopes for continued 2003-2007 economic growth.

President Fernandez de Kirchner called for early elections originally scheduled for October so that her administration and legislative bodies "can focus on how to tackle the economic crisis." But many analysts claim that the government pushed elections up early so that Fernandez could avoid blame on how her government has handled the economic crisis which is beginning to take hold of South America's second largest economy.

The fall was hard for the Kirchner's. Nestor Kirchner lost the high profile political race in Buenos Aires province, the province with the most voters, by a small margin. He was defeated by Francisco de Narvárez, a wealthy heir from the conservative-right coalition Union PRO. Narváez, an unlikely candidate, Columbian-born with a tattoo on his neck and son of a supermarket giant, reveled in his victory as the working-class suburbs of Buenos Aires had long been Kirchner's electoral home turf. The very next day Fernandez abruptly resigned as leader of the Peronist party. Despite the loss, President Fernandez de Kirchner played down the election results citing that it was a close race and diversity in the legislature will help the democratic process.

What caused this fall from grace? And what's next for Argentina?

The center-right candidates from the Union PRO won the most ground in both the nation's autonomous capital district and in the Buenos Aires province. The candidate of the PRO party, Gabriela Michetti, won the congressional elections in Buenos Aires City with 31.08 percent of the votes. Both PRO candidates Michetti and Narváez marketed themselves for voters who "don't like the Kirchners." They called for a regression to policies implemented in the 90's favoring markets, foreign investors, and the privatization of public services, while tackling crime with a hard hand.

However, there are other indicators that voters would like the President to turn more to the left, rather than remain in the center. Fernando "Pino" Solanas, candidate for the leftist leaning Proyecto de Sur coalition and the director of the classic political film The Hour of the Furnaces, came in second winning 24.5 percent of votes in the capital. His campaign focused on the renationalization of natural resources like the nation's mining and oil industries.

Fernandez adopted many policies, which the nation's consolidated press described as unpopular and probably were for the business community which has benefited from decades of government subsidies, but received approval from unions, social movements, and regional partners such as Venezuela and other members of the Bolivarian Alliance for the Americas (ALBA), a regional leftist trade bloc. She nationalized pension funds almost bankrupted by private companies that acquired retirees' pensions in the 1990's. The President also supported the legislative move to renationalize the country's largest airline. The formerly state-owned Aerolinas Argentina was privatized in 1990, but the government said that mismanagement put the carrier into 900 million dollars in debt. These measures, described as erratic and combative, were a move away from the 2001 neoliberal policies, adopted under former neo-conservative Peronist President Carlos Menem (1989-1999), which caused the country to go broke.

The economy, which saw economic growth under her husband topping 8 percent from 2003-2007, has now slowed down to a reported 2 percent, likely an inflated figure. For example, leading up to the elections, the national statistic institute (INDEC) was accused of inflating numbers to show that the country's economy is on track. Independent analysts say that the inflation rate, published at 9.6 percent, is much higher than official statistics. Unemployment figures are relatively low, officially reported at 8 percent. Economists estimate that more than 50,000 people have lost their jobs since the onset of the current economic crisis.

In a positive step, the President has finally spoken in defense of workers who occupy their workplaces in order to keep their jobs. The national government would like to modify the nation's bankruptcy laws, which currently favor creditors and bankrupt businesses rather than workers, to make it easier for workers to start up cooperatives.

Union groupings held numerous protests and even a national strike calling on Fernandez to implement protection measures for job security and wealth redistribution as recession slowly unfolds in the nation's industry. Consumer associations are also demanding price controls on food and consumer products. But following the June 28 election, business community announced price increases. Fernandez has reluctantly imposed price controls, essential with rising inflation so that the majority of the population can access basic goods like milk, meat and bread. In addition to inflation, basic goods have become more expensive since enormous monoculture soy plantations now dominate the countryside.

Argentina's soy farmers tried their hardest to influence the mid-term elections, but failed to win much political ground. Agrarian associations representing the country's soy farmers proved to be the president's biggest challenge since taking office. In 2008 and into 2009, farmers held several paralyzing strikes over the government's decision to increase an export tax on soy, a policy carried over from Nestor Kirchner, who upped the tax to 35% as an emergency measure to revive the economy after the crisis. Many of the provinces where the opposition won votes are precisely the bread-basket producing provinces, where the production of genetically modified soy has invaded more than 42 million acres of fertile land. It's unlikely that the government will reverse its support of the soy tax, as revenue from soy exports topped nearly 16 billion dollars in 2008 alone, crucial income for the government's treasury reserves. One agro-leader and hopeful governor candidate, Alfredo De Angeli received heavy criticisms after he said that in order to defeat the Kirchner's land owners should "find the farmhands on the estates, put them on a truck and tell them who they should vote for." A number of agro-leaders ran for congress hoping to win 17 percent of seats but fell short only winning a Senate seat and lower house seats.

A health crisis is looming due to the spread of the deadly H1N1 "swine flu" virus. As voters went to the polls, many voted wearing surgical masks and registry personnel were instructed not to shake voter's hands. More than 26 have died from the deadly epidemic and more than 1,500 have been infected with the virus. The Southern Hemisphere's winter temperatures are accelerating the spread of the virus. Yet the government has delayed declaration of a health emergency, resulting in the Health Minister Graciel Ocaña's resignation the day after the June 28 elections. It may have been prudent to hold off an election to deal with the deadly epidemic. Like many of the nation's structural problems such as the economy and growing crime the government opted to ignore the dilemma rather than dealing with it. The epidemic may spiral into a real crisis for the already stumbling economy.

What's next? President Cristina Fernandez de Kirchner and the new legislative representatives taking their posts this December are going to face many challenges as the economy takes an inevitable severe downturn. How they come out of the crisis is part of the game of politics. One of the first challenges for the President post-elections will be to take a strong stance in her foreign policy favoring regional integration and cooperation among progressive governments. Indeed, she is traveling with the OAS commission to escort illegally and forcibly exiled Honduran President Manuel Zelaya back to his country. Fernandez will also have to decide whether to reverse her anti-IMF discourse to gain loans to help meet the nearly 20 billion dollars in debt payments due by the end of 2010. At this point, the President can continue to push forward an alternative agenda or go back to the neoliberal model, but this election, as well as the regional trend in governing, suggests that Argentina and the region are ready for the alternative.

Marie Trigona is an independent journalist and radio producer based in Buenos Aires. www.mujereslibres.blogspot.com