NS/NC

Argentina’s politics shift

in a surprising presidential

election

Without a conclusive electoral mandate, Néstor Kirchner seeks federal-

provincial co-operation and supporters in the new Parliament.

When

Néstor Kirchner assumed the presidency of

Argentina on May 25, it ended a period of profound political

crisis that began a year and a half ago and continued right

through to the presidential election itself. Kirchner’s victory

arose from a series of dramatic firsts in Argentine politics, in

which he “won” the presidency despite placing second on the

only ballot with just 22 per cent of the popular vote. The

leading candidate, former president Carlos Menem, withdrew

from the subsequent run-off election, thereby denying Kirchner

the opportunity to gather a majority of votes and the strong

electoral mandate that he surely would have achieved (see

Table 1). His new administration now faces fundamental

challenges that suggest the political instability may not be over

yet.

Kirchner must deal with his nation’s enormous economic

problems, including the need to strengthen the incipient

economic recovery, combat very high unemployment and

reorganize the foreign debt with private creditors. His

inaugural speech indicates that he will also work to establish a

federal

standard for

the provinces’

educational

systems and

adopt a new

federal-

provincial

revenue

sharing law.

The success of

his ambitious

agenda and his

new administration now depend on federal-provincial

negotiations and the results of further elections over the

remainder of this year.

A crisis begins

The Argentine Republic’s 17-month political-economic crisis

was sparked on December 20, 2001, by Fernando De la Rua’s

sudden resignation as president. His startling departure began

a whirlwind series of events over the course of a week: the

early resignation of a president-elect, which was followed by a

series of four replacements, the suspension of payments on the

public debt and the devaluation of the currency. The political

developments prompted public protests, triggering

governmental repression that caused more than thirty deaths.

There were also millions of pesos in individual losses as a

result of massive looting in large city centres.

3

This violent explosion eventually

gave way to an interim

administration headed by Eduardo

Duhalde, a senator who belonged to

the party that had lost the 1999

presidential elections against De la

Rua. Duhalde’s months in office

were marked by social upheaval led

by the holders of financial fixed-term

notes, originally in American dollars,

that were returned to investors in Argentine pesos

after the devaluation. At the same time, masses of

unemployed people expressed their anger by picketing and

disrupting the country’s roads and highways.

The debt and the provinces

Argentina’s huge public debt presents a fundamental challenge

for any new government. During the previous Menem

administration, from 1989 to 1999, the

debt grew exponentially, a total of 123%,

reaching $146 billion US. And this only

accounts for the federal government debt

– the total debt is much worse. Most of

the 24 jurisdictions that make up the

Argentine federation also have significant

financial problems. Their combined debt

grew during the same period from $15

billion to $37 billion US. This has caused

the International Monetary Fund (IMF) to

scrutinize not only the federal

government’s balance sheet, which is the

only one connected to the Fund, but also those of the

provinces.

The situation is worsened by the absence of a federal-

provincial revenue sharing law, which the 1994 federal

constitution required be approved before the end of 1996.

There has been growing tension between the federal

administration and the provinces because of the distribution of

the fiscal adjustments required by the IMF. Then in 1999, when

the federal government was taken over by a political party that

was different than that which administered the majority of the

provinces, federal-provincial relations were further soured.

During De la Rua’s term, the federal-provincial tensions

created an ongoing, intense competition. The governors,

mostly Peronists, began to provide a more effective opposition

to the Radical Party administration than their party’s own

legislators in the nation’s Parliament.

De la Rua’s replacement by Duhalde, a Peronist, resulted in an

improved federal-provincial relationship, due not only to

matching political colours but also to the improved fiscal

performance at both levels of government brought on by

currency devaluation.

F e d e r a t i o n s

Vol. 3, No. 3, August 2003

Gabriel Puricelli is an economic and political analyst who lives in

Buenos Aires.

Table 1: The vote for president in 2003

Candidate

Party

Vote ( %)

Carlos Menem

Loyalty Front (Peronist)

24.45

Néstor Kirchner

Victory Front (Peronist)

22.24

Ricardo López Murphy Recreate Federal Movement

16.37

Adolfo Rodríguez Saá

National People’s Movement (Peronist)

14.11

Elisa Carrió

Alternative for a Republic of Equals

14.05

Néstor Kirchner, the new

President of Argentina.

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Page 4

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Kirchner and the split in Peronism

Now Néstor Kirchner, one of those Peronist governors, is

moving to Buenos Aires to head the federal government.

Kirchner gained valuable insight running the Santa Cruz

provincial government and understands well the dynamics of

federal-provincial relations. Although he inherits the improved

situation, the redesigned federal political scene raises questions

about the governors’ future behaviour in their relationship

with the presidency.

Peronism, whose candidates have been Argentina’s governing

party almost exclusively since its foundation in 1946, was split

among three candidates during the April 27 election: the

winner Kirchner, ex-president Menem and ex-Governor of San

Luis, Adolfo Rodríguez Saá. This split and the virtual

extinction of Radicalism, the other traditional party, gave way

to an unusually fragmented electoral picture. Only ten

percentage points separated the first place candidate, Menem,

from the progressive representative who placed fifth, Elisa

Carrió. It is too soon to say whether this novel political

scenario will be a permanent change in the political system or

if it is a just a fleeting state. Peronism could easily be reunified

behind the leadership of the new president, or its split could

very well be reinforced with the emergence of three different

parties having strong regional ties. Like never before in

Argentina’s democratic history, the citizens’ voting patterns

produced a

political map

strongly marked

by regional

support for

different

candidates (see

Table 2).

When Menem

decided to

withdraw from the

second round,

originally planned for May 18, it was the first time in the long

history of the ballot system around the world where a

candidate who won the first round pulled out before the

second. His departure was undoubtedly aimed to weaken the

legitimacy of Kirchner’s mandate. Opinion polls suggested

Kirchner would trounce Menem, with between 71% and 79%

of the votes, when his opponent pulled out. Menem’s decision

could mark the end of his long political career, at 72 years of

age, since he cannot harbour serious hopes of being a

candidate again in 2007.

Rodríguez Saá’s case may be different, as he is 10 years

younger than Menem and is not burdened with strong

rejection ratings like those that ended up convincing Menem to

pull out of the race. If Rodríguez Saá retains significant

support, then Peronism will remain divided.

Running a province vs. running a country

Experience in running a provincial government has again

proven itself to be an important career boost for candidates of

Peronist origin: both Kirchner and Rodríguez Saá were

governors when they launched their campaigns, as was

Menem when he ran for the first time in 1989. Unlike other

federal systems, Argentina’s political parties have been

structured from the national level downward. Therefore, each

party’s provincial branches operate as structures from which

one can rise to federal leadership positions. However, this

pattern appears to be weakening, especially in the case of the

UCR, the Radical Civic Union, whose presidential candidate

received only 2.34% of the votes. Yet it still controls the

government in five provinces and provides the only significant

opposition in most of the other districts. Even if this party does

not regain a relevant federal role in years to come, its

provincial presence will most likely remain strong.

Another development that came out of these elections was the

emergence of a new conservative political force, built on the

basis of a confederation of exclusively provincial conservative

parties, which served as a platform for ex-radical Ricardo

López Murphy to obtain 16% of the votes. From a right-wing

minority faction of the old Radical Party, this ex-minister of the

De la Rua administration successfully combined his own

personal appeal to certain sectors of the urban middle classes

with the organization provided by the aforementioned

provincially-based parties.

Changes ahead for the federal government

More changes to Argentina’s political layout are scheduled

after Kirchner’s election. Every two years, there are elections

for one-half of the House of Representatives for a four-year

term, and one-third of the Senators for a six-year term. This

year, elections will be held for one half of the federal House of

Representatives and one third of the federal Senate. In all

likelihood, these elections

will result in two houses of

Parliament that look more

like the sum of the electoral

geographies of each

province, rather than a

genuine federal political

geography. This is due to

the transfer to each

provincial government of

the power to call elections

for the federal legislators

for each electoral district (which in Argentina coincide with the

provinces and the self-governing city of Buenos Aires). This

decision by the 1990’s Menem government sought to transfer

the political results at the provincial level (where Menem’s

party was the strongest) to the federal level, where voting

preferences were becoming unfavourable for Peronism.

Ironically, the concrete effect of staggering electoral dates for

the federal Parliament will surely be the opposite of what large

citizen protests demanded in late 2001 and early 2002. Then

the public’s favourite slogan was “All of you go away”, a

demand for a radical shake-up of the political elite. A series of

24 district elections will make electoral victories for those who

currently control the provincial governments easier.

Regardless of when they are elected, one half of the 257

representatives and one third of the 72 federal senators will

take their seats on December 10, 2003. The outcomes will affect

Néstor Kirchner’s ability to govern his country until the end of

his mandate in December 2007. His relations with the new

Parliament will determine, among other things, how feasible it

will be to impose a single standard of educational quality in a

country with highly different regions and how simple or

winding the path will be toward a new federal-provincial

revenue sharing system. Whatever Kirchner’s strengths and

achievements over the coming four years, neither of his

promises will depend solely on him.

F e d e r a t i o n s

Vol. 3, No. 3, August 2003