South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.
Cristina Fernández, Argentina’s president, during a UN visit at the government palace in Buenos Aires
Facundo Frutos is cheering and singing, punching the air in a bar in Buenos Aires. But it is politics, not football, that has gathered him and a crowd of mostly young people here ahead of Sunday’s elections, in which Cristina Fernández, the president, is expected to coast to a landslide victory.
A decade ago, as a first-year university student, he took to the streets against the then economy minister’s $4.45bn austerity programme, a failed bid to avoid the crash which came at the end of 2001, when Argentina defaulted on nearly $100bn.
Now he is sitting in the Perón Perón bar, whose walls are scrawled with tributes to former president-turned-icon Juan Domingo Perón, his wife Evita and their political heirs, Ms Fernández and her late husband and predecessor, Néstor Kirchner.
The bar is crammed with black-and-white photographs and political memorabilia and the songs and chants are celebrating a workers’ march in 1945, one of the most hallowed anniversaries of the Peronist political movement that has dominated Argentina since the 1940s. It is less than a week before the October 23 vote and polls show Ms Fernández untouchable by a lifeless opposition and on course for a first-round victory with as much as 57 per cent of the vote.
Though Ms Fernández’s power base continues to be the working class championed by Evita, Mr Frutos is typical of her growing fan club among the young middle-class workers who admire her passion and intellect, support her message of wealth redistribution and “social inclusion” and have money in their pockets and jobs.
“In 2001, we didn’t see any future for this country,” says Mr Frutos. Now he works in a bank and owns his house. “I believe in my country again.”
The main question is what the 58-year-old Ms Fernández will do with her new mandate. Ardent supporters talk of the need to “deepen” an economic model based on sustained growth, twin trade and fiscal surpluses, a starring role for the state, a competitive exchange rate and a bid to reindustrialise a major grain exporting country that has become heavily import-dependent.
Ms Fernández’s government launched a new debt swap last year that has brought to more than 92 per cent the total of bonds from the 2001 default that have now been restructured. But Argentina remains a place many investors think twice about because of the government’s penchant for market-unfriendly policy surprises, such as the 2008 nationalisation of private pension funds. Even Argentines themselves have been rushing to get their money out in recent months as capital flight has accelerated. Economists reckon it could reach as much as $22bn this year.
The central bank has, meanwhile, been printing money and spending a fortune seeking to maintain a gradual depreciation of the peso against the dollar, which economists expect to accelerate as the weakening real in Brazil, Argentina’s top trading partner, puts pressure on competitiveness and the world heads for economic slowdown. “I think it is becoming increasingly hard to allow gradual movements without sacrificing a lot of reserves,” says Daniel Kerner, an analyst at Eurasia consultancy.
Inflation remains high – private estimates, in the absence of credible official figures, show it running at 24 per cent, outstripping the pace of peso depreciation, though the government says inflation is a byproduct of zooming growth. Gross domestic product is widely seen expanding at more than 8 per cent this year. The government also heavily subsidises energy and transport, and that bill is ballooning, while the trade surplus has been eroding fast and was 39 per cent lower in August compared with August 2010.
Argentina, furthermore, faces increasing diplomatic tensions – it still owes $9bn in principal and interest to western creditors in the Paris Club, for example. Although Ms Fernández has lately softened a warmongering tone that put her on collision course with farmers early in her presidency, the government still brands the country’s top-selling newspapers “liars”.
“The challenges she faces are not small. She’ll have to make some modifications on the fiscal, salary and monetary front,” says Diego Coatz, chief economist at the business lobby, the Union Industrial Union.
None of this matters to many Argentines. They see a president who has increased pensions, introduced a widely praised child benefit plan and gives out laptops to secondary schoolchildren and an economy that weathered the international financial storm in 2008-09 and can do so again. They also see a president with a big popular mandate to plough ahead with, and not deviate from, her current course.
“In 100 years, history will recognise Cristina as someone who really changed Argentina,” said Gabriela Minardi, an actress, in the Perón bar, a pro-Cristina badge pinned to her T-shirt. “You have to have a heart of stone not to be moved by her – she’s one of a kind.”
Though Amado Boudou, the man on course to be Argentina’s next
vice-president, is often to be seen in a suit, flying to ministerial summits or meetings with creditors, he has spent much of the election campaign on a different kind of stage, writes Jude Webber.
A fervent rock fan, the 47-year-old
motorcycle-loving economy minister has enjoyed belting out rock tunes on guitar, in hustings concerts designed to spread support for Cristina Fernández, the president, among the young.
He was chosen as running-mate for his unswerving loyalty to Ms Fernández, the president, rather than his political nous, though she publicly praised him for having dreamed up the pensions nationalisation plan in 2008, when he was head of the state pensions agency.
Mr Boudou – “Aimé” to his friends – is a trusty collaborator and will be president of the Senate in his capacity as vice-president. But it is not yet clear how deep his influence really is with the president, or to what extent he will have a say in future economic policy or, indeed, the choice of his successor.
Mr Boudou is rarely to be seen without his trademark boyish grin, which veils deep ambition. But in the fickle world of Argentine politics, where Ms Fernández was not on speaking terms with her deputy for most of her first term and even her husband temporarily fell out with his vice-president, Mr Boudou should not yet count himself as heir apparent.
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