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.
Mauricio Macri, the newly sworn-in president of Argentina, ran for office under the campaign slogan “Let’s Change,” and his victory has already caused a few reversals. For the first time in Argentine history a self-declared right-wing, pro-business candidate—one not affiliated with Peronism or Radicalism, the country’s dominant political movements—has been freely and fairly elected as head of state, rather than installed by a military dictatorship. Also for the first time, a democratically elected president has put together an administration that is largely devoid of career politicians. Macri has packed his cabinet with veterans of the corporate world. The new finance minister is a former executive at JPMorgan Chase; the minister of foreign relations is a former C.E.O. of Telecom Argentina; the minister of energy is a former president of Shell Argentina; the minister of production is the former C.E.O. of a pension fund; the head of Aerolíneas Argentinas, the national carrier, is a former regional director for General Motors; and the transportation minister used to run his family’s car dealership. “There will never be a more market-friendly government than this one,” Alejandro Rebossio, the author of two books on Argentina’s economy, told me.
Macri’s appointments are in keeping with the technocratic approach to politics that he and his party, Propuesta Republicana (PRO), advocate. “PRO was born, to a large extent, as an attempt to encourage businesspeople to get involved in politics, to make politics more efficient,” Gabriel Vommaro, a sociologist at the National University of General Sarmiento, in Buenos Aires, and the co-author of “Mundo PRO,” a book about the Party, told me. “The C.E.O.s that occupy so many relevant positions are not so much an expression of the direct influence of corporations as of the centrality of a managerial ethos, with which macrismowants to relaunch the country.” The PRO ethos was apparent even in the initial statements of some of the ministers who do not have corporate backgrounds. Speaking about the national literacy plan, Pablo Avelluto, the new culture minister, said, “I don’t know the details, but I agree that such a plan should exist.” The new environment minister, a rabbi named Sergio Bergman, was similarly sanguine. “I have no technical knowledge of the environmental area,” he told a reporter. “I will use common sense.”
Macri started out as an executive himself. His father, Franco, an Italian immigrant who made his fortune in construction and automotive manufacturing, hired him when he was twenty-four years old. For a time, it seemed as though the younger Macri would follow in his father’s footsteps. Photographs of the two men sunbathing, surrounded by young, curvy women in tiny bikinis, were a summer staple of celebrity-gossip magazines throughout the nineteen-nineties. Eventually, though, their paths diverged. In 1991, Mauricio Macri was kidnapped by a group of rogue policemen, who held him captive for twelve days, before ransoming him for six million dollars. The experience, he has said, transformed his perspective about life in the way that a terminal illness might have. When I interviewed him in November of 2007, shortly after he had been elected mayor of Buenos Aires, he said, “I am turning fifty soon. What am I supposed to do, become like my father?”
In some ways, Macri’s election is an emblem of broader change. “A new kind of right-wing leader is surging throughout the region,” José Natanson, the director of the South American edition of Le Monde Diplomatique, told me. Like Sebastián Piñera, the former president of Chile, or Henrique Capriles, the governor of Venezuela’s second-most-populous state, Macri is a post-neoliberal figure who speaks often of social compassion, and who will occasionally bow to populism. In 2009, when a judge ruled that Buenos Aires City Hall should grant a gay couple’s petition for a marriage license, Macri offered no opposition. He had previously called homosexuality a “disease” and refused to back a proposed marriage-equality law. As mayor, he could have instructed the city’s lawyers to appeal the ruling. He didn’t. Whether or not his convictions had changed, those of his constituents were clear: seventy-three per cent of them supported gay marriage. Macri’s PRO colleagues in the National Congress were divided in their votes on a national gay-marriage law, but he stayed true to the Party’s purportedly nonideological approach to politics—one that often takes polling into account.
It isn’t clear whether Macri will be able to reproduce this sort of maneuver on the national stage, pleasing both his C.E.O.-crowded cabinet, the lenders and investors behind it, and his fellow-citizens. First, there is the economy. In 2011, Cristina Fernández de Kirchner, Macri’s predecessor, imposed a cepo, or clamp, on currency-exchange operations in Argentina. Her goal was to avoid both the flight of capital and a devaluation of the peso. Four years later, the country’s foreign reserves, according to Argentina’s central bank, are at a low of twenty-five billion dollars, less than half what they were when the cepo began. Macri has promised to end the policy, which he believes will encourage Argentine soy and grain exporters to sell, bringing money into the country. But the sudden end of the cepo might provoke an immediate jump of the exchange rate, causing a deep devaluation of the peso and, in turn, inflation—as much as thirty per cent in 2016, up from twenty-three per cent this year, according to some projections.
Macri has also said that he will eliminate most of the energy and public-transportation subsidies that were instituted by Cristina Kirchner and her husband, Néstor Kirchner, who was president from 2003 to 2007. The subsidies account for four per cent of the country’s G.D.P.—the entire fiscal deficit of Argentina being six and a half per cent of G.D.P.—and have meant low utility bills for millions of Argentines throughout the past decade. Although Macri has vowed to maintain subsidies for the poor, who make up twenty-one per cent of the population, this means that many subsidy recipients, in the middle and upper-middle classes, could see an increase of as much as seven hundred per cent in their utility bills.
Dim economic prospects among Argentina’s neighbors will not help, either. The Latin American economy is shrinking for the first time since 2009, with a projected growth for the entire region of half a per cent in 2016. The economy of Brazil, Argentina’s main commercial partner, is expected to shrink by up to two per cent. The strategy that Macri has announced to stimulate his country’s economy involves seeking credit and investment from abroad. He will enjoy an advantage that no president since 1983 has had—the lack of heavy foreign debt, a legacy of the Kirchners. Macri is expected to reëstablish relations with international capital markets and the International Monetary Fund, which were severed during the Kirchner era. “His economic team is very close to the financial markets, which are only interested in fabricating debt,” Rebossio said, noting that Macri increased the debt of Buenos Aires threefold during his time as mayor. This debt, Rebossio added, may serve as a deterrent. “I am hearing private investors say that if there are no austerity measures, they will not invest one dollar,” he said. In one of the first interviews he granted after his electoral victory, Macri remarked that he wanted “a market balanced by a strong state.” But how will that be accomplished when the same market is being asked to fund the needy state?
One way to compensate for economic pressure would be to resort to politics. Here again, though, Macri will meet with several complications. Having won by a narrow margin—2.68 per cent of the popular vote—he has no majority in either congressional chamber, even counting every seat belonging to the electoral coalition that brought him to power. In his cabinet, there is a conspicuous absence of the political groups that helped him win. Although Peronism was defeated in the election, because of divisions among its candidates, it remains the country’s main political force. Macri will have to reckon with fifteen Peronist governors and the powerful Peronist trade-union association. The risk for Macri is that these groups will reunite around one chief, perhaps even a familiar face. Cristina Kirchner is leaving office, after eight years in power, with a popularity rating of forty per cent, the second-highest of any exiting president in the past three decades. (The highest rating belonged to her husband.) A crowd of more than a hundred thousand people gathered in front of the presidential palace to bid her farewell last Wednesday. As leader of her party, she still has influence over forty-three senators and a hundred and seventeen representatives—more than PRO—and the Argentine constitution does not bar her from running for president again.
On Monday, in a token, perhaps, of what may be his way of overcoming his political disadvantage, Macri appointed two new Supreme Court judges by decree, circumventing the usual process of confirmation by the Senate. This has never previously been done by a democratically elected president in Argentina, and it seems to refute Macri’s vow to uphold the country’s “republican institutions.” The move was denounced by some of his supporters, including legal experts within his own camp. As Margarita Stolbizer, a former Radical politician who publicly supported Macri during the second electoral round, put it, “If Cristina Kirchner had done this, it would be a scandal.”
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