Argentina:One Country, Two Leaders, Two Mysteries

ARGENTINA

One Country, Two Leaders, Two Mysteries

When Irish rocker Bono met Argentine President Mauricio Macri recently, the two discussed Santiago Maldonado, an activist who went missing while campaigning against energy companies exploiting land claimed by the indigenous Mapuche people in Patagonia.

His disappearance evokes memories of the country’s dictatorship in the 1970s and 1980s, when dissidents were routinely arrested and never seen again. But it also shows the hazards of Macri’s push to boost the Argentine economy after years of stagnation.

“The government’s ability to ramp up investment in Vaca Muerta will be put to the test,” Michelle Carpenter, an analyst at global risk firm Verisk Maplecroft, told the Financial Times, referring to a Patagonian shale field.

The Associated Press reported that Macri promised to find out what became of Maldonado. But clearly his main priority is fixing Argentina’s struggling economy.

“We have turned a corner,” Macri said on Bloomberg Television. “Without a fixed exchange rate, without any type of price controls, we have been reducing inflation. I am more confident than ever that in 2019, we will have single-digit inflation.”

He has reason to crow.

Macri’s predecessor, ex-President Cristina Fernández de Kirchner, presided over one of the most chaotic periods of Argentina’s fraught history. Her conflicts with American hedge funds led to the global investment community freezing Argentina’s access to credit markets (Macri settled those issues). A web of corruption scandals threatens to put her in jail to this day, the Miami Herald noted.

Still, Kirchner is running for Senate in legislative elections Sunday, suggesting she intends to fight the allegations against her to the bitter end and remain a thorn in Macri’s side.

He has reason to be concerned. Argentines want jobs and prosperity. But many fear American-style capitalism will enrich the few at the expense of ordinary people.

“Macri’s reform initiative hopes to make Argentina more attractive to foreign investors,” wrote Stratfor. “But economic reform could also cause a political backlash that may put Macri’s possible re-election in 2019 at significant risk.”

Argentines are skeptical that Macri can change things. Bloomberg recently reported that bank deposits equal only 15 percent of gross domestic product. More than 40 percent of economic transactions are “informal.”

Recent polls illustrate the electorate’s ambivalence. Macri’s approval rating is at 46.5 percent, the highest since early 2016, according to Reuters. His “Let’s Change” coalition of political parties is expected to gain seats but not win a majority.

Kirchner is forecast to win her race despite the whiff of suspicion surrounding the mysterious murder of a prosecutor hours before he was to testify against her for covering up a high-profile terrorism investigation, the New York Times reported.

Argentina is changing. But it’s not clear by how many steps forward – or back.

One Country, Two Leaders