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October 26, 2011

The Path to Re-Election, Argentine Style

Kevin E. Dayhoff

Riding the wave of a booming economy, fueled primarily by agricultural exports, the incumbent leftist Peronist-Justicialist and truly enigmatic president of Argentina, Cristina Elisabet Fernández de Kirchner, 58, easily won her bid for re-election on Sunday.


The Guardian referred to her victory as “one of the widest victory margins in the country’s history, a triumph that vindicated her message that she is best able to keep spreading the wealth of an economic boom.”


I would venture to add the word “wildest” to explain her victory.


Mrs. Kirchner’s election as the 55th president of Argentina is historic on many levels. As another Guardian article noted, “she is Latin America's first woman to be re-elected as president.” The New York Times observed that Mrs. Kirchner was “Argentina’s first elected female president…” in 2007.


Attempts to arrive at any consensus as to just what exactly is the meaning of her victory are elusive.


Ask any two Argentineans their views on President Kirchner and you will get about 10 answers, all reflective of the chaos that pervades the storied country’s history.


The New York Times article explained that “as recently as two years ago, Mrs. Kirchner had seemed a long shot to win a second four-year term. Her combative style, highlighted by a heated dispute over agricultural export taxes, sent her approval ratings below 30 percent.


“Economists predicted doom for the subsidy-heavy economic model first orchestrated by Mrs. Kirchner to help the country recover from its economic collapse in 2001; rising inflation and accusations of doctored economic statistics clouded her prospects.”


Candidly, I cannot even pretend to understand Argentina, especially its phoenix-like economic recovery. President Kirchner spends money like there is no tomorrow. She has nationalized certain sectors of the economy and has endeavored to tax anything that moves. So, why has it worked?


She’s John Maynard Keynes and President Barack Obama in drag with a heavy club.


And to say she has a “combative style” is an understatement. One needs a spreadsheet and a mood detector ring to fathom with whom or what President Kirchner is fighting with on any given day.


Media accounts of her victory Sunday are varied. And her triumph has sparked more than a few “inside baseball” food fights. Most entertaining has been Paul Krugman and Dean Baker duking it out in a minor border-war of words.


One of the snarkiest commentaries comes from the Center For Economic and Policy Research. “The NYT Can't Find Anyone to Say Anything Good About Argentina.” It’s short and not to be missed; especially if you have just learned about Argentina for reasons that have nothing to do with agriculture.


President Kirchner is technically a member of the Front for Victory alliance, or coalition, if you will; in the political party puzzle that is Argentina today.


In Greece, they actually have an app to keep track of whom or what is striking on any given day. More research is needed to determine if Argentina has an app to keep track of the various political parties, alliances and coalitions. If Argentina has no app for this purpose, it should.


Her re-election marks “an unprecedented third term for a faction that has governed Argentina since 2003,” says Uki Goni in the Guardian.


Setting aside Argentina’s politics and President Kirchner’s economic policies, why in the world would anyone in Maryland even care of who’s on first or what’s on second in Argentina?


Fair question. However, considering that agriculture remains the number one industry in Maryland, ask a farmer, especially a grain or beef producer, about the South American agriculture behemoth and you will quickly learn that if the Argentina agriculture industry as much as sneezes, American agriculture catches a cold.


For those following-along at home off the farm, Argentina’s leading agricultural exports are soybeans; cereals, including mostly wheat and corn, beef and dairy.


Okay, gee, that sounds a lot like what we raise here in Maryland.


Now, you’re getting the picture.


Approximately one-quarter of Argentina’s exports are agricultural; followed by petroleum products and the automotive industry.


And “Yes, it's the economy,” according to Mark Weisbrot, who wrote at length about the remarkable economic recovery. “Since Argentina defaulted on $95bn of international debt nine years ago and blew off the International Monetary Fund, the economy has done remarkably well.


“For the years 2002-2011, using the IMF's projections for the end of this year, Argentina has chalked up real GDP growth of about 94%. This is the fastest economic growth in the western hemisphere – about twice that of Brazil, for example, which has also improved enormously over past performance.”


Mr. Goni also notes that “depending on who you speak to, Argentina is about to enter either a glorious era of people's rule or a dark chasm of authoritarianism…”


The Wall Street Journal seems to share the concern that Argentina is drifting toward a leftist authoritarian era, (not unlike that of Hugo Chavez in Venezuela – or President Barack Obama in the United States…


“Kirchner's massive popularity is partly based on a verbal war against a privileged social class held to be guilty of thwarting the prosperity of workers…


“‘She is better at communicating with the people than her opponents’, says Horacio Verbitsky, columnist for the pro-Kirchner daily Pagina/12…”


Meanwhile, Mr. Weisbrot, an economist who is also the co-director of the Centre for Economic and Policy Research in Washington, was quoted by The Associated Press, that President Obama, “could take a lesson from this. It's an old-fashioned message of democracy: you deliver what you promise and people vote for you. It's kind of forgotten here in the US.”


Maybe, yes. Maybe, no. We’ll see.


… I’m just saying.


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