Argentina’s Political Ecosystem Is Already Dead And Respawning

At least for the past decade it has been pretty difficult for Argentines to escape that uncomfortable and consistent feeling that an important economic crisis is around the corner, sparking comparisons with the implosion of the country and the economy in 2001 and 2002. With the PASO primaries around the corner and a general election promising to be a game-changer coming later this year, a cloud of uncertainty has taken over, bringing with it increased socio-economic turbulence and the specter that Argentina could once again go over the edge. The continuation of triple-digit inflation and what appears to be economic stagnation feels increasingly unbearable and it is difficult to imagine that any of the presidential contenders will really be able to tame the wild beast that is the Argentine economy, particularly given the level of polarization and the deep political fragmentation that has crystallized ahead of this electoral process. And once again the International Monetary Fund takes a leading role, holding the fate of the embattled nation in its hands. Argentines have become incredibly resilient, generating a massive tolerance for intense states of crisis which would most probably paralyze others, which in turn has probably created an overshoot in levels of pessimism that appear unwarranted when looking at the underlying fundamentals which suggest an exit to this level of mediocrity should be near. At the same time, the country’s elites have messed it up so many times that this level of complexity could once again lead to failed execution, pushing Argentina once again into a free fall.

From a political standpoint, the situation has certain similarities to the post-2001 scenario. The convertibility which equated a peso to a dollar for over a decade had fallen, leading to a confiscation of deposits followed by a tough devaluation, which unleashed a wave of social discontent toppling the government of Fernando De La Rúa after failing to garner the support of the Peronist opposition—led by Eduardo Duhalde—and the IMF. Widespread protests, looting, and social violence erupted as the people called on the political class to disappear. In the 2003 presidential elections, Duhalde, who had become interim president after an institutional crisis broke out in the aftermath of De La Rúa’s resignation, supported a little-known governor from the Patagonian province of Santa Cruz, Néstor Kirchner. With 22.25 percent of the vote, Kirchner who had Daniel Scioli as his running-mate lost against former president Carlos Menem (24.45 percent), who desisted from facing off with him in the runoff and thus acknowledged defeat. Liberal economist Ricardo López Murphy came in third with 16.37 percent of the vote, followed by Adolfo Rodríguez Saá—who fleetingly held the presidency before being essentially forced out by Duhalde—(14.11 percent), and Elisa “Lilita” Carrió (14.05 percent). Blank and spoiled ballots votes totalled 2.72 percent despite widespread disillusionment with the political class.