After presiding over an impressive fifth year of economic expansion in Argentina, President Nestor Kirchner could have easily won a second term in the upcoming October elections. Instead, Kirchner is stepping aside to let his wife, Cristina Fernandez, seek the presidency. Cristina, who has often been compared to Hilary Clinton, has been a leading figure in the Senate for the past four years. Though her approval rating is not as high as her husband’s, Cristina (as she likes to be known) is still heavily favoured to win the October election. Recent polls conducted by El Clarin newspaper give Cristina a sizable lead over congresswoman Elisa Carrió and former economy minister Roberto Lavagna. Though the First Lady does not face a tough election, she will be confronted with great challenges soon after taking office. The booming economy that defined her husband’s presidency has recently been showing signs of ill-health. There are also many economic challenges remaining from the 2001-2002 crisis, and Cristina will be forced to deal with them early in her presidency.
Argentina is already in the midst of a large-scale energy crisis. This year’s bitterly cold winter forced the government to ration energy to factories and cut exports of gas to Chile in order to provide heating for Argentine homes. The energy policies enacted by Mr. Kirchner have proved to be unsustainable, and Cristina will likely have to back away from her husband’s economic populism in order to attract capital investment. Utility rates have been frozen since before the crisis in the old exchange rate, and companies cannot afford to invest or upgrade. Unfreezing the utility rates will be unpopular politically, but is an essential step toward revamping Argentina’s ailing energy sector.
Additionally, inflation has hit double-digit rates, and shows no signs of slowing. Though the current Kirchner Administration has attempted to mask actual inflation rates by manipulating the official cost-of-living figures, Argentines are noticing that prices are going up at local stores, restaurants, and grocery stores. Inflationary pressure on consumer goods is eroding the public’s confidence in the economy, and Cristina will have to prove that the country is not poised for a repeat of the 2001 economic meltdown.
Recent allegations of corruption in Mr. Kirchner’s Administration are also indicative of future challenges for Cristina. Former Economy Minister Felisa Miceli was forced to resign earlier this month after USD$32,000 was found in her office bathroom, and the Swedish company Skanska revealed that USD$25 million of "improper payments" were made to Argentine government officials during the construction of a large gas pipeline this year. A continuation of such scandals could eventually put Cristina’s credibility on the line. She has championed the issues of government accountability and transparency throughout her career in public service, and could see her political capital plummet if she cannot put an end to the endemic problem of corruption in Argentina.
Though all indicators point to an easy victory for Cristina Fernandez de Kirchner in the election this October, she is unlikely to enjoy a honeymoon period once assuming office. Cristina will immediately inherit many of her husband’s problems, and will be expected to provide effective solutions. The Argentine economy will yet again be the defining feature of a Kirchner presidency, though it is too soon to predict how Cristina will grapple with the challenges of inflation, energy shortages, and dwindling consumer confidence.
Read more about the Cristina Fernandez de Kirchner’s candidacy here:
What Kirchner and Clinton have in common blog post by ODI’s Lauren Phillip’s on July 17, 2007.
