Tuesday, June 18, 2024

OP-ED | 27-05-2023 06:54

Are 20 years really nothing?

Those who expect a direct correlation between electoral success and economic growth would find Argentina again bucking the trend in the last 20 years.

Thursday’s 20th anniversary of Kirchnerism finds its wheel turned full circle even if opinions may be divided as to whether it was a great or small wheel (the Mahayana and Hinayana of Buddhism). If the movement is stuck over its presidential candidacy now with Thursday’s Plaza de Mayo rally underlining that the decision has fallen on Vice-President Cristina Fernández de Kirchner (self-demoting in the last election and now self-excluding) by default, the situation was similar at the start of 2003 – having gone through one governor of a major province after another (first Santa Fe’s Carlos Reutemann and then Córdoba’s José Manuel de la Sota, both now deceased), outgoing caretaker president Eduardo Duhalde found himself turning to the governor of one of the least populous, Santa Cruz’s Néstor Kirchner, with the rest history, as they say.

The wheel turning full circle also includes Kirchner restoring a shattered presidential authority and a devastated post-convertibility currency amid a public opinion yelling its “Begone with them all” disgust with politicians, only to arrive at a very similar situation today – a puppet president, a peso ravaged by three-digit inflation and a political “caste” in massive disrepute. Perhaps the most striking difference between then and now is how an extravagant personality cult has replaced the “ordinary people doing extraordinary things” of 2003, in the words of a former United States ambassador.

But what came in the middle (which also includes four years in opposition)? Starting at the electoral level, the process has been anything but linear. That first election in 2003 was technically a defeat since Kirchner finished two points behind Carlos Menem in the first round – if a gloomy Kirchnerism imagines its popularity to be rock-bottom today when falling below 30 percent in the opinion polls, its founder only garnered 22 percent (even if 60 percent of the vote then went to a Peronist of one stripe or another). The 10 general and midterm elections since then have seen a negative balance of four won and six lost even if the losses were all respectable totals until now while the highs included the 2011 landslide of 54 percent.

Those who expect a direct correlation between electoral success and economic growth would find Argentina again bucking the trend in the last 20 years. While Kirchnerism has only won four of the 11 elections since and including 2003, it can boast economic growth in 12 of its 16 years in office in the two decades between 2003 and 2022 as against one out of four for the 2015-2019 Mauricio Macri presidency. While Kirchner technically lost the 2003 election, he was also technically the most successful president in Argentine history when measured by macro-economic indicators – “Chinese” growth averaging over eight percent annually along with twin fiscal and trade surpluses. Yet that success was also as relative as his electoral defeat. Firstly, the statistics were fudged as from 2007 – almost everybody realised that the inflation figures were mendacious but it was less seen that the growth figures were also contaminated since hiding inflation led to real growth being confused with nominal growth. Secondly, the inflation then concealed accompanied by negative interest rates almost guaranteed consumer-led growth because of the pressures to spend which are so palpable today but this has been at the expense of savings, investment, exports (plundered by “retentions”) and long-term progress.

Perhaps the main legacy of the Kirchner years has been the massive growth of the public sector, quantified by opposition presidential hopeful Patricia Bullrich as rising from 23 to 42 percent of gross domestic product since 2003. Factoring in the GDP growth since then (around 40 percent under Néstor Kirchner, 20 percent in the first term of his wife and not much since), this would leave the private sector growing by less than one percent annually in that period. A totally negative legacy if we accept the simplistic opposition critique of all that money being squandered on public works corruption and a useless bureaucracy. But even if the quality of public spending is anything but optimal, the bulk has gone towards the construction of something resembling a welfare state which has contributed to making asymptomatic crisis something of a Kirchnerite specialty.

Yet the sustainability of a system already precarious in economic terms becomes doubly vulnerable when tied to political fortunes via the state which is why we see the wheel turning full circle on its 20th anniversary. Some would say the end of an era, others the end of an error and both could still be wrong.


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