Macri’s election victory could put an end to an era of Argentinian nonsense. But the new president may find changing the country a complicated dance
They’d reigned so long over the country that some thought they were monarchs. But this weekend, after twelve years in power, the Kirchners lost control of Argentina’s presidency.
Cristina, who ascended the throne after her husband died in 2010, had to relinquish the job anyway. She’d already served two consecutive terms. But Ms Kirchner had put all her weight behind Daniel Scioli, her designated heir and the candidate of continuity.
In the end that wasn’t enough. Mauricio Macri, who created his own party just a decade ago, did start the race as an outsider. It was a big surprise when he came a close second in the first round of voting last month. But his campaign then gathered momentum as he promised to break away from the Kirchner legacy. Cleverly, however, he said he would keep the bits people like, such as Argentina's generous welfare programmes. That nudged him above Mr Scioli last Sunday, whom he beat by nearly 3 percent.
His arrival to power is an event in itself: for the first time in nearly a century, the country won’t be ruled by a candidate of the Peronist party or its smaller rival, the Radical Civic Union. But Mr Macri also pledges more fundamental change, starting with removing wide-ranging controls the Kirchners have imposed on the economy and opening it to the market.
Argentina’s new leader has the right pedigree to do it. The son of a wealthy businessman, a former president of the Boca Juniors football team and current mayor of Buenos Aires, he has more of a getting-it-done approach to things. And he's diagnosed the sources of Argentina’s malaise correctly.
Some of them he’ll be able to tackle rather quickly. Mr Macri wants to bring independence back to the central bank, the Supreme Court and the media. He probably won't wait too long before acting on his word: yesterday he “insisted” on the removal of Alejandro Vanoli, whom he reckons is “not fit” for the role of central bank chief. He also promises to shake up the statistics agency, who’s been massaging growth and inflation figures for years.
But Argentina really is in a deep economic mess, and one that goes beyond people and statistics. Inflation is running at about 25 percent, the currency is overvalued, foreign currency reserves are wafer-thin and the fiscal deficit will likely hit 6 percent this year. The economy remains shacked by currency and trade controls, and a crackdown on foreign-currency buying has created a dual exchange-rate regime. The dollar, worth 9.6 pesos at the official rate, is sold 15 pesos on the black market.
Removing these controls and unifying the currency regime are both part of Mr Macri’s economic priorities. But restoring financial freedom could see the peso collapse and capital flee. To avoid this, Mr Macri must raise dollars on overseas markets and rebuild the country’s reputation as a place to invest. That requires putting an end to a legal dispute between the country and international creditors that started after its 2001 sovereign default. To achieve this, however, he must get approval from Congress – where his party doesn’t hold a majority.
Macri may find it easier to make his mark in foreign policy. He wants to distance the country from China, Venezuela, Russia and Iran so as to normalise relations with the US and Europe. Yesterday, he reiterated his plan to ask Mercosur, a South American trade grouping, to suspend Venezuela from membership unless its December parliamentary elections are conducted in fair fashion.
This would be a first in South America. And it would give a sense of how the continent could swing back to the centre right in the wake of his victory, as left-wing leaders from Venezuela to Brazil face demands for cleaner government and better economic stewardship. For a couple of years Latin American streets have been singing the tune of change. The music is now getting louder.