When Macri assumes office on December 10, it will be the first time in 99 years that Argentina has not had a Peronist, Radical, or military government, and the first time in the nation’s history that an engineer has been the head of state.
By Dr. R. Evan Ellis
The Victory of Mauricio Macri in Argentina’s November
22 run-off election is good news for Argentina and for Latin America, and
presents an important opportunity for the United States.
Image Attribute: Mauricio Macri and Daniel Scioli
Photo by Nahuel
Padrevecchi (Jan 3, 2013) / Source: Wikimedia Commons
Scioli is the FPV candidate in the 2015
Argentine presidential election, and was endorsed by incumbent President
Cristina Fernández de Kirchner. The initial polls pointed him as a favourite,
with chances to become president in the first run and avoid the ballotage, but
he got to a narrow-margin victory with Mayor Mauricio Macri. The runoff was
held on November 22. Scioli lost the elections, and accepted his defeat when
70% of the votes were counted.
When Macri assumes office on December 10, it will be the first time in 99 years
that Argentina has not had a Peronist, Radical, or military government, and the
first time in the nation’s history that an engineer has been the head of state.
The presidency of Mauricio Macri also
promises to take the nation on a course that is significantly different than
that which it has pursued for more than twelve years under the late Nestor
Kirchner and his wife Cristina Fernandez. The President-elect has already
pledged to pursue a far more pro-market economic policy than did the Kirchners,
and a foreign policy that moves the nation away from the Bolivarian Alliance
for the Americas (ALBA), while seeking to rebuild Argentina’s ties with nations
such as Colombia,
Chile and Brazil, and possibly with the United States. As
columnist Andres
Oppenheimer has noted, Macri’s presidency may represent a turning point in
the strategic dynamics of Latin America and the Caribbean. The highest
profile “Bolivarian socialist” regime in Latin America, Venezuela, is in the
middle of a prolonged political and economic collapse, with the poor
performance of its economy, widespread corruption and criminality, and the
bizarre behavior of its leadership tarnishing the attempts of all radical left
governments to address the region’s very real issues of poverty, inequality,
and dysfunctional institutions.
Meanwhile, Cuba has temporarily lowered its
profile as the traditional intellectual leader of the Latin American left while
it seeks to escape from the U.S. sanctions regime that has crippled its economy
for 55 years, and Brazil, the region’s most prominent experiment in blending
socialism with a market economy is expected to see its economy contract 3
percent this year, even while its government continues to be paralyzed by the
vast, unfolding Petrobras corruption scandal. Macri has already promised to
seek Venezuela’s expulsion from the trading block Mercorsur for violating the
organization’s democratic charter.
In many ways, the 2015 Argentine and
Venezuelan elections, held within just two-months, have influenced each other.
The political charade of Venezuelan populism has arguably shamed Argentines
into demonstrating that they can escape on their own volition from a similarly
destructive downward cycle. On the other hand, the loss of Cristina’s
Victory Front (FPV) in Argentina, like the 1990 loss of the Sandinistas in
Nicaragua, reminds the Maduro regime in Venezuela that it risks being stripped
of its power if it does not sufficiently control, or avoid, the elections. For
senior Venezuelan government and military leaders, the implication of such a
defeat goes beyond a loss of power and prestige, since it could lead to their
imprisonment on criminal charges, or extradition to the United States.
Yet if the Macri victory in Argentina
motivates Venezuela’s leadership to redouble its efforts to win at any cost, it
also exerts a restraining influence. Since the Macri government will be
inaugurated just four days after elections in Venezuela, the Maduro government
will not be able to count on an ideologically sympathetic Argentina to validate
the outcome in Venezuela if there are widespread signs of irregularities.
Beyond Venezuela, the new Macri government is also likely to be
particularly well received in both Guyana and Colombia, each of which have
faced recent threats of military action by Venezuela, with varying degrees of
credibility. Moreover, Macri’s reported interest in strengthening Argentina’s
relationship with the Colombian government may also facilitate a more rapid
culmination of Colombia’s current peace negotiations with the Fuerzas
Armadas Revolucionarios de Colombia(FARC), by strengthening the hand of the
Colombian government, while weakening Venezuela, a key ally.
With respect to multilateral affairs, the
incoming Macri government is reportedly interested in strengthening the
nation’s relationship with the Pacific Alliance, comprising Chile, Peru,
Colombia, and Mexico, although not ready to formally join the pact. An
Argentina-Pacific Alliance bond would arguably push neighboring Brazil in a
similar direction. The two initiatives, in combination with the finalization of
the Trans Pacific Partnership, would re-energize progress in the Pacific
Alliance, and by extension, a market-based model of economic engagement in the
Americas.
The victory of Macri in Argentina will also
have impacts beyond the region. On one hand, Macri’s assumption of power will
probably put Argentina’s rapproachment with Iran on hold, although the lifting
of sanctions on the later by the international community through its nuclear
deal with the U.S. could deepen its importance as a customer for Argentine
agricultural goods.
With respect to China, driven by the growing
political and economic isolation of the outgoing Cristina government, Argentina
has increasingly turned to the PRC as a key benefactor. Major deals include two multi-billion
hydroelectric plants on the Santa Cruz river valued at $4.7 billion, a
$10 billion renovation of the nation’s largest rail system, the Belgrano-Cargas
line, and most recently, a $6 billion deal to construct a new nuclear
reactor at the Atucha complex.
While a number of the deals with China
ironically involve the incoming president’s own father, Francisco Macri, his
son has promised a review of the legality of at least the recently
signed nuclear reactor deal. The government will probably honor its
legally-binding contracts with China, but Argentina’s likely eventual return to
international business and credit markets will expand the nation’s alternatives
for much-needed capital, reducing the PRC to merely one business associate and
creditor among many.
As with the PRC, the privileged position of
Russia for Argentina may similarly be diluted. While Russia will likely
continue to be an important purchaser of Argentine beef and a player in the
electricity sector, including construction of the $2 billion Chihuido-1
hydroelectric facility and possibly
future nuclear plants, a Macri government is likely to move Argentina away
from both Russia and China with respect to defense collaboration, and back
toward Brazil, at least with respect to weapon system procurements.
All these changes will be positive for
Argentina, the region, and for the United States. But without adept maneuvering
by the Macri government, and an exceptional commitment of resources and
attention by the United States, there are no guarantees.
Following the fall of the Berlin Wall in
1989, many of the countries of Latin America and the Caribbean briefly embraced
U.S.-style democracy and free markets as the path to development, electing
pro-US, pro-market leaders to power across the region including Fujimori in
Peru, Cardozo in Brazil, and Menem in Argentina, privatizing state-owned
companies and pursuing market-friendly policies under the rubric of the
Washington Consensus.
Yet in the wake of its enormous victory in
the Cold War, the United States failed to recognize the importance of investing
substantially in the regimes that put their faith in the U.S. approach, in
order to ensure that their experiment succeeded. When their policies proved
insufficient to address the problems of underdevelopment, inequality, and
corruption long endemic to the region, those regimes began to turn to
alternative solutions, including “Bolivarian socialism.”
For the same reason today as then, the United
States has a strong interest in investing attention and resources to help Mr.
Macri and his incoming government to succeed in bringing development and
prosperity to Argentina through free market and free trade policies. The task,
though, will not be easy.
While the forces of the left are likely to defer to Macri during a brief honeymoon period, his narrow 51.4 percent to 48.6 percent victory is not a mandate that will keep the opposition at bay for long. Moreover, although Macri will have control over the province of Buenos Aires and the government of the autonomous city of Buenos Aires, as well as the national executive, his Cambiemos coalition will have only a minority presence in the Senate, and close to a parity with the opposition in the lower Chamber of Deputies. Nor will Mr. Macri’s coalition hold a majority of the nation’s 24 governorships. Thus, for Cristina Fernandez de Kirchner and the Peronists, who hope to return to power in four years, paralyzing the government in the Argentine legislature, and through street protests, will be a tempting, and relatively easy strategy, albeit one with disastrous consequences for the Argentine people.
Although the United States is far from
Argentina, there are pragmatic ways in which the U.S. can help President-elect
Macri to succeed.
A U.S. appeals court has already eased the
burden for Argentina in its negotiations with creditors seeking full payment for
the debt that Argentina defaulted
on between 2001-2002. It is already rumored that Macri will travel to
New York prior to assuming the presidency to meet with representatives of the
creditor organizations to negotiate a deal that would pave the way for the
government to return to international bond markets. With a show of good faith
on the Argentine side, the U.S. government could facilitate, and perhaps even
underwrite such a deal.
Succeeding in this venture will become
particularly important for the country as it seeks to manage the debt
accumulated by the Cristina administration in the run-up to the elections,
including an estimated $19 billion owed to China.
The U.S. government can also encourage
Western companies to return to Argentina, including tax incentives and programs
to expand technology partnerships in areas such as space, telecommunications,
agricultural technology, and petroleum, particularly given Argentina’s substantial
shale oil potential in fields such as Vaca Muerte. The United States may
also have much to offer Argentina with respect to collaboration in the fight
against narcotics trafficking, human trafficking, and other forms of organized
crime. Narcotics trafficking in Argentina, for example, has expanded
dramatically in recent years with new drug routes from source
countries like Peru, Colombia and Bolivia, through the Atlantic coasts of
Brazil, Uruguay and Argentina, on to Africa and Europe.
The U.S. may also wish to actively seek
opportunities to renew professional military education and training exchanges,
largely cut off under the previous government. One place to start could be
inviting Argentina to again send officers to the U.S. Army War College, where
international students study the same curriculum, alongside of their U.S.
counterparts. The U.S. and Argentina may also be able to expand
collaboration against international terrorism. While not all terrorist groups
are Islamic, Argentina has the largest muslim community in the region after
Brazil, and many of the Islamic terrorist cells uncovered in the region have
had ties to Argentina, including Mosheen Rabani, the Iranian diplomat
accredited in Buenos Aires, who reportedly worked from his base in the country
to recruit terrorists in other Latin American countries, such as Abdul Kadir,
who reportedly developed a plan in 2007 to blow up New York’s John F. Kennedy
airport.
For its part, the Argentine government has
long sought justice and clarification regarding the 1992 and 1994 attacks
against Jewish targets in the greater Buenos Aires area, and probably would
welcome U.S. technical assistance and resources as it continues its efforts to
get to the bottom of the case. Indeed, as recently as October 2015, Argentina
experienced an elevated alert when one of its consulates received a report of a
possible attack by terrorists of Malian ethnicity against a major shopping
mall.
In the context of such collaboration, the
U.S. may also consider temporary programs that reduce tariffs paid for selected
Argentine products to enter U.S. markets, similar to benefits conferred to
Bolivia, Colombia, Ecuador and Peru under the Andean Trade Pact.
With respect to China, the United States must
be respectful of the right of both nations to conduct business with each other
to achieve mutual benefit, yet also recall that economic engagement with the
PRC generates concerns for a range of actors within Argentina, from
manufacturers to environmentalists. Within the framework of recognizing the
legitimacy of China-Argentina trade and economic engagement, the U.S. can help
Argentina to strengthen its institutions and legal frameworks, so that the
latter can conduct business with the PRC efficiently, yet in a way that does
not unfairly prejudice Argentine merchants or threaten the environment.
The United States can also help Argentina
strengthen its institutions beyond the domain of commerce. Frustration with
corruption runs deep in Argentina. The U.S. can help Argentina build an
effective government and the rule-of-law that ensure that the spoils of
economic opportunity are not captured solely by a well-positioned few. Indeed,
building such an effective government is instrumental for the acceptance and
health of free market capitalism, and distinguishes the U.S. from other suitors
which do not care about the internal affairs of their associates, so long as
they profit from them.
Even with a carefully crafted policy backed
by ample resources, the path ahead for the United States to rebuild confidence
with Argentina, and help the new Macri government success will not come easily.
Beyond President-elect Macri’s domestic political problems, Argentina also has
one of the highest rates of anti-American sentiment recorded
in the continent. Such distrust will require years to overcome in a
bureaucracy and a popular culture that was molded for twelve years by the
anti-U.S. orientation of the Kirchners.
In addition, whatever the willingness of
President-elect Macri to improve relations with the United States, the PRC will
continue to actively work to maintain its own strong relationship with the
country. Indeed, the PRC will continue to have an enormous capacity to benefit
Argentina through the purchase of its agricultural products, the performance of
loan-based construction projects in strategic sectors such as hydroelectric and
nuclear energy, and to work with both the Argentine government and private
sector in areas such as space and military collaboration, telecommunications
and banking. Indeed, with the collapse of Venezuela, and the ongoing political
crisis and economic contraction in Brazil, the strategic importance of
Argentina for the PRC will only grow.
For those who follow Argentina, one of the
few constant features of the nation’s political dynamic is its ability to
alternate between impressive achievements and (often partially self-inflicted)
crises. Yet whatever the long-term cycles of the country, if the United States
can help President Macri demonstrate that free markets, democracy and
responsible government produce equitable development and prosperity, the
results will be transformative for the region.
About The Author:
R. Evan Ellis is professor of Latin American
studies at the U.S. Army War College strategic studies institute. The views
expressed in this article are strictly his own.
The author extends his sincere thanks to
those Argentine and U.S. scholars who provided important inputs for this
article, including Ambassador Lino Gutierrez, Jorge Malena, Andrei Serbin Pont,
Julio Cirino, and various others who preferred to remain unnamed.
_________________________
Publication Details:
This article first published at Latin America Goes Global on November 24, 2015.
It has been republished with author's permission.
All rights are held by the Original Publisher.
