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Argentina’s economic woes spell doom for Macri’s election prospects

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Via Financial Times

Argentina’s president Mauricio Macri sounded almost apologetic as he addressed a crowd in the heart of the country’s Malbec wine-growing region, to make his case for another term.

“We all know that recent times have been difficult, especially the last year and a half . . . but I want to tell you that I have listened to you and I have understood, I have taken note and I have comprehended.”

“Now something different is coming,” he added, promising a changed approach.

But everything suggests that the “something different” in store for Argentina is Mr Macri’s main opponent; Alberto Fernández, a leftwing Peronist running on a ticket with ex-president Cristina Fernández de Kirchner. He is the out-and-out favourite to win the election on October 27.

A second consecutive year of recession, a sharp devaluation of the peso, a record-breaking $57bn IMF bailout, rising poverty and worsening unemployment would be dire for any candidate seeking re-election. But for a scion of one of the country’s wealthiest families, they are especially toxic. Hence Mr Macri’s contrition.

The middle-class crowd of a few thousand gathered in a square in the city of Mendoza cheered dutifully and waved banners with the campaign slogan “Yes we can” as the president worked his way through a stump speech that lasted barely 20 minutes, his voice failing at times. His wife Juliana Awada, clad in designer black, laid a comforting hand on his shoulder, exuding the effortless millionaire elegance that won her a Vogue “best dressed” acclamation. A drone hovered overhead gathering images for use on social media. The warm-up act came courtesy of the son of a soy baron.

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Nothing at the rally was likely to dispel Mr Macri’s image as a very wealthy man who is out of touch with the economic hardship facing most of the population under his government.

The coup de grâce to Mr Macri’s faltering campaign came with a nationwide primary election on August 11. Widely regarded as an accurate barometer of voting intentions, the results showed the president losing by a huge margin of 16 percentage points to Mr Fernández.

Almost overnight, Mr Macri’s campaign deflated. Investors took fright at the prospect of a Peronist return to government and dumped Argentine assets, triggering a slump in the stock market and another big lurch down in the value of the peso. Mr Macri’s already battered credibility took another blow when the government was forced to postpone repayments of domestic debt and impose exchange controls.

Alberto Fernandez, presidential candidate for the Citizen's Unity Party, waves while arriving to cast a ballot during primary presidential elections in the Puerto Madero neighborhood of Buenos Aires, Argentina, on Sunday, Aug. 11, 2019. Argentines head to the polls Sunday in a primary vote that will be the best gauge yet of President Mauricio Macri’s chances of winning a second term in this year's election. Photographer: Sarah Pabst/Bloomberg
Alberto Fernández is the favourite to win the election on October 27 © Bloomberg

Business people had high hopes for Mr Macri when he took power but many have lost patience after his administration’s repeated mis-steps on the economy. “This is one of the worst governments ever, far worse than expected,” fumed a senior banker based in Buenos Aires. “Our expectations were so high that the crash has been much worse: it’s like falling from the 25th floor head first.”

Opinion polls failed to predict Mr Macri’s heavy defeat in the primaries and so their predictions of a resounding victory for Mr Fernández are being treated with caution. But nonetheless, it is hard to find anyone in Buenos Aires who believes Mr Macri, the son of a multimillionaire property developer, is heading for anything other than a heavy defeat.

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“The perception now is that Macri is an idiot who has no sensitivity to people, is upper-class and doesn’t understand anything,” said Luis Tonelli, chair of the department of political science at the university of Buenos Aires.

Mr Macri’s press staff say he is not giving interviews to international news media during the campaign and his close aides were not willing to talk on the record. Privately, some admit they are already preparing for life outside the government when his term ends in December.

A trained civil engineer, Mr Macri was able to overcome a lack of charisma and weak oratorical skills to win a runoff in the 2015 presidential elections, in part because Argentines were fed up with the previous government, which was mired in corruption scandals and leaving behind a chaotic economy.

He made some advances tackling corruption and improving institutions, pushing through laws that enable plea-bargaining and increase control over campaign financing, as well as making bidding for public contracts more transparent.

But on the economy, Mr Macri presented himself in 2015 as the candidate of the future, promising that his team of competent technocrats would fix Argentina’s economic woes. Now, having signally failed to do so, he is falling back on an Appeal to values such as tolerance and democracy that have little resonance beyond his middle-class base.

“His election strategy is totally wrong,” said a political consultant based in Buenos Aires. “He is not doing what he should be doing — attacking the opposition candidate head-on. He never even mentions the opposition.”

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Mendoza, a prosperous city of 930,000 in the west of Argentina, should be natural Macri territory as a stronghold of the Radical party, one of the members of Mr Macri’s ruling Cambiemos coalition. Yet such is the president’s unpopularity that the Radicals won the governor’s election last month by running a campaign that avoided any mention of the president.

Nonetheless, the genteel crowd in Mendoza had not completely given up hope. “We are doing this for our country,” said Sofia Mulero, a well-dressed lady in her seventies sporting designer sunglasses and wrapped in an Argentine flag. “We don’t want to go back to the past.”

“We must end this culture of leeching off the state,” chimed in her friend, Marta Ruiz. Norma Nicolai, a third member of the group who all described themselves as businesswomen, promised despairingly she would leave the country for Spain if Mr Macri loses. “I have already sold my house,” she said.

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