WASHINGTON – After 12 years of semi-deranged left wing populism managed by Cristina Fernandez de Kirchner, the political heir of Peron’s tradition, Argentina decided to sober up. Contrary to expectations and many polls, Daniel Scioli, outgoing Buenos Aires Province Governor and designated successor to Fernandez, did not make it. As he did not get a majority in the first round, he was forced into a second round by Mauricio Macri, the Mayor of Buenos Aires and the founder of the “Let’s Change” opposition coalition.
Since he was leading after the first vote, Scioli could have won. But instead Macri finished ahead, by a good margin, (more than 52% of the vote).
This is a major political and hopefully economic transformation in one of Latin America’s largest economies. Macri is a free market conservative who intends to do away with the crazy policies of the Peronists, including currency controls and the creation of a bloated public sector used almost entirely to give jobs to political supporters.
Difficult job for the new President
Will Macri succeed? Will he unleash private enterprise, create jobs and attract more foreign investors? I should hope so. But it will be extremely difficult. Argentina has been mismanaged for several years. And right now it is in a bad spot. The commodities boom is over. Revenue from exports has dwindled. Inflation is rampant. People look for US dollars in the black market.
It will take time
And it is to be expected that the voters’ good will towards Macri will not last very long. People who voted for change are impatient and they expect quick results.
Understandably, they want jobs, higher salaries, the end of inflation, and more. Certainly Macri can put an end to the ongoing international litigation about some aspects of the Argentine debt default (December 26, 2001) that have prevented Argentina to fully access international financial markets.
A pro-business government in Buenos Aires will attract many more foreign investors. And Macri can start work aimed at improving public administration. After all he got a pretty good training as the Mayor of Buenos Aires, Argentina’s largest city.
Therefore, the prospects for an improved economy are good. However, it will take a long time before the average Argentine voter will see results. Structural reforms aimed at fixing old, systemic problems cannot be improvised. It will take time.
Tell the truth
Let’s hope that President Macri will be able to tell the truth about the arduous road ahead and retain at the same time the confidence of the people who just elected him.
There is no doubt that he wants to be a pro-business reformer. The question is whether he will have the time to do what needs to be done while keeping a restless nation behind him.
I wish him well.