Latin America Advisor

A Daily Publication of The Dialogue

Will Macri Be Able to Make Good on His Promises?

Conservative front-runner Mauricio Macri won Argentina’s presidential runoff election Sunday, defeating ruling party-backed candidate Daniel Scioli with 51.4 percent of the vote. Macri was elected in the first runoff in Argentina’s history, and he becomes only the third non-Peronist candidate to win the presidency since military rule ended in 1983. Is Macri’s victory as historic as his supporters suggest? With a 3 percent margin of victory, how strong is his mandate? What sort of cabinet will Macri assemble? Will he be able to make good on promises to unite Argentina’s divisive politics and implement more business-friendly economic policies? What changes can we anticipate in the first months of Macri’s presidency?

Abraham F. Lowenthal, founding director of the Inter-American Dialogue and a non-resident senior fellow of the Brookings Institution: "Mauricio Macri’s electoral victory brings to a close the twelve year rule of the Kirchners, years of relentless confrontation, heterodox economic policies and international closeness to Venezuela and the ALBA nations. It is far from clear, however, whether Macri can succeed in reversing many years of short-sighted economic policies, patrimonial governance, weakening of many institutions, endemic corruption and destructive discourse. Only time will tell whether Argentines, almost equally divided at the polls, can now come together in a national effort to change how politics and policy-making have been conducted. Impeccable national elections provide a hopeful start, but it will be hard to change embedded patterns quickly, especially as Macri will govern with a minority in both houses of Congress. One thing could change quickly, however. Argentina has deeply soured its relations with the international financial community, the U.S. government and the European Union, while taking the lead in incorporating Venezuela into MERCOSUR and turning UNASUR, the Union of South American Nations, into a protector of chavista Venezuela. Macri will surely try to resolve Argentina’s impasse with the international financial community, mend fences with the U.S. government and the European Union, and step back from close relations with Venezuela. Argentina could now work, inside and outside UNASUR, to support genuine dialogue in Venezuela and the renewal of effective democratic governance there. Venezuela has relied on UNASUR as a buffer against international pressures, but an Argentine shift—combined with tendencies in Brazil, Uruguay and Chile to review their role regarding Venezuela—will increase the pressure on Caracas to find a way out of the country’s dangerous cul-de-sac. With Colombia and Cuba cooperating to end the FARC insurgency, the United States and Cuba moving to rapprochement, and a steady weakening of the Venezuela regime’s popular support, a change in Argentina’s policy could well contribute to progress in unraveling the mess that Venezuela has become."

José Octavio Bordón, director of the Center for Global Affairs at Universidad Nacional de Cuyo in Mendoza and former Argentine ambassador to the United States: "With a new institutional map after Macri’s victory and recent state and legislative elections, we see an unprecedented shift in the balance of power in Argentina. The challenge is the building of parliamentary coalitions as well as accords between the provinces and the nation that guarantee governability and efficient policies. Macri is up to the challenge, but social and institutional issues will prove difficult. Daniel Scioli would have faced the same issues. With regard to his cabinet, Macri’s first decision was to choose Marcos Peña as chief of staff. In the past, the chief of staff has not paid as much attention to the traditional duties of coordinating the cabinet and budget, but with Macri’s management style, perhaps Peña will show us a change in the function of the cabinet. I also think that Macri will endeavor to balance the roles of young leaders of his party with parliamentary coalitions and the participation of other sectors of the cabinet. I think that, in the coming months, we should not expect that Macri will return to the neoliberal policies of the 1990s. He was elected on the promise of tolerance, transparency and dialogue, and right now the world is searching for a friendlier and more open government. I think we can expect an administration that is the result of synergy between the clear rules of the game, a present but non-invasive state, and a business sector that is more active and willing to take risks. I think he will also work to keep an open line of dialogue with unions and especially teachers’ unions in order to avoid the traditional conflicts that come with the start of classes in March."

Mario Rapoport, professor of economics at the Universidad de Buenos Aires: "Mauricio Macri’s victory is historic in the sense that no right-wing party in Argentina has managed to win the presidency in democratic elections. That’s not to say that in Argentina’s entire 200-year history, the right has not ruled the country for a longer period of time and through fraudulent governments, military dictatorships or those who started with an ideology that ended up being co-opted by other ideas. What is important is that for the first time since the advent of democracy 30 years ago, the sectors of the right did not need to resort to these means to come to power, and that they did so through their own party, the Pro, which is not directly linked to the old radical and Peronist parties. They also had on their side the powerful support of the mass media, along with the wear-and-tear of the current government, and a lack of memory, especially among the younger population who have neither lived through the repression of the military dictatorship, nor considered that the causes and scope of the 2001 financial crisis were driven by economic policies their allies had implemented. This does not excuse the serious mistakes of the outgoing government, in some of its policies, and in the persons elected to various positions, including the phenomena of corruption, although corruption also affected the city of Buenos Aires under Macri’s direction. Nor can we fully allocate the election result to the economic situation alone, which is undoubtedly fragile but not extremely serious. Hopefully this new government will continue to advance the course of further economic development, social inclusion and lower inflation. No doubt the government will be more favorable to greater economic and business opening, but it is also true that it has no majority in parliament or provincial governorships.”

Claudio Loser, president of Centennial Group Latin America and former head of the Western Hemisphere Department of the International Monetary Fund: "Since the advent of democracy 32 years ago, there have been three elected Peronist presidents, and with Macri, three non-Peronist ones. Unfortunately, the previous two non-Peronists did not even complete their terms. In turn, the two-Kirchner period extended for 12 years, the longest of any government stint in recent memory. Macri’s win is important, but it is historical only insofar as Cambiemos, his political party, is not linked to the economic center-left or the populist Peronist economic rhetoric. Macri’s mandate is significant, as he got almost as many votes as Cristina Fernández got when she was reelected four years ago, in the middle of the commodity bonanza. He is a capable leader, and has surrounded himself with capable people who have a good track record as problem-solvers and pragmatists, something that did not exist in the previous autocratic Kirchner period. But there will be conflicts, and many will complain because the fiscal, monetary and exchange rate policies are out of whack, and adjustment will be painful. It is expected that Macri will act decisively regarding crime and violence, exchange restrictions and inflation reduction, but probably will wait until the southern hemisphere’s summer. In addition, he will fix relations with domestic and foreign investors, and will seek a quick solution to the ‘vulture/holdout’ conflict. Still, Macri will need to build domestic alliances, and move carefully regarding social policies, which he actually said he would do. The road ahead is tough, but with his mandate he is likely to succeed."

Andrés Asiain, professor of economics at the Universidad de Buenos Aires: "The notion that the new administration will reverse 15 years of economic and social policy is difficult to conceive, even for a conservative government, given the natural tendency of individuals to resist what they can’t see. Macri has announced the formation of an economic cabinet, which meets under six ministries: labor; energy; treasury and finance; agriculture, livestock and fisheries; production; and transport. The fact that the ministry formerly known as the Ministry of Industry is now being called the Ministry of Production shows that industrialization has become a priority for the government, which one can see from the announcements that the new government would like to get closer to the Pacific Alliance, and with the newly-elected president interested in signing free trade agreements. This shows a movement away from the historical ‘Frondizi-Frigerio’ duo, which had only dealt with the United States when it came to access to loans and financial investments."

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