There were no surprises in Argentina’s presidential election on Oct. 27, when leftist candidate Alberto Fernandez, with former President Cristina Fernandez de Kirchner as his running mate, defeated the center-right incumbent Mauricio Macri. That outcome had been anticipated by primary elections—essentially a preview of the vote—held in August, when the Fernandez-Fernandez ticket trounced Macri as Argentina’s economy continued to deteriorate. The new administration will take office on Dec. 10.
For Cristina Fernandez, this is all personal vindication. When her presidency ended in 2015, she left behind economic stagnation and a trail of corruption allegations. She attempted a political comeback in the 2017 legislative elections, when she won a Senate seat herself, but her party was soundly defeated by Macri’s coalition. Although she had immunity from the various corruption charges as a member of the Senate, her political career seemed to be nearing its end.
But then, last spring, she made an unexpected and bold move for reconciliation with Alberto Fernandez, a onetime political ally who had served as chief of staff to her late husband, former President Nestor Kirchner, and held the same position briefly during her own presidency. Alberto Fernandez later broke with Cristina, criticizing her administration publicly. In May, in order to seize on Macri’s sinking popularity and reunite the fractured Justicialist Party, she decided not to run for the presidency herself but instead anoint the more moderate Fernandez as the Peronists’ candidate—with her as vice president.
The gamble worked, but now the campaign is over. The incoming administration is faced with a series of mounting challenges, some caused by Macri’s mistakes and others the product of long-term, structural problems that no Argentine government has been able, or willing, to resolve.
During the campaign, the Peronist ticket attacked Macri’s “neoliberal” economic policies and promised to boost domestic spending, end austerity and protect local industries from foreign competition. This message resonated with many Argentines, who have been suffering through a two-year-long recession, rising inflation and real wage drops despite Macri’s frequent promises of an imminent turnaround, mainly through a $57 billion bailout from the International Monetary Fund. Alberto Fernandez has likened this situation to the one he faced as Kirchner’s chief of staff in 2003, in the aftermath of Argentina’s worst economic crisis in its history.
President Fernandez will make the decisions, but Vice President Fernandez will certainly have some veto power over them.
Yet nostalgia aside, Alberto Fernandez will take office in a very different context. Macri has trimmed the fiscal deficit, but it remains high, at 4 percent of GDP. Foreign debt has ballooned and stands at around 80 percent of GDP. The incoming government will have to undertake a tough renegotiation with private bondholders and with the IMF, which will continue to supervise Argentina’s economic policies for many years and will certainly push for a continuation of austerity. The Central Bank also recently imposed severe restrictions on the currency market to protect its dwindling hard currency reserves. Most importantly, Nestor Kirchner governed during very favorable global economic conditions in the mid-2000s, when China’s rise and a commodities boom boosted the price of Argentina’s exports, leading to a quick economic recovery. Alberto Fernandez will not be that lucky, as the global economy today feels the impact of a Chinese slowdown and a more protectionist and erratic United States under President Donald Trump.
Fully aware of these challenges, the president-elect will try to buy time. He has already signaled plans for an agreement between labor unions and businesses to contain price increases, and provide some limited raises in subsidies and public pensions. Sooner or later, though, he will face tough choices. Despite his campaign promises, his cash-strapped government might be forced to keep most of Macri’s austerity plans in place. This will likely generate tension within the diverse Peronist coalition, which includes a powerful left wing led by Cristina Fernandez alongside several more moderate groups linked to Sergio Massa, a former Peronist dissident and key ally of the new president, and prominent provincial governors. Alberto Fernandez is expected to appoint a moderate politician as economy minister to reassure investors, but it remains to be seen if a Cabinet that includes representatives from his crowded coalition can function coherently.
To complicate things further, Alberto Fernandez didn’t win the resounding electoral mandate he was expecting. He got 48 percent of the vote over Macri’s 40 percent, much lower than the 15-point advantage he had in the August primaries. Macri’s coalition also retained many seats in Congress, which will force Alberto Fernandez to negotiate for every bill—and perhaps increase his dependence on his vice president, who might have given up the presidency but not the power. Cristina Fernandez still has a loyal following among poorer Argentines, who are key to the Peronist base, and she can count on several powerful political allies. Her Peronist faction controls dozens of seats in Congress, and her former economy minister, Axel Kicillof, is now the influential governor of the province of Buenos Aires. President Fernandez will make the decisions, but Vice President Fernandez will certainly have some veto power over them.
In addition to turbulence at home, the new government will also have to navigate a more complex region. Its natural Latin American partners are President Andres Manuel Lopez Obrador in Mexico, whom Alberto Fernandez will visit in November, and Bolivia’s president, Evo Morales—hardly a broad coalition. Relations with neighboring Brazil under far-right President Jair Bolsonaro are bound to be tense. In his victory speech, Alberto Fernandez called for former Brazilian President Luiz Inacio Lula da Silva, a hero of the Latin American left, to be released from prison. Bolsonaro, in turn, refused to congratulate the president-elect and said Argentines had “made a bad choice.” Both leaders benefit politically from their rivalry and are sure to stoke it.
Another contentious topic is Venezuela. Alberto Fernandez will not align with President Nicolas Maduro’s regime. But he could still take Argentina out of the Lima Group, a 12-country bloc pressuring Maduro to step down, and withdraw diplomatic recognition to opposition leader Juan Guaido as the country’s legitimate interim president. Although that would have little impact on the disaster in Venezuela, it might complicate Argentina’s relations with Washington.
Even under the most optimistic scenarios, the first years of Alberto Fernandez’s presidency will be extremely difficult. The economic situation is dire, and there is little public patience for more austerity. In a country used to having strong leaders, Alberto Fernandez’s dependency on his still-popular but polarizing vice president could weaken him politically. Sooner or later, this contradiction will need to be resolved, and one of the two Fernandezes will be left standing.