October 29, 2010

RIP Nestor Kirchner

Buenos Aires Thursday Oct 28, 2010 Thirty five thousand Argentines, mainly supporters of Nestor Kirchner's "Peronist" party, waited patiently in front of the Presidential Palace, The Pink House or "Casa Rosada". They were there to pay their respects. In the closed coffin is the body of a sixty year old man who died the day before, census day, in his home town in Patagonia. Former President Nestor Kirchner, husband of the current Argentine President Cristina Fernandez de Kirchner was dead. Nestor died early on Wednesday morning of a massive heart attack after he refused to scale back his political activities against the advise of his doctors. He had recently had two cardiac surgeries.

Many Latin American presidents came today to say goodbye to Nestor and to show their support for his wife president Cristina. This show of support is important with presidents Evo Morales, Rafael Correa and the recently elected Chilean president Sebastian Pinera, arriving Thursday morning with hugs of support for Cristina. She wore sunglasses looking subdued in front of the teeming crowds visiting her husband's sarcophagus. President Chavez of Venezuela and four more Presidents arrived later this afternoon. They came to honor an Argentine statesman, a negotiator, an adversary and a partner, the first president of the new UNASUR nation group to which they all pertain.

The Argentine and the international right-wing were quick to attack President Cristina contributing to an environment of doubt, uncertainty and an even deeper division in the country. This attack was reflected in the two largest Argentine newspapers, La Nacion and El Clarin representing national and transnational capital in the industrial and rural sectors respectively. They were both somewhat subdued in their commentaries today, just a day after Nestor Kirchner's death, but shall surely return to their daily attacks on Cristina Kirchner after her husband is buried.

Somewhat predictably, the editorial and opinion section of the Argentine newspaper of reference, La Nacion, succumbed to the temptation of comparing the situation of the widowed president, with that of Peron's third wife at the time of Juan Peron's death in the nineteen seventies. When Juan Peron died, his wife Isabel Martinez was vice-president. Peronīs sudden death left the Argentina presidency in the hands of the inept "Isabelita" leading swiftly to terrorist shoot-outs in the power vacuum. With factions fighting in the streets, then came the paramilitary death squads, the famous triple-A, and then the military coup of 1976. After the military took over the nation was run by the junta dictatorship and the financial dictates of economics minister Martinez de Hoz.

This military-financial dictatorship left the Argentine economy burdened by public sector debt from corruption and military expenditure. There were frequent illegal disappearances resulting in the deaths of tens of thousands in state terrorism. Argentina was literally dragged kicking and screaming into the arms of transnational capital. The dictatorship laid the groundwork for the corruption of Menem who privatized the jewels of this once proud government. Industries such as the oil sector were sold for pennies on the dollar and more than ten bilateral investment treaties were signed by presidential decree to protect those illicit investments. In 2001-2002 the economy finally collapsed under the load of more public debt and the emergency that gave Naomi Klein, then a resident in Buenos Aires, the idea for her book: The Shock Doctrine.

In 2003 Nestor Kirchner was elected president. The nation had for many months repeated bouts of anarchy in the streets. The country had yet to settle the largest national public debt default, the largest in history. Its architect the infamous Cavallo had left town. He was the economics minister who had brought the plans of Martinez de Hoz to fruition under Menem. He decided it prudent to take up a faculty offer with the Harvard Economics Department. Nestor maintained his predecessor's finance minister Roberto Lavagna. Lavagna effectively organized the settling of 65% of the financial default in swaps in 2004. One wonders who might soon fill such a a key role in Athens, Dublin, Lisbon or Madrid?

Nestor Kirchner was preceded by an intense period of turmoil during which presidential candidates and presidents themselves were rejected by the electorate and tossed out by the mobs in the street. Middle and working class anger reached peaks which railed against the corruption. They were incensed by the closing of their bank accounts, and subsequent devaluations of 75% of their savings in those same coralled accounts. The Argentine "Corralito" meant that ordinary people had their savings dissolved by their own government. They were fighting mad. Between 2001 - 2003 three Argentine presidents were overthrown till Nestor Kirchner took power,. He managed to stabilize the situation and finishing his presidential term in 2007. The economy recuperated its losses quickly though with greater inequality. Nestor literally rescued his nation from the brink.

On the economic front, rather than promoting an industrial development agenda, Nestor's political economics could best be described as a survival agenda. Progressive taxation measures on corporations and primary exports paid for populist aid measures favoring the real poor but Nestor Kirchner unfortunately failed to implement an anti-corruption agenda. This compounded attacks on his government, the traditional rural sectors resisting taxation, joined by subsidy wars and anti-monopoly laws affecting the Clarin Group (an Industry and Media Conglomerate). Neither had an ambiguous relationship with interests represented by the Argentine Rural Society, founded by the grandfather of former junta minister for economics; Martinez de Hoz. He angered them by retained export taxes on bulk grain exports but fed them subsidies at the same time.

In 2007 the Argentine electorate voted that Nestor hand over the presidency to his wife Cristina Fernandez de Kirchner. Cristina inherited an even more intense attack from the right albeit her government, the smallest economy in the G-20, continued their rapprochement with the IMF. The attacks continue even after her government lost a polemic tax battle with the agroindustrial sector. Cristina continues to emphasize social progressiveness, legalizing gay marriage, promoting human rights. She spent massive sums internally on economic stimulation programs, promoting growth, employment and inflation. Commodity prices and gradual devaluation of the peso helped her maintain dual surpluses, something few other nations can equal. Public debt levels continue to grow but shrank on a trade weighted basis. Her government continues to bleed easy wins in an export focused economy: grains, gold, oil and other raw materials. Rather than criticize her for the lack of real local industrial development or for vetoing a glacier-friendly mining protection laws, she is criticized for not sidling up to national and international capital. The government funded press, on the other hand, lauds her every move.

"Markets" calculate that Cristina has more of a central political focused than her late husband. On the international and local markets bonds and stocks were up for Nestor's death. Perhaps markets weer speculating on a hunch that Cristina will continue with friendly moves in her dealings with bond hold-outs as with the IMF accelerating a process that has already begun. It is also possible hat they are speculating on a collapse of the centre left leaving room for a divided right-wing to regroup in time for the 2011 elections.

Where will Argentina move in the coming presidential elections in 2011 now that the favourite candidate has died? Who can know know yet who might fill the vacant candidacy? All that one can hope is that the combative politics of Nestor Kirchner does not leave a squabbling group that might further divide the nation.

Argentina would be best to look toward the future rather than draw parallels with its sad past. Neither the political situation nor the president herself, a competent politician, find themselves in the perils of the nineteen seventies.

What happens next only the future will tell!

Posted by Tony Phillips at 04:25 AM | Comments (2)