By Andrés Gaudin
The people of Argentina voted for change for the next four years. On December 10, the country will bid farewell to a progressive government to instead be run by a right-wing party. In the first runoff of local history, held on Nov. 22, the Let’s Change Alliance, led by entrepreneur and former head of the government of the City of Buenos Aires, Mauricio Macri, 56, defeated Daniel Scioli, of the ruling Front for Victory (FPV) party, by a meager 2.68 percent of votes. Macri will take office without a majority in either of the two branches of Congress, which will force him to relax, at least temporarily, the hard-line neoliberal agenda that he proposed.
However, the changes will be seen from day one. In fact, they can already be observed. At the announcement of the end to the social policies of the last 12 years of the three FPV administrations — one led by Néstor Kirchner (2003-2007) and two by Cristina Fernández de Kirchner (2007-2015) —, the prices of basic commodities increased. Producers of goods and food also anticipated the new government’s decision to eliminate state subsidies of public services and will have to study how this will affect their costs and the cost they pass on to consumers.
The new government, that according to its ideology will have a cabinet of ministers and other senior officials from the business sector, began to crumble just hours after the victory had been confirmed at the polls. The day after the second round, Ernesto Sanz, the other central figure of Let’s Change, after Macri, resigned from all positions in government and even political activity, leaving without a leader the Radical Civic Union (UCR), one of the two major parties of the alliance. Sanz’s mandate as Senator ends Dec. 10, and he was president of the more than one hundred-year-old party he abandoned. On that afternoon, the UCR legislators and senators also rejected an offer from Let’s Change to unify the legislative blocks.
Government of businessmen
At a press conference on Nov. 23, Macri set out the broad outlines of his administration. At the same time, it was known who will occupy the most important positions of cabinet ministers and the highest executive positions.
“This will be the government of the CEOs,” ridiculed opposition journalist Roberto Navarro, referring to the chief executive officers.
The Ministry of Finance will be run by Alfonso Prat-Gay, former CEO of JP Morgan Bank. The chief of staff will form a team with Mario Quintana, CEO of Pegasus investment Fund, and Gustavo Lopetegui, CEO of the airline LAN. The Minister of Production, Francisco Cabrera, has been CEO of Hewlett Packard, the pension fund company Maximum, the Roberts financial group, HSBC bank, and the newspaper La Nación. The Ministry of Energy will be occupied by Juan José Aranguren, CEO of Shell Oil, and Isela Costantini, CEO of General Motors in Argentina, Uruguay and Paraguay, will be in charge of the presidency of Aerolíneas Argentinas. The Minister of Foreign Affairs, Susana Malcorra, is chief of staff to the Secretary General of the United Nations and previously served as CEO of IBM and Telecom. The large business groups will also have their representatives in the cabinet.
Along with the economy, foreign policy will be the area with most novelty. Although Malcorra has not appeared in public, Macri took the opportunity to declare his major foreign policy plans, announcing two shocking declarations. First, there will be a total break with the policy of regional integration of the last 12 years. Second, Macri has not devoted a single sentence to what has been the linchpin of Argentina’s diplomacy since the country’s return to democracy in 1983: the sovereign claim over the Falkland Islands in the South Atlantic, occupied by Great Britain since 1833. Instead, he seemed pleased with a phone call from British Prime Minister David Cameron, “with whom we pledged to work together, without rancor.”
In the same vein, the new government will try to annul the Memorandum of Understanding with Iran, signed in 2013 with the aim of continuing the stalled legal inquiry into the terrorist attack of July 1994 against the Jewish entity Argentine Israeli Mutual Association (AMIA).
Rapprochement with Pacific Alliance
In his eagerness to be a leader in the continent, Macri’s first statement was to ask for Venezuela’s withdrawal from the Common Market of the South (MERCOSUR) by applying the “democratic clause”, an instrument signed by the member countries in 1998, which places sanctions to a member country when it breaks from “the democratic order.” The president-elect has not yet made any reference to the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean States (CELAC). Instead, he repeatedly said at the announcement that he seeks a rapprochement with the Pacific Alliance (AP) trade bloc which includes Chile, Colombia, Mexico and Peru, and Costa Rica and Panama as observer states.
“We intend to restore relations with Brazil, providing a new dynamic to MERCOSUR and seeking convergence with the AP to expand the destinations of our exports. We come with the aim of building good and predictable relations with our Latin American brothers and with the world at large,” Macri said. In two other moments he referred to the AP to point out that “Argentina needs to increase its exports [which have been] slowed by the overvalued currency and recession in Brazil.”
Macri surprised everyone when he said that the first thing he will do when he takes office is to review, and “if necessary, cancel”, the investment and integration agreements signed with China and Russia. Although the agreements with both countries were approved by both branches of the legislature, Macri said that he will “send them to Congress for discussion and approval.”
For outgoing Foreign Minister Héctor Timerman, the AP “is consistent with the old concept of the Washington Consensus and delights believers of neoliberalism and the continental right. There is a common theme in the countries that make up [the AP], which is that they are the same countries that recently signed the Trans Pacific Partnership (TPP) agreement, which integrates the countries of the Pacific Rim of the Americas and Asia, excluding China”.