Argentine President Alberto Fernández’s first 100 days concluded at a time of huge uncertainty—not only for Argentina, but the world. His honeymoon period finishes amid a coronavirus pandemic and the need to renegotiate the country’s external debt. How will Fernández handle it all? Special Advisor to AS/COA Juan Cruz Díaz explores the start of the presidency and clues for what comes next.
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AS/COA Online: Since Fernández took office on December 10, Argentina has seen a return to a Peronist government. Fernández inherited an economy in recession, inflation at about 55 percent, and rising poverty. He promised to alleviate poverty and bring the economy back up to its feet. Then came the coronavirus, which has been a definitive end to a presidential honeymoon period. Do you think his presidency so far has demonstrated he is ready to steer the ship through this crisis?
Juan Cruz Díaz: He has certainly taken office during challenging times, and now with the coronavirus pandemic, not in his wildest dreams would he have thought his first 100 days would be like this. The economic and social situation was quite complicated at the time he came in, and the focus of the last few months has been to get some kind of deal with the IMF and debt holders to negotiate the terms of the Argentine external debt. Most of his policies have been delayed until some kind of result on this happens.
Then, the coronavirus pandemic came, and it complicated the original plan for the president. I think he has been up to the challenge, if you ask me. If there’s anyone in the Peronist party who can understand how to manage and handle the government and the tools it gives to the president, it’s Alberto Fernández. He has risen up to the challenge of dealing with the debt. So far, of course, the terms are not really there, but the general view and moderation needed to handle this are present in his presidency.
I think he’s been right in some moves he’s taken in foreign policy, and in the past several days he has been strong when he has needed to be strong, sensitive when he needed to be sensitive, and has been reaching across the aisle for unity across all sectors—whether it be politically, the private sector, media, or unions.
We haven’t seen many concrete results so far, because of the debt issue and the coronavirus, but he has hinted at the direction he would take. He said he would prioritize disadvantaged groups, small- and medium-sized enterprises and try to offer some relief to the people most affected by the socioeconomic crisis. This might come, of course, at the expense of the fiscal situation. He’s been quite careful on that front so far as well, but everything has changed since the coronavirus.
AS/COA Online: A hurdle to Fernández’s nascent presidency was the pending IMF renegotiation that you’ve mentioned. Fernández's predecessor managed to get a $56 billion loan, but Argentina's debt is unsustainable to pay back this sum. What has been Fernández’s approach toward the IMF deal, given the self-set deadline of March 31 to renegotiate the deal?
Díaz: Again, the coronavirus changed everything, and this is linked to his foreign policy strategy as well. Most people, based on the last years of [President Cristina Fernández de Kirchner’s] government, believed that Fernández was going to isolate Argentina, and none of that happened. The president’s first international trip was Israel, and he met many world leaders including U.S. Vice President Mike Pence. He then embarked on a trip to Europe, and aside from the Pope, he met with Germany’s Angela Merkel, Spain’s Pedro Sánchez, France’s Emmanuel Macron, and Italy’s Giuseppe Conte.
He met with several world leaders in Europe and got their support for his IMF negotiations. And it’s notable that he did not go to Russia, Venezuela, and China. He was quite clear in what type of first move he made. The rumor is that actually the advice to go to Israel first came from Fernández de Kirchner, and that she was quite invested in that decision of not showing Argentina isolated from the world.
When Ambassador Jorge Argüello went to Washington and presented his credentials to President Donald Trump and met briefly with him at the Oval Office, Argüello said that Trump was going to support Argentina on that. Furthermore, the discussions between IMF Managing Director Kristalina Georgieva and Economy Minister Martín Guzmán seem to have been quite productive.
The problem right now is that the global situation has changed, and other countries are trying to get the support of the IMF in the middle of this crisis, so it is uncertain how Argentina will get priority in the discussions. Also of importance is the fact that Argentina announced a set of measures to alleviate the economic and social disaster the coronavirus will create, which put a lot of stress on the country’s fiscal policy, and certainly will affect the projections that the IMF was making. Additionally, the negotiations with the private bondholders are key, which are going to affect the prospects of the Argentine economy as well. We’ll see.
AS/COA Online: Many saw Fernández as a candidate offering a moderate type of Peronism to the Kirchner governments of Néstor Kirchner, whom Fernández served as cabinet chief, and Néstor's wife (CFK), who is Fernández's vice president now. A big question had also been how much power Fernández de Kirchner would have as vice president, given her popularity and political influence. What has been her role since the start of the term, and how different is Fernández’s party to hers?
Díaz: We have experienced in the last 75 years different reincarnations of the Peronist party and different types of Peronist governments. More recently, in the 1990s, we’ve seen a Peronist government that was more pro-business, prone to deregulation and privatization, and following what at that time was the mainstream situation of the Washington Consensus, striving for an open economy. Then, for example, in the last four years of CFK we saw quite a protectionist government, with a lot of elements that one can identify as more to the left (although I find it misleading to view Argentine politics via a left-right paradigm.)
Every time that we have a Peronist party in government, we try to figure out what type of government it will be, given that in the Peronist movement you could have quite a diverse set of ideological spectrums. But this time is different. In previous periods, we did not have a truly coalition government run by the Peronist movement like we have now, where we can identify at least three different groups within this current Peronist coalition.
There is the one led by CFK, being the most robust one. She is a popular politician, and she certainly is very powerful. Without her, it was impossible for the Peronist party to win, so that’s a very important, center-left faction of the party now, though, again, I don’t like to analyze Peronism and Argentine politics in “right” and “left” as I think that is misleading, but this is an important group. Then, you have the traditional Peronist party, where you can see governors, legislators, union leaders, a labor-based sector that is more pragmatic with more traditional elements. Last, you have the other sector led by Sergio Massa, who is the president of the Chamber of Deputies, who was also quite important in order to bring unity to the movement.
If there is anyone who can lead a diverse coalition like this, it’s Alberto Fernández, he has the experience to understand and balance these diverse groups. He is well suited to handle this coalition. Fernández has appointed people he personally trusts as key members of the cabinet, but you will also see ministers representing the other sectors of the coalition, and the same happens in Congress.
I am convinced that CFK has a very important role in this coalition. I believe it when Fernández says he speaks very often with her, as he certainly needs to have her as part of the decision-making process in order to be successful.
AS/COA Online: Honing in some more on foreign policy in the region, in Fernández’s first 100 days, he has had to establish relationships with right-leaning neighbors array of neighbors, including Brazil, Paraguay, and Uruguay. He also granted asylum to former Bolivian President Evo Morales in December as he fled his country during political turmoil. What has his foreign policy with regional neighbors looked like in this inaugural period of his presidency?
Díaz: There was a lot of speculation before he took office on what his foreign policy would look like. Remember, we had the Group of Puebla meeting here and Fernández was quite clear on his support to Evo Morales and former Brazilian President Luiz Inácio Lula da Silva and so on, and I think he truly believes that the ousting of Morales was an undemocratic interruption, that Lula da Silva was unfairly detained, and he certainly believes that former President Dilma Rousseff’s exit from power was not the most democratic thing in the world. Those are beliefs he has.
Having said that, he is a president and he needs to act like one, and that is what he has shown. Both the Minister of Foreign Affairs Felipe Solá, Massa, and now Ambassador to Brazil Daniel Scioli have been talking to the Brazilian government, even with President Jair Bolsonaro directly.
The private sector in both countries has been working together, and the industrial sector in Brazil was instrumental in helping to deescalate the tensions, so I think that while styles and ideologies are different, the commercial links are very important for both countries, so tensions will naturally deescalate.
And with other leaders, I think the relationship has been good. If you see the way that President Luis Lacalle Pou in Uruguay and Fernández have been communicating, it’s quite promising. The absence of Fernández in Lacalle Pou’s inauguration is because that was the day of the opening of legislative sessions in Argentina and the president had to be there, but other than that, the relationship is positive, as it is with President of Paraguay Mario Abdo Benítez, and even with Chile’s President Sebastián Piñera.
But, to be honest, I think the whole world order will be reconfigured after this coronavirus crisis, and it’s hard to say what’s going to happen. But I think Fernández has shown a level of pragmatism and intention to not isolate Argentina that is quite promising. Of course this will all depend on the success of the debt negotiations both with the IMF and private bondholders, and how the coronavirus pandemic crisis affects international affairs as a whole. But you know, those are the open questions we have yet to see answered.
This interview has been edited for length and clarity.