Argentina's first couple are fighting for their political lives, writes TOM HENNIGANin São Paulo
WHEN CRISTINA Kirchner took over Argentina’s presidency from her husband Nestor in December 2007, many speculated that the first couple would dominate the country’s political scene for years to come.
The economy had grown at 8 per cent a year since 2003, boosted by soaring prices for its soybeans and freed of burdensome debt payments after Mr Kirchner forced international lenders into writing off 65 per cent of their loans to the country.
The opposition was in seemingly permanent disarray and the Kirchners had aggressively extended the presidency’s powers at the expense of congress, the courts and the economy’s private sector.
But just 18 months on, the first couple are fighting for their political lives, with mid-term elections on Sunday set to provide a clear measure of just how much support they have lost since Nestor handed over the presidential baton to his wife.
Their declining popularity so worried them that Mrs Kirchner brought forward the election from October, fearing that the deteriorating economy would result in an even worse result if she waited until the date she herself had originally set.
In a high-risk strategy, former president Nestor heads the list of his wife’s coalition in the province of Buenos Aires, home to 40 per cent of Argentine voters. Many of these live in the rustbelt of Greater Buenos Aires that has long been a reservoir of support for populists like Mr Kirchner.
The former president will get elected but is not sure to top the poll, a humiliating prospect for the politician who was once South America’s most popular leader.
Argentinian opinion polls show the couple could lose control of a docile congress where two-thirds of the seats in the lower house and a third of the senate are in dispute.
Mr Kirchner has turned the election into a referendum on the presidential couple’s populist policies since 2003, warning that a vote for the opposition risked a return to the dark days of the five-year recession which only ended in 2003. “Jobs will disappear, the poor will fall back and a frightening past will return,” he warned supporters.
But such warnings, resonant during the boom, now sound hollow as the economy slides into recession. The strategy of squeezing the agricultural sector to pay for populist policies elsewhere is unravelling, hit by a drop in international prices for soy and protests by farmers angry at what they label predatory taxes that they say are stifling investment in the country’s most productive sector.
International capital markets are not willing to make up the shortfall in revenue, still stung as they are by the 65 per cent loss they were forced to take on their previous loans and the Kirchners’ refusal to settle with bondholders who held out for better terms.
During the boom this did not matter and Mr Kirchner revelled in his role as the man who chased the locally reviled International Monetary Fund out of Argentina.
What loans he needed he received from ally Venezuela. But mismanagement of the Venezuelan oil industry by President Hugo Chávez has been exposed by the drop in the price of crude since the record high of $147 a barrel last year, and the country has had to reduce the largesse it lavished on regional allies such as the Kirchners.
The decision by Mrs Kirchner to seize the assets of the private pension system in the search for funds only provoked a flight of money from the country and the local peso is trading at seven-year lows against the dollar.
Such difficulties for the Kirchners have re-energised the previously fragmented opposition who hope to make their first significant national gains since 2003. More worryingly for the first couple, much of the opposition’s renewed strength is due to powerful groups within their Peronist movement coming out against them.
Francisco de Narváez, the Colombian-born businessman competing against Mr Kirchner in Buenos Aires province, is himself a Peronist who has forged an alliance with opposition right-wing parties. Also running against the Kirchners is the former governor of the province Felipe Solá, once a loyal Kirchner ally but now described by Mrs Kirchner’s justice minister as “the number one example of traitors in the world”.