Thursday, 25 June 2009

Gran Cuñado is Watching You!

The crazy series of events you have just seen unfolding before your very eyes was part of a spoof Argentinian gameshow called 'Gran Cuñado' which loosely translates as 'Big Brother-in-law'. Effectively, 19 comedians have all dressed up as exaggerated caricatures of candidates for the mid-term legislative election on the 28th June. In fact, the election was not due until October but was brought forward by President Cristina Fernández de Kirchner as something of a referendum on the Kirchner rule that has dominated Argentina for the past 6 years.

The show really lays into the Kirchners but this is only a reflection of widespread opinion. Polls suggest that the ruling couple will lose their majority in the lower house of Congress. Another thing that has not helped them is the emergence of a more cohesive opposition from their own Peronist movement. In particular, Colombian born businessman Francisco de Narváez is leading a high profile campaign in Buenos Aires against former president Néstor Kirchner. A failure to top the poll in an area which accounts for 40% of the electorate would certainly be seen as a humiliating defeat.

The reason for this change of fortune seems to be the rejection of Kirchner economic policy, yet at first glance this seems impossible to believe. During Mr. Kirchner's time as president between 2003-7, the Argentinian economy recovered swiftly from the collapse of 2001-2 mainly as a result of debt restructuring by Kirchner. What's more it seems that Argentina is making an early recovery from the current global recession with export prices improving.

Whilst Mrs. Kirchner was elected in a landslide in 2007, it was widely believed she would be less hardline than her husband. This has not been the case thus far though and attempts to raise taxes on agricultural exports were resoundingly rejected whilst Mrs. Kirchner seems to have gone to war with private business in general.

On the ground, unemployment is a growing concern amongst the Argentinian people with rates rising as high as 17% in some areas of Buenos Aires. In the same areas the poor rate is as high as 40%, figures not seen since 2002.

With Argentina being one of the economic powerhouses in South America, perhaps it is up to de Narváez to promote the restoration of capitalism. Although he cannot run in the next presidential election (being foreign born), his potential success later this month should send a message to the president that more business-friendly policies are what is needed to not only solve unemployment but also make Argentina a major global economic force on the other side of the recession.