Cristina Fernandez's First 100 Days Marked by Turbulence
By Marifeli Pérez-Stable and Christian Gómez, Jr.
Latin America Advisor., April 1, 2008
Cristina Fernandez's First 100 Days Marked by Turbulence
WASHINGTON, DC—Cristina Fernandez de Kirchner recently celebrated her first 100 days as Argentina's president. While her approval ratings remain relatively high (between 47 and 65 percent), the initial period of her presidency has been turbulent.
On March 1, Fernandez announced a "bicentennial agreement" to reduce unemployment and poverty to 5 percent and 10 percent, respectively, by 2010, the 200th anniversary of Argentina's independence. The president emphasized the strength of the national economy, highlighting five straight years of positive economic growth (8.7 percent in 2007), as well as fiscal and trade surpluses. However, her key omission — inflation — remains a pressing concern.
Much of the controversy regarding the nation's inflation rate revolves around INDEC, the autonomous national statistics institute. Last year, INDEC's official inflation rate was 8.5 percent, although private analysts estimate that the actual rate was up to three times as high. In February, Fernandez approved pension and salary hikes of 15-24 percent for government retirees, truckers and teachers, undermining the credibility of INDEC's figures. Within Fernandez's cabinet, the inflation issue pits internal trade secretary Guillermo Moreno, a defender of INDEC's inflation index, against Economy Minister Martin Lousteau, who has rejected it.
Fernandez needs an undervalued peso to increase export revenues, since Argentina lacks access to international credit and has low levels of foreign investment. However, farmers — which produce 61 percent of exports — balked at a 10 percent increase in taxes on soy and sunflower exports by calling for a general strike. The four main farming unions united to block roads and halt the trade of food staples unless the taxes are repealed, which has already led to shortages of beef and eggs. While she initially refused to negotiate until the protests stop, Fernandez decided to go to the bargaining table after 16 days of strikes. The tariffs on agricultural exports represent a vital source of income that the government needs to finance social programs and public works.
Fernandez's relations with the United States got off to a shaky start. Following her inauguration, four men were charged in Miami with acting as illegal Venezuelan agents attempting to cover-up the source of $800,000 in cash seized in a Buenos Aires airport. Fernandez declared that allegations by US authorities that the "suitcase-gate" money was a contribution to her campaign from Venezuela were "garbage." On January 31, a meeting with US Ambassador Earl Wayne apparently mended relations. Then, in March, Argentina unequivocally condemned Colombia's strike against the FARC camp in Ecuador, in effect siding with Venezuela, which remains an ally. Fernandez saw Secretary of State Condoleezza Rice's decision to bypass Argentina on her March 13-14 trip to South America as a snub.
Fernandez's immediate priority is to negotiate an end to the agricultural protests. She should then approach the inflation issue directly, as continued price controls and manipulation of official figures will eventually become unsustainable. Only by enacting sound economic corrections would President Cristina Fernandez make the bicentennial a real celebration.
Marifeli Pérez-Stable is Vice President for Democratic Governance at the Inter-American Dialogue. Christian Gómez, Jr. is a Program Assistant at the Dialogue.