After more than 10 years of Kirchner rule, Argentinians signaled their desire for a president able to lead the country towards a stable economic future and the restoration of an international presence. From his different roles as football club manager, mayor and now head of state, Mauricio Macri, the surprise winner of Argentina's presidential election, knows perfectly well that in order to create change, you first need to build consensus.
The people of Argentina signaled their desire for a president able to lead the country towards a stable economic future, greater trust in the state, and the restoration of an international presence. Mauricio Macri, the surprise winner of last November’s election, gaining 51.4% of the vote over the ruling-party candidate, Daniel Scioli, has inherited a legacy that demands sacrifices from Argentinians, but whose policies hope to place Argentina back on the world stage, as a strong seat of investment and growth.
Argentina puts its faith in Mauricio Macri to bring about political and economic restoration
Since the $100 billion sovereign debt default of 2001, Argentina has been locked out of the global capital markets, leading to an overvalued peso and the second-highest level of inflation in Latin America. The hegemony of the Kirchner tenure had left many of Argentina’s 40 million people dissatisfied with the levels of crime and corruption, as well as the critical state of the economy. Mr Macri represents a move towards more neoliberalist, smaller-state politics, however the process of this move will require understanding and patience from the people of his country. As leader of the Cambiemos alliance, the name reflects his objective: ‘Let’s Change.’
Political office is a personal project for the new Argentine president. A member of one of the richest families in Argentina, son of Francisco Macri, an Italian-born industrial tycoon, Mauricio Macri has first-hand experience of the corruption that has been rife in his country. He himself was kidnapped in 1991 by corrupt police officers and released several weeks later thanks to a multi-million peso ransom paid by his father. It is to this life-changing event that Macri attributes both his decision to enter politics and why the battle against the social epidemic of political corruption is at the heart of his agenda.
His political journey has not been conventional, first serving as president of one of the country’s most popular football clubs, Boca Juniors, for 12 years, and overseeing one of the most successful periods in its history. But it is such experience of directing a club of more populist-based supporters that reflects his broad appeal and political understanding; a positive indication for his current role in government, where he needs to gain cross-party support in order to implement his political and economic policies.
Consensus and co-operation on the table
Between 2007 and his election as president, Macri has served as mayor of Buenos Aires, during which his tenure was marked by improvements to infrastructure (particularly transport), development of poor neighborhoods and encouraging economic and social innovation with a market-friendly reputation.
In a decade he built a political party from the ground up, signaling doggedness, determination and good management, all of which are being drawn upon during his time as president. The Republican Proposal party (PRO), which he founded in 2005, was initially more right-wing, but moved towards the center over time. To many this is a sign of the openness to inclusivity important for his current role in government.
As a surprise victor following the second round of elections, Mr. Macri did not command a working majority in Congress and is dependent on cross-party collaboration in order to achieve his aims of social and economic change. And although he went head-to-head with ruling party candidate, Daniel Scioli, in the run up to the election, Macri’s first day in office was spent meeting with his former presidential opponent and others with a view to gaining the support of Congress in order to implement his policies.
Change on the horizon
For years the Kirchners refused to pay the so-called ‘vulture’ hedge funds, led by Paul Singer’s NML Capital, $1.5 billion as a result of its $95 billion default in 2001. Argentina will only be able to receive foreign investment once this is repaid, which is what Macri has indicated he will do. The first task on his agenda? To remove capital controls and devaluation and bring about unification of a single exchange rate.
It is the consequences of these policies that the Argentinians may have to endure until the benefits are reaped, which have led some to call his policies ‘shock therapy.’ However, in placing their trust in Mr. Macri, supporters have also indicated that they are willing to withstand short-term hardships for long-term gains. It is thus hoped that Macri’s market friendliness would be a boost not only to the people of Argentina, but to foreign investment, as well, bringing the economy out of the mess that he attributes chiefly to the Kirchnerists’ economic mismanagement.
Ushering in an age of economic, social, and international opportunity, Macri has promised to act on behalf of the young and the elderly, and to place an emphasis on infrastructure development. With regard to foreign affairs, the former Buenos Aires mayor has again demonstrated boldness, pledging to expel Venezuela from Mercosur (Common Market of the South) as a result of the imprisonment of Leopoldo Lopez and other political prisoners, as well as promising closer links with Europe and the United States.
The world is watching
Having chosen a solid team of technocrats with experience in business and finance to surround him, Macri is setting to work. He already floated the Argentinian peso, which fell by as much as 30% against the dollar. The results of this bold move, which reflects Macri’s resolve to take the country in a new economic direction, may not immediately manifest themselves, but can been seen as indications for future growth and investment potential; the long-term gains that can benefit Argentina as a whole.
Time will tell of the efficacy of Macri’s policies. However all economists agree that the government must act quickly. No doubt Argentinians are in for tough times ahead, but having put their faith in Macri, who has already built on the momentum garnered from his election, they are hoping for a brighter future thanks to social and fiscal reforms and its ensuing international investment. Marcelo Dupont, head of financial institutions at the ICBC in Buenos Aires, believes there will continue to be a plurality of successful business models, despite the financial system going through a period of consolidation and attrition in the mid-term.
With high hopes that this may be but one modest assessment, many believe that Macri’s presidency represents a new ground floor for investors to be the potential future beneficiaries of the country’s robust recovery. The leadership required for these initiatives is significant. As the world waits to see whether Macri’s Argentina can emerge to ride the crest of prosperity, perhaps those with a watchful eye can be assured that the captain at the helm of these endeavors has already met with challenge and danger, and is thus equipped to fulfill his visions in the face of adversity.
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