Argentina elected pro-business candidate Mauricio Macri in a presidential election Sunday. Photo by Marcos Brindicci/Reuters
In a historic runoff election Sunday, Argentina elected Buenos Aires’ pro-business mayor Mauricio Macri over Daniel Scioli, a member of President Cristina Fernandez de Kirchner’s Victory Front party.
Macri, who will assume office Dec. 10, has the chance to set Argentina on the path to economic recovery after more than a decade of stalled domestic production and falling foreign investment under Fernandez.
Fernandez led Argentina with controversial social welfare and isolationist policies; her strict currency and trade controls drove foreign investment from the grains-exporting giant and have continued to stifle domestic production.
Fernandez’s party is grounded in Argentina’s broader Peronist movement — a political and cultural institution founded on the principles of equality, morality and the popular good, which inspired a young Pope Francis. But several incidents rocked the party’s image, including recent accusations that the party committed election fraud and the mysterious death of a prosecutor in February after he accused Fernandez of covering up a deal to protect Iranian officials against allegations that they bombed a Argentine-Jewish community in 1994.
Fernandez’s nationalist policies strained the country’s diplomatic and economic relationship with U.S. officials and business leaders, especially her refusal to repay more than $1.33 billion in defaulted bonds, for which U.S. and additional foreign investors have sued the country.
Macri stated earlier in his campaign that Argentina “must pay” what it owes to U.S. investors. But he has recently backed off those statements, citing how Fernandez and her late husband’s heavy populist spending along with an unregulated Central Bank have inflicted unknown damage on the country’s hard currency reserves. Argentina already has one of the world’s highest inflation rates.
Many investors in Argentina and internationally are hopeful Macri’s election will usher in an era of pro-business economics and shift away from Fernandez’s populist policies.
In his first press conference after the election, Macri addressed Argentina’s economy. He said he planned to restructure income and export taxes while implementing a “unique exchange rate” when the country’s economy “returns to a growth path,” the Buenos Aires Herald reported Monday.
Macri acknowledged it could be a long road to recovery, and devaluation of the Argentine peso could get worse before it gets better. “There is a problem with reserves no matter what the government says,” Macri said in the press conference.