The Narco News Bulletin

Argentina: The Specter of Menem

A South American Union At Stake in April Elections

By Reed Lindsay
School of Authentic Journalism Scholarship Recipient

January 20, 2003
This report appears on the internet at http://www.narconews.com/Issue27/article591.html

The summit this week between Argentine President Eduardo Duhalde and his Brazilian counterpart, Luiz Inacio "Lula" da Silva, has bolstered hopes that an "Axis of Good" is taking shape in South America. The two leaders agreed to coordinate social policies and launch a combined effort to fight poverty and hunger. They also promised to lead the further integration of South American commerce, and to form a unified front in trade negotiations with the United States, Europe and the rest of the world.

Perhaps most importantly, Duhalde and Lula vowed to revive Mercosur - the customs union formed in 1991 by Argentina, Brazil, Paraguay and Uruguay endowing it with political power and an institutional permanence along the lines of the European Union. They went so far as to agree to study the possibility of establishing a Mercosur parliament and adopting a common currency, an unthinkable prospect less than two years ago.

"Sooner or later, Mercosur will expand to other countries in the continent, it will have a common currency and a common Parliament," Duhalde told reporters.

But with Duhalde's days as president numbered and Argentina's political future uncertain, the accord between the two countries is both promising and precarious. Plans of an alliance between the two largest economies in South America could hinge on who wins Argentina's presidential election next April 27.

As in the rest of South America, people in Argentina are questioning the free market policies that have reigned during the last decade and have resulted in continuing corruption, deepening poverty and rising unemployment. Fed up with mafia-style party politics, the steady deterioration of social conditions and an economic system that has padded the pockets of the rich as it has driven the middle and working classes into poverty, Argentines are read for a change.

The political winds suggest they will choose a candidate who will break with more than a decade of U.S.-promoted free market policies. Indeed, three of the top four presidential candidates have promised stronger state intervention and a more vigorous commitment to Mercosur. But one man stands in the way: Carlos Menem.

The former president's policies, backed by the International Monetary Fund (IMF) - including the Argentine peso's one-to-one peg with the dollar, which was considered the hallmark of his administration's economic program - are blamed by many with driving the nation into financial ruin. But Menem left in the nick of time - in 1999, two years before a deepening recession led to a banking freeze, debt default and currency devaluation, which shattered the peso's parity with the dollar.

Thus, he has been able to deflect criticism of the economic crash to his successor, while he takes credit for the years of economic growth and stability while he was president. Despite widespread dislike, and even hatred, of Menem, he continues to be competitive in polls. A victory by Menem, who has crossed paths with Lula more than once, would almost surely represent a setback to this budding partnership between Argentina and Brazil.

Even if Menem is defeated, hope for real change remains dim in Argentina. While new social movements and grass roots organizations hold promise, they have yet to meld into a political force powerful enough to unseat an entrenched and venal political elite and to reform a hierarchical and patronage-based political system. Meanwhile, most people here remain apathetic of the political system and distrustful of the presidential candidates, none of whom has been able to capture more than 15 percent in recent polls. There is little evidence that Argentines have any more faith in the democratic process than they did in October 2000, when 40 percent of the population abstained or handed in spoiled ballots in congressional elections, an unusually high figure in a country where voting is mandatory.

Crumbling of a One-Party State

When Lula and his Workers Party (PT, in its Portuguese initials) won Brazil's presidential election, many Argentines asked themselves, "Why don't we have a Lula?" What they should have been asking is, "Why don't we have a PT?" Argentina is not short on charismatic political personalities, but it lacks a political movement with the popular roots, the experience and the permanence of Lula's Brazilian Workers' Party.

What Argentina has is essentially a one-party state that has long dominated politics and co-opted all forms of social organization. Like the Institutional Revolutionary Party (PRI) in Mexico, the Partido Justicialista (PJ), whose affiliates are called Peronists after party founder and former President Juan Peron, has lost what popular roots it once had and has degenerated into an ideologically protean political patronage machine.

Peronist agendas span from center-left to the far right, and the lines that divide party factions are drawn not by ideas and proposals, but by political and personal allegiances. An all-pervading party apparatus ensures electoral dominance.

The party's grip on power appears to be slipping, however, in large part due to deep divisions engendered during Menem's 10 years of neoliberal rule - considered by many Peronists to be a betrayal of the party's traditional commitment to social welfare and government intervention in the economy - and sharpened during the recent years of economic crisis. In the early 1990s, a new union called the CTA formed in opposition to the privatizations and other free market policies implemented under Menem and in rejection of the corruption and authoritarianism pervading the pro-Peronist CGT, the nation's largest union. Since then, the CTA has quickly become a powerful and combative force outside the Peronist umbrella, recruiting workers and families, many of them unemployed, who were left out of the economic boom of the 1990s. In recent years, other new social organizations began forming in response to worsening economic conditions and increased social exclusion, exemplified by the piqueteros, unemployed workers who organize social assistance in their communities and block highways to pressure the government into giving them welfare plans and other subsidies.

Then, on December 19 and 20 of 2001, Argentina burst awake after nearly 20 years of democratic slumber. Suffering the worst economic crisis in their nation's history, Argentines took to the streets in spontaneous defiance of a state of siege (martial law), chasing then-President Fernando de la Rua out of office.

Thirty-three people died, many at the hands of the police.

Since then, social protest and community activism have exploded with a blazing intensity and in unprecedented ways. Families of piqueteros have stopped traffic on a daily basis, workers have seized control of factories, citizen groups have hounded politicians and self-convoked neighborhood assemblies have formed spontaneously on street corners. The cry "They all must go!" rung from heaving pot-banging marches called cacerolazos.

Argentines of all social classes denounced the old-boy politics of the traditional parties and called for sweeping reforms to clean up corruption and to make elected officials more accountable to their constituents. People also began openly questioning the legitimacy of the privatizations, the IMF's demands and the payment of the external debt, while demanding that the government be more responsive to social needs. After more than a decade of neoliberalism, the rigid, single-track thinking of the Washington Consensus began to crumble, and in its place new ideas and proposals are arising.

Lula 's victory in Brazil has further invigorated this nascent debate, providing an example of a nation that has opted for social justice over fiscal discipline and economic orthodoxy.

But little more than a year since De la Rua was toppled by a popular rebellion, much of the enthusiasm for sweeping political change has died down. The president is an old-school Peronist and the Congress remains unchanged. Alternative social movements and a new consciousness have not generated an electoral or political option such as Brazil's PT. The CTA has announced plans to launch a political movement, and Secretary General Victor De Gennaro has hinted at his desire to follow Lula's example by someday making a run for the presidency, but the CTA will not be presenting a candidate in the election next April.

In Buenos Aires, the neighborhood assemblies have lost much of their force after being co-opted by leftist political parties. Links between grass roots movements are coalescing, but many of these organizations are relatively young and are neither prepared nor disposed to enter the political arena. Federal Deputy Luis Zamora, a popular leftist and one of the few politicians who could walk freely in the streets amid last year's political upheaval without fear of being lynched, has refused to present his candidacy in the upcoming presidential election.

Staying loyal to the street mantra "They all must go!" Zamora has argued that replacing the president is useless as long as legislators and the justices of the Supreme Court remain the same.

April 27 Election Scenarios

Key to the Peronists' electoral success has been the party's ability to postpone internecine battles for power at election time and to close ranks behind their chosen candidate when time to face off against the opposition, which has almost always been the century-old, centrist Radical Party.

This year, for the first time, the Peronists appear unlikely to take a unified stance. Last Wednesday, Nestor Kirchner, Peronist governor of the
Patagonian province of Santa Cruz and a leader in recent polls, announced he would not compete in the PJ primaries. Fellow Peronist Adolfo Rodriguez Saa, former governor of the province of San Luis who served a week as president in December before resigning, has also hinted at skipping the primaries, meaning at least three Peronists could face off in the election, with Menem likely carrying the official PJ banner. This fracturing of the Peronist party means a wide-open race, which until now has been dominated by four candidates: Kirchner, Rodriguez Saa, Menem and Elisa Carrio, the most potent force outside the Peronist party.

With no single candidate reaping more than 10 to 15 percent in the polls, about the only certainty one can venture about the coming presidential election is that there will be a second round. If no candidate wins more than 45 percent of the vote or beats the closest competitor by more than 10 percent, the top two vote getters will face off in a second round.

Except for Menem, the other top three candidates have promised to put an end to the neoliberal economic polices of the 1990s and to strengthen Mercosur and the alliance with Brazil. But unlike Lula, none of them has the backing of a grass roots party like the PT and most Argentines are skeptical of their intentions and capacity to carry out needed reforms. Carrio's political movement is just forming and Kirchner and Rodriguez Saa come out of a party that is rife with corruption and which most Argentines hold responsible for bringing about the crisis.

The Candidates

Carrio is physically unmistakable: blond-haired, corpulent and a devout Catholic who wears a large cross around her neck. Known for her crusades against corruption, she was an early favorite to be the next president in the wake of last year's political upheaval, but has since slipped back with the rest of the Peronist pack in the polls. Along with De Gennaro and Buenos Aires Mayor Anibal Ibarra, Carrio is one of Lula's greatest supporters in Argentina - and for good reason. She has made strengthening Mercosur through more formidable and permanent institutions the focus of her foreign policy platform, a position she confirmed in a November interview with Buenos Aires daily Pagina 12:

"There are two clear projects. One of them is political, economic and social integration with Brazil, that is, a continental and Latin American integration with a distinct relation to the United States. The other is an automatic and carnal alliance with North America. This will be decisive and if the election become polarized between Menem and us, (the election) will clearly define (Argentina's) continental policy."

Carrio has also proposed renegotiating the external debt, forcing the renewal of Congress and the Supreme Court, creating corruption watchdogs within government institutions and repealing the amnesty laws granted to those responsible for thousands of disappearances during the 1976-1983 dictatorship. Her economic plan is based on a "shock" redistribution of wealth, including the extension of the current welfare program, a plan of financial incentives to sectors of the economy with potential for growth and an overhaul of the tax system that would reduce the regressive 21 percent sales tax and increase income taxes and levies on financial transactions.

One of Carrio's greatest weaknesses is her image of inexperience, a critique cultivated by her Peronist competitors. She and her Alternative for a Republic of Equals (ARI) political movement, founded only a year and a half ago, will also be running up against the massive Peronist party apparatus.

Worsening matters for Carrio, the nation's two socialist parties, once allies, have broken with the ARI and are presenting their own candidates.

Kirchner is the Peronist candidate who most closely resembles Carrio. After a slow start, Kirchner has risen to the top of the polls in recent months, riding high on an image of honesty and capacity to govern. Santa Cruz, a province with a small population and rich in natural resources, has one of the lowest unemployment rates in the nation.

But perhaps his biggest asset is the endorsement of Duhalde, who told Lula this week that Kirchner would be the next president. The public perception of Duhalde, who has vowed not to run for office, is highly negative, but his backing is tactically critical. As the former governor of the province of Buenos Aires, Duhalde counts on the support of the majority of the Peronist mayors of the conurbano, the massive sprawl of urban municipalities that border the city of Buenos Aires.

More than 9 million people live in the largely poor conurbano, three times the population of the capital, and nearly a quarter of Argentina's population. The Peronist party has long dominated this region through an extensive system of handouts and political patronage. In most neighborhoods, punteros, "point" men and women who answer directly to the municipal mayors, distribute government subsidies, marshal busloads of people to be transported to political rallies and convince people to vote the Peronist of choice. With Duhalde's blessing, the PJ's provincial council on Tuesday opted to back Kirchner. Ironically, Kirchner has criticized both Duhalde and the system of political patronage from which he stands to benefit with this backing. Some analysts have speculated that this presidential "bear hug" could end up crushing Kirchner by driving away his significant support among progressives.

Campaigning under the motto "A normal country is possible," Kirchner has blasted Menem and his neoliberal economic policies. For his part, Kirchner has proposed a "Neo-Keynesian" economic plan that would consist in heavy state spending on social welfare and public works in order to jumpstart the economy. As in Carrio's proposal, the increase in spending would be financed by a fiscal reform that would increase income taxes and reduce the sales tax. Like Carrio, Kirchner has also proposed unifying Mercosur to negotiate with other nations and trading blocs.

Famous for his teeth-gleaming smile, Rodriguez Saa has campaigned with a wildly populist discourse, a nebulous platform and an odd mélange of supporters. In December, he assumed the presidency after De la Rua's resignation, only to step down himself a week later when he lost the support of the Peronist hierarchy. His mixed retinue includes CGT union leader and beefy truck driver Hugo Moyano, running mate Melchor Posse, a Radical, and Aldo Rico, a rightwing former Army officer who headed a military uprising in 1987 and is leading polls in the race for governor in the province of Buenos Aires.

Calling for a "national and popular revolution," Rodriguez Saa rails against "the establishment" and has drawn the ire of Argentina's creditors by repeatedly calling into question the legitimacy of the external debt. During his short stint as president, he announced Argentina's default to a standing applause in Congress. Like Carrio, he has praised Lula and proposed strengthening regional political and economic ties before entering in negotiations with the United States for the Free Trade Agreement of the Americas (FTAA).

But he frequently contradicts himself and has offered few concrete proposals. Many analysts balk at trying to guess what his policies would be as president. In the mold of Peron, Rodriguez Saa has linked populist politics to authoritarian tendencies. Three judges in the province of San Luis have been removed for publicly denouncing the former governor for exerting an autocratic control on political power. "Rodriguez Saa doesn't have a platform," said Martin Granovsky, a political columnist at Buenos Aires daily Pagina 12. "Becoming president is his platform."

Finally, we arrive at the specter that is haunting Argentina: Carlos Menem.

"Carnal Relations" with the U.S.

He is perhaps the most hated man in Argentina - in a recent poll more than 75 percent of those asked said they "would never vote for him for president." Yet former president Carlos Menem, with his endearing smile and charismatic bearing, has maintained a diehard group of followers who have kept him near the top in most polls. His electoral strategy appears to consist in presenting himself as Argentina's savior, the only person who can possibly pull Argentina out of its current crisis. Part of this strategy involves blaming the economic meltdown entirely on De la Rua - Menem left at the end of the recession's first year, and he adamantly denies his policies led to the financial collapse - and discrediting his opponents.

The latest Menem billboard plastered throughout the streets of Buenos Aires shows unappealing photos of the other candidates and Duhalde, splashed with the rhetorical question: "And you still have doubts?" Crucial to the success of this strategy, say analysts, is chaos. The greater the political instability and social unrest, the more appealing Menem's savior image becomes. With the economy stabilized, the peso gaining strength (it gained some 10 percent on the dollar in the last month) and the government finally coming to a long-awaited short-term agreement with the IMF, fears of impending chaos have grown distant.

But in the last year of economic freefall, political dissolution and unremitting protests, few are counting on things to stay this way. And nobody is ruling out the possibility that the politically savvy Menem, whose alleged connects to an underworld of crime and political machinations are accepted as fact by many Argentines, will find a way to win. Last December, then-Security Undersecretary Carlos Vilas accused Menemistas of planning a looting spree on the anniversary of the December 19-20 protests. Vilas was promptly booted from office and the lootings, a crime foretold, never materialized.

Menem has proposed "mano duro" (literally tough hand) security policies, going so far as to suggest that the armed forces be utilized to fight crime.

His economic policy would entail deepening the neoliberal policies he implemented during his presidency and strengthening ties with the United States, at the center of which is his proposal to dollarize the economy. (Although this item has quietly disappeared from his campaign discourse since IMF second-in-command Anne Krueger shot down the idea last July.)

A Menem victory would likely render this week's agreement between Argentina and Brazil null. While Menem inaugurated Mercosur as president, he did not seek to endow it with political strength, instead preferring to limit it to an area of free trade. He has made no indication that he has changed his mind on this point, and his mutual enmity with Lula, who has called Menem corrupt, has not improved. Dollarizing the economy, of course, would scuttle plans to establish a common currency. Moreover, further "carnal relations" with the United States, a label inspired in the Menem administration's willingness to please Washington diplomatically - Argentina was the only nation in Latin America to participate in the 1991 U.S. War against Iraq - would appear to threaten the promise of forming a unified front with Brazil or Mercosur in negotiations with the rest of the world.

Rounding out the field, Ricardo Lopez Murphy, a former Radical who was minister of defense and economy under De la Rua, offers a similar agenda to that of Menem, minus the commitment to dollarize and the image of corruption. Lopez Murphy has proposed cracking down on crime with "more severe policies" and he has pleased the business community with his neoliberal proposals. Like Carrio, he faces the prospect of running up against three possible Peronist candidates without a substantial party apparatus backing him. Lopez Murphy, who will be competing for votes with Menem, has hovered around 7 percent in recent polls.

With the Radical Party held in contempt by the vast majority of the population after the disastrous presidency of De la Rua, a Radical who led the now-defunct Alianza coalition, its chances of winning are negligible. If the party were not debilitated enough, it is now enmeshed in a Florida-style primary election scandal from which an undisputed candidate has yet to appear.

While the election is up for grabs, polls indicate that people are overwhelming in favor of a change from the carnal relations and Washington-endorsed economic policies of the 1990s. Thus, a victory by Menem seems unlikely. But cynicism runs deep in a nation that is still mired in a crisis that is on a par with the Great Depression. Argentines are awaiting the April 27 election less with anticipation than with caution. If change is truly on the way, say many Argentines, they'll believe it when they see it.