The election of Mauricio Macri on November 22, 2015, to the presidency in Argentina by a slim 51% to 49% over Governor Daniel Scioli marks a sharp break with 12 years of progressive government and the reconstruction of the state after the neoliberal period of the 1990s. It is a step back and is deeply troubling to those who believe that an active government is an essential institution for problem solving and the protection of the public interest.
Despite the global financial crisis of 2008–2010, many Latin American economies grew at unprecedented rates during the past 12 years and significantly reduced inequality and poverty in these countries, strengthened human rights across the region, and demonstrated that Latin America did not have to be the “backyard” of the United States, but instead could be a site of policy innovation and government commitment to social justice. This was particularly important because, as noted by NYU historian Greg Grandin, the legacy of the Cold War in Latin America was a definition of democracy that did not include social justice but was focused on protecting Latin Americans against repressive governments.
The 1990s period had been dominated by what is known as the “Washington Consensus,” a set of neoliberal policies that opened up national economies to free trade, adopted fiscal austerity policies to balance budgets, left workers without protection from their employers, privatized many public services and national assets, and significantly increased national inequality in many countries. Most importantly, the Washington Consensus policies weakened the role of Latin American states, leading the late former president Néstor Kirchner to remark in 2002 that one of the legacies of the Washington Consensus was “an absent state.”
From 2002 to 2005, some 250 million Latin American voters rejected these policies in what Chilean political scientist Patricio Navia termed the “democratic fiesta” — the election of progressive governments in 10 of 13 Latin American countries. Those governments adopted many new economic and social policies and were able to reduce poverty and inequality, rebuild the state, and demonstrate that effective policies could be developed within Latin America and not in Washington. Argentina was a leader in demonstrating that progressive economic and social policies were feasible, as the country dramatically expanded its cash transfers to more than 95% of its elderly population and to 100% of its children. Its subsidies to employment helped to maintain aggregate demand during the 2008–2010 global financial crisis.
Macri and his cabinet appointees represent a return to the policies of the 1990s. Indeed, many of his appointees played critical roles in the government of President Carlos Menem that led to the collapse of the Argentine economy in 2001. They were active advocates of fiscal contraction and liberalization of labor markets. Others come from private sector companies where they managed large corporations in Argentina. Argentine journalist Alfredo Zaiat has described the new government as a “CEO-cracy.” And outgoing President Cristina Fernandez de Kirchner has remarked that “a country is not a corporation.”
The incoming government has already spoken about weakening foreign exchange controls, repaying the “vulture funds” — the US hedge funds that represent a small percentage of Argentine bondholders — devaluating the peso, and cutting back on public spending. These adjustments threaten the greatly expanded social safety net for needy groups in Argentina. Although the new government says it will continue to prosecute the perpetrators of crimes against humanity during the Argentine dictatorship of 1976–1982, we know that these trials will go ahead only if there is strong governmental support.
Alternating leadership is at the heart of democracy, yet the likelihood of a Macri government strengthening democracy is doubtful. Representing the interests of the rich and of corporations, it is not likely to address the much-reduced but still-remaining segments of the population in poverty in Argentina. Furthermore, it is hard to imagine that a conservative government representing the rich will build on the Kirchner government’s success in reducing inequality. Nor can it be expected to widen social and political representation across the country. At best, the Macri government will be a wake-up call to those who voted for Macri, even though they had benefited in economic and social terms from the 12 years of the Kirchner government. They will learn that “change” is not necessarily good. Indeed, it can also go backward.