ARGENTINA: Poverty, Unemployment Loom Over President’s Popularity

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Sep 2 2003 (IPS) - The popularity of Argentina’s president, Néstor Kirchner, has taken off in the three months since he took office, but it could come crashing down if his administration delays action on the urgent problems of high unemployment and widespread poverty.

Eduardo Curia, economist and government adviser, acknowledges that poverty and unemployment are the biggest challenges facing the Kirchner administration. "If we are to see results in those areas we will have to achieve an acceptable agreement with the International Monetary Fund (IMF)," he said.

Kirchner’s popularity has been buoyed by his stance against the impunity of the agents of Argentina’s 1976-1983 dictatorship. Several high-profile human rights cases, some of which involve the members of the regime’s junta, are now pending in the nation’s courts.

Jorge Ceballos, head of an association of unemployed workers, believes that Kirchner has differentiated himself from his predecessors, although he admits there has been little, if any, improvement in the country’s social ills.

"There are positive signs that the government is standing up to big corporations and challenging the neoliberal economic model," said Ceballos, whose movement represents a sector that has been hit hard by the country’s worst-ever economic and social crisis, and whose protests generally entail setting up roadblocks on streets and highways.

The economic collapse in December 2001, which triggered massive unrest and prompted president Fernando de la Rúa to resign that same month, drove up poverty to 54.7 percent in this erstwhile wealthy nation of 37 million people.

Unemployment also skyrocketed, affecting 21 percent of the economically active population. Today 15.6 percent are jobless, while another 19.8 percent work in the informal economy.

Kirchner was sworn in as president on May 25, reaching the highest office with just 22 percent of the vote. But his positive image surged to 90.9 percent and his performance has surpassed the expectations of 81.4 percent of poll respondents, according to the consulting firm Equis.

One of the things that has earned him high marks is his atypical presidential style. Kirchner will make an appearance when least expected, such as a recent visit to a dilapidated nursing home.

And he will mix with the public, which makes his bodyguards nervous and has cost him two gashes on his forehead – from accidentally bumping into television cameras.

Optimism has grown with the perspective for socio-economic improvements, in the wake of Kirchner’s unexpected measures paving the way to reopen the trials of the dictatorship’s human rights violators.

He has also come on strong against corruption and, shortly after taking office, he overhauled the leadership of the Argentine security forces.

A recent survey conducted by the Ibope polling firm found that the optimism of respondents reached 20 on a scale of 0 to 100 points, a dramatic improvement over the minus three and minus 16 points registered in similar surveys in 2001 and 2002, respectively.

Also contributing to the positive feeling is the fact that political, labour and social leaders – sharply critical of previous administrations – openly praise Kirchner for his direct approach to tackling problems, at least in his first three months in office.

Among these unexpected supporters are Hebe de Bonafini, president of the human rights group Mothers of the Plaza de Mayo, and Víctor de Genaro, secretary-general of the CTA workers union, the most rebellious of Argentina’s two big labour organisations.

Bonafini has underscored the president’s efforts in favour of justice, and against the impunity of those who committed human rights violations during the dictatorship.

De Genaro, meanwhile, applauds the fact that the country finally has a president who is interested in hearing the CTA’s proposals for making the Argentine economy grow through more equitable distribution of income.

Kirchner won broad support by showing that his administration would be open and efficient, economically independent of big business and of the multilateral credit institutions like the IMF, decisive in tackling corruption and willing to bring human rights violators to justice.

But the government’s social and economic plans show no sign of producing results in the short term.

The Equis poll found that 67.3 percent of respondents say they are unaware of measures aimed at reducing unemployment, and 78.3 percent say they are still waiting for word of a poverty-fighting plan.

Curia, the economist, says the agreement that the Kirchner administration is negotiating with the IMF will be crucial for escaping the current phase of economic deceleration.

The discussion with the IMF involves how Argentina will handle the upcoming interest payment deadlines and whether the country is in a position to refinance its debt, as well as the percentage of fiscal surplus it is willing to aim for.

The government has said repeatedly that it will not use its currency reserves to make the payments that come due Sep. 9, and is calling for a renegotiation of the payment schedule.

Furthermore, while the IMF wants Argentina to commit to achieving a fiscal surplus equal to four percent of the gross domestic product, the Kirchner administration says it will aim for three percent.

"If Argentina attains a credible accord in the short term, we could see an interesting level of growth, and ultimately we could aspire to single-digit unemployment," predicted Curia.

But for now, he admitted, Kirchner "is working in other spheres to maintain his popularity."

Luis Szklar is a small businessman who voted for Kirchner and says he is satisfied with the administration’s human rights policy, but that he hopes for a genuine reactivation of the Argentine economy.

"We have to be patient, and go about solving the main problems, while also implementing active policies for small and medium companies, because they are the driving force behind employment," Szklar said in a conversation with IPS.

The government’s economic projections, corroborated by private consulting firms, predict growth of around six percent his year, which is far from compensating for the 20-point decline accumulated during the past four years of recession.

Some economists consider this six-percent growth as a normal "bounce" after a sharp drop like that suffered by Argentina.

This is the opinion of Carlos Melconián, who was in the running for minister of economy if former president Carlos Menem (1989-1999) had won the last presidential elections.

Melconián says the economic turnaround should be maximised for attaining an agreement with the IMF, compensating the banks for their losses incurred during the worst of the crisis, and hiking public utility rates – and thus re-establish a climate that would attract new investment in order to kick-start the economy.

But Szklar believes that investment, if it arrives, would not lead to the sort of reactivation and growth that small business owners are waiting for.

It will be "the same business deals," the kind that only enrich the big corporations, the banks and the public services that were privatised in the 1990s, he says.

Sociologist Atilio Borón, professor at the University of Buenos Aires, said in comments to IPS, "If the president wants to consolidate the popularity he has now, he should ignore the recommendations of the IMF and draw up a strategy for growth that entails better distribution of income."

"There have been steps in that direction, which indicates Kirchner is changing routes, away from the neoliberal focus that economic policy has had in recent years. The pace of this change could be slower or faster, but the important thing is the direction of the change, and to pursue that path," said Borón.