IRC Americas Program Feature:
Argentine President's First 100 Days Break From 30 Years of Business-As-Usual

Martha Farmelo and Alan Cibils | September 30, 2003

Argentine society registered surprise in response to President Néstor Kirchner's string of progressive measures over the first hundred days of his administration. Then, in late August, Kirchner did the unthinkable and announced to International Monetary Fund (IMF) debt negotiators that he was unwilling to sign an agreement containing conditions that had been stipulated in the agreement signed by his predecessor.

He unfortunately signed an agreement that, while better than past accords, contains stringent fiscal adjustment measures aimed exclusively at debt repayment.

Kirchner's main break with the past has been in the area of human rights and institutional change. Few had expected these bold moves. Kirchner took office with the slimmest voter mandate in Argentine history, following cancellation of second-round voting due to former President Carlos Menem's decision to withdraw. Furthermore, Kirchner's relative silence during the campaign, coupled with a cozy political alliance with his predecessor Eduardo Duhalde, led most Argentines to expect business-as-usual from the new president. When he retained Duhalde's Finance minister, Roberto Lavagna, predictions that social and economic policy would stay the course and buckle to IMF pressures seemed confirmed.

The first sign of a break with the politics of recent decades came in a strong speech Kirchner gave shortly after Menem's withdrawal. Shocking the business and financial establishment, he stated that Menem's withdrawal served business groups that had enjoyed "inadmissible privileges" during Menem's presidential years, and furthered "interests that co-opted the state … corrupted political leaders and ruined the lives of [Argentina's] citizens."

Kirchner's May 25 inauguration speech went even further in its critique of the neoliberal policies of his predecessors, explicitly citing the social and economic costs of IMF-sponsored structural adjustment and proposing renegotiation of the privatized utility contracts. He also spoke of the need for an efficient and active state to "introduce equality where the market excludes and abandons." Matching deeds to words, on his second day in office Kirchner flew to the province of Entre Ríos to resolve a teacher's strike and re-opened public school classrooms there for the first time in 2003.

Taking on the Supreme Court

During his first week in office, Kirchner also set in motion measures to strengthen the justice system and end government-sponsored impunity for the perpetrators of crimes during Argentina's dark years of military dictatorship.

First, Kirchner replaced the top leadership of the armed forces and federal police, many of whom had horrific track records as human rights abusers. Then, in a move that enhanced rule of law, on June 5, he declared on national television that he would not succumb to blackmail by Julio Nazareno, the chief justice of the Supreme Court and an icon of Menem-era corruption. He also urged Congress to accelerate impeachment proceedings against all Supreme Court justices initiated by Congress weeks earlier. According to media reports, Nazareno had threatened Kirchner that if he didn't halt the proceedings, the court would issue rulings to cause political and financial chaos, such as reverting bank deposits to dollars after a 2002 peso conversion. Just three weeks after Kirchner's announcement, and following 13 years on the court, Nazareno resigned to avoid an inevitable impeachment trial.

Kirchner then called upon civil society organizations to help draft a decree to democratize the previously closed-door selection of Supreme Court justices. Using a white paper written by six Argentine nongovernmental organizations (NGOs) as his guide, he established a process that includes widely published announcements of nominees' qualifications and mechanisms for organizations and individuals to opine about candidates. Kirchner has since announced similar mechanisms for greater transparency and citizen participation in the selection of all federal judges.

For several decades, Supreme Court justices have had dubious or outright inadequate legal qualifications, and they have exercised political loyalties that made them unsuitable for their posts. In a dramatic break with this tradition, Kirchner nominated criminal law expert and former federal appeals court judge Raúl Zaffaroni to replace Nazareno. Zaffaroni is considered eminently qualified and politically independent, and in fact criticized Kirchner during his tenure as governor of Santa Cruz.

Justice for the Crimes of the Dictatorship

Another item high on the Kirchner agenda after taking office was to redress impunity for human rights violations committed under Argentina's grisly dictatorship during the period of 1976 to 1983. The president met with human rights organizations including the Mothers and Grandmothers of Plaza de Mayo and declared his support for their search for justice in the torture and disappearance of 30,000 people during the dictatorship.

For years, Argentine presidents refused to comply with extradition requests for military officers implicated in these crimes. On July 25, Argentina received an extradition request from Spanish Judge Baltazar Garzón for 46 former and present military officers for the disappearance of Spanish citizens. Garzón gained renown in international human rights circles for a similar case against former Chilean dictator Augusto Pinochet that led to his prolonged arrest in England in 1998 and 1999.

On July 26, Kirchner signed a decree to reverse an executive order barring the extradition of military officers to foreign countries whose citizens had been killed under the dictatorship. The decree allows Argentine courts to decide extraditions on a case-by-case basis. Thirty-nine military officers and one civilian were arrested and held until Spanish Prime Minister José María Aznar refused to act on Garzón's request. The detainees included retired Gen. Antonio Bussi, who is accused of the disappearance of 800 persons in the mid 1970s. Bussi recently won the mayoral election of the city of San Miguel de Tucumán by 17 votes, defeating two candidates whose parents were disappeared during the dictatorship.

Subsequently, Kirchner urged the Congress to nullify the so-called "impunity laws." These include the 1986 Punto Final or "Full Stop" law, which set a 60-day deadline to file complaints for crimes committed during what was termed the "war against subversion," and the 1987 Due Obedience law that allowed hundreds of lower-ranking personnel to avoid prosecution under the claim that they were following orders. In a somewhat symbolic measure, Congress complied with Kirchner's wish on Aug. 20. Victims' families and human rights advocates celebrated in the streets.

"We have always maintained that the nullification of these laws has to come from the justice system," said Victor Abramovich, director of the leading human rights organization, Centro de Estudios Legales y Sociales, shortly after the measure passed. But he added that the congressional nullification sends a strong political message to the judiciary, since now both the legislative and the executive branches have weighed in against the laws. The Supreme Court is scheduled to rule on their constitutionality in November. According to the conservative daily La Nación, more than 2,400 officers could go to trial if the laws are nullified.

Meanwhile, the president has continued his crusade to finally bring to justice the dictatorship's human rights violators. On Aug. 12, he signed into law Argentina's adherence to the International Convention on the Non-Applicability of the Statutory Limitations to War Crimes and Crimes Against Humanity, removing the defense of statutory limitations for war crimes and putting further pressure on the Supreme Court. In another dramatic move toward truth and justice, at Kirchner's behest, the national intelligence agency agreed to end years of hermetic secrecy by opening its files on the July 1994 car-bomb that destroyed the AMIA (Asociación Mutual Israelita Argentina), Buenos Aires' Jewish Community Center, leaving 86 dead and 300 injured.

Standing Up To The IMF?

On Sept. 20, the IMF formally announced the signing of an agreement with Argentina. While the agreement has been heralded as an Argentine victory over the IMF, it contains conditions that are, once again, aimed at Argentina's payment of its international debt at the expense of desperately needed economic recovery. The good news is that Kirchner refused to accept controversial measures stipulated in the January 2003 IMF accord: He refused to veto a law postponing mortgage foreclosures and he did not back steps to privatize public banks. In fact, Kirchner has made strengthening the public banks a policy objective.

Furthermore, he resisted consistent pressure from the IMF to increase public service rates charged by utilities that were privatized in the 1990s under Menem's administration, largely held today by European companies. Instead Kirchner declared that his administration will reject any rate increases until it has reviewed one-by-one its contracts with the foreign companies that have made a killing over the past decade while running the nation's public services.

The bad news is that the agreement demands that Argentina produce a primary budget surplus of 3% of GDP during 2004, which represents a 20% increase over 2003. According to the agreement, rather than help reactivate the economy, this surplus will be destined exclusively to debt service to the IMF, other multilateral creditors, and private creditors. Other macroeconomic targets stipulated in the agreement such as expansion of the application of the 21% value-added (sales) tax also have a strong recessionary bias. The agreement also limits Argentina to a very restrictive monetary policy and requires the government to request that Congress give it the power to unilaterally increase public utility rates, leading many to believe that rate hikes are imminent.

There had been some indication that the new president would take a stronger stance with the IMF. In his inaugural speech, Kirchner announced that Argentina would pay its foreign debt only when economic recovery had been established. At Kirchner's invitation, IMF Director Horst Kohler visited Argentina to negotiate directly with his administration. Kirchner told Kohler that the IMF is largely responsible for Argentina's current economic debacle. The IMF has yet to acknowledge any policy mistakes in Argentina, but this is the first time in decades that an Argentine president has called the IMF on its obvious and repeated failures.

Analysts had hoped that Kirchner would finally move toward designing and implementing a badly needed comprehensive plan for economic reactivation and development. Unfortunately, the new agreement makes that impossible, since the funds that will be generated are destined to debt payment, not reactivation.

Furthermore, although some important economic indices have been improving since the crash, others continue to be worrisome. Distribution of income is worse than in 2001: The richest 10% of Argentines receive 37% of the wealth, while the poorest 10% receive a mere 1.5%. Poverty stands at 54% of the population, indigence at almost a third, and unemployment at 20%. Meanwhile measures such as the June 10 announcement of increases in minimum salaries and pensions and the Aug. 21 pledge to build 700 schools that will create 25,000 jobs are both steps in the right direction, but they do not constitute a coherent economic program.

Supporters and Detractors: Kirchner's Prospects for the Future

Despite their concern about the country's pressing economic issues, many Argentines are decidedly more optimistic about politics since Kirchner took office. Kirchner's approval ratings have held at roughly 70%. Argentines talk about Kirchner having restored their dignity, and it seems they are expanding their perception of possible changes in politics and public administration.

But Kirchner has his detractors as well, within the financial establishment and the political right. His Vice President Daniel Scioli, a conservative Peronist with ties to Menem, voiced their concerns when he publicly contradicted the president on numerous key issues. Playing on the campaign slogan of "a real country," he quipped, "In a real country, laws are not annulled," to which presidential spokesman Miguel Nuñez responded, "In a real country, there is not impunity. There is justice and there is truth." Scioli also contradicted the president on utility rate increases and the prospects for a U.S.-sponsored hemispheric free trade agreement.

The political right and the conservative media are going all out against Kirchner for many of his positions. In response to Kirchner's speech at the time Menem withdrew from the presidential race, La Nación announced that the president wouldn't last more than a year, prompting strong reactions from public figures and the media--from the center to the left. For the time being they have held off, but they could very well declare war on Kirchner and his presidency at any time.

On the other hand, some of the most important leaders of the political opposition support him, including congresswoman and former presidential candidate Elisa Carrió of the Argentinos para Una República de Iguales (ARI) party. On Aug. 24, she told Pagina/12, "We are going to be at the side of this presidential authority. This president has to make it past September. He has the agreement with the IMF pending … . We're not going to hurry him. We're asking for serenity, and not for us, for him and for the country." Still, Carrió has expressed concern that he has taken on "too many mafias" at one time. Indeed, some Argentines are frightened by the speed of the changes, so their optimism is tempered by concern about potential repercussions from the business establishment and the political right.

Important elements of the popular movement have given him public support, or at least view his administration favorably. Human rights groups have expressed some surprise and general approval of his measures on that front.

Brukman is one of the worker-seized and -run factories known here as fábricas recuperadas. According to Página/12, Brukman's workers canceled plans to camp out in protest in front of the executive offices after the Kirchner administration agreed to consider their request for support in their efforts to continue working at the factory.

The piqueteros are the organized unemployed who use roadblocks to protest for food, jobs, and workfare, and most have had consistently confrontational relationships with past governments. Several such groups support Kirchner, and in an unusual twist, new groups of pro-Kirchner, Peronist piqueteros have sprung up in the province of Buenos Aires. Kirchner has received piquetero families in the presidential offices, and La Nación published a photograph of him kissing their children when he signed an agreement providing 1,800,000 pesos for their microenterprise projects.

At times, it seems that the popular movement has become somewhat disengaged in the traditional Argentine style of letting the president act at will. This is probably due to the fact that Kirchner has taken such an active stand on many progressive issues, but it also raises questions about mechanisms for popular participation and for presidential accountability.

Internationally, Kirchner has established relationships with Brazilian President Luis Ignacio Lula da Silva and Venezuelan President Hugo Chávez. These links have led some progressives to hope for a development alternative to U.S. President George W. Bush's proposed Free Trade Area of the Americas (FTAA), which would integrate the economies of the Americas in a single, U.S.-driven free-trade agreement. Kirchner's administration has made a strong bid for strengthening Mercosur (the Southern Cone trading block consisting of Paraguay, Uruguay, Brazil, and Argentina) as a negotiating bloc for any broader trade agreements.

Indeed, many in Argentina believe that strengthening Mercosur is a better alternative than the FTAA. Both Lula and Kirchner have expressed their hopes that Mercosur would comprise a political alliance as well, modeled after the European Union. Ideally, Mercosur would be expanded to include other South American countries, and thus improve the region's bargaining power vis-à-vis the United States.

Kirchner's mid-July tour in Europe garnered support from several heads of state for his administration and his negotiations with the IMF. He also had a surprisingly friendly visit in Washington with Bush, who promised his support for an agreement with the IMF. Bush reportedly told Kirchner to negotiate hard with the IMF, down to "every last penny." Some progressives here objected to such a friendly encounter with no challenges to Bush's wars in Afghanistan and Iraq, or his devastating economic policies and other international forays.

Many Argentines opine that Kirchner needs to act with caution, since his detractors could easily attack his government by using the media or tactics such as manipulating the Argentine foreign currency market to destabilize the exchange rate and introduce financial instability. Still, most Argentines wish him success. He has brought un nuevo aire to politics--a breath of fresh air. In 100 days, the president has made significant changes in 30 years of Argentine business-as-usual.

Will Kirchner sustain this trend, and will he be able to make a similar dent in resolving Argentina's enormous economic and social problems? His next 100 days may tell.

(Alan Cibils <alancibils@yahoo.com> is an Argentine economist and researcher for the Washington, DC-based Center for Economic and Policy Research. Martha Farmelo <marthafarmelo@yahoo.com> is a writer and activist and currently a fellow of the Institute of Current World Affairs.)

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Published by the Americas Program at the Interhemispheric Resource Center (IRC). ©2003. All rights reserved.

Recommended citation:
Martha Farmelo and Alan Cibils, "Argentine President's First 100 Days Break From 30 Years of Business-As-Usual," Americas Program (Silver City, NM: Interhemispheric Resource Center, September 30, 2003).

Web location:
http://www.americaspolicy.org/articles/2003/0309kirchner.html

Production information:
Writers: Martha Farmelo and Alan Cibils
Editor: Talli Nauman, IRC
Layout: Tonya Cannariato, IRC