Change in Argentina, but it won't be easy
Argentina made an important right turn on Sunday. Mauricio Macri, the opposition candidate, won Sunday's election. He is not perfect, but he offers a more realistic option than the misguided populist policies of the incumbent party.
At the same time, argentinos longing for change will have to be patient, because Mr. Macri is inheriting a mess of huge proportions, as we read in Bloomberg:
Neither candidate has addressed the elephant in the room: the reforms needed to reduce inflation, fix a fiscal deficit of 7.2 percent of gross domestic product - the largest in over 30 years - and lure back investment dollars which have stayed away due to currency controls, a lack of regulatory predictability and a decade-long dispute with holdouts from the 2001 default.
Macri's victory is also a huge defeat for "the Kirchner way," the populist philosophy that guided Argentina for a decade. John Fund has a good analysis about this point:
Argentina’s election on Sunday represented the starkest choice the country has faced since the authoritarian era of Juan and Evita Peron began in the 1940s.
The seven-point victory of center-right candidate Mauricio Macri may herald a real shift towards more sensible economics and less anti-U.S. policies in Latin America.
Defeated Peronist candidate Daniel Scioli was a hand-picked defender of the interventionist economics of his party’s retiring President Christina Fernandez de Kirchner.
In a recent TV interview, Scioli summed up the differences between him and Macri simply: “I defend the role of the state and he defends the role of the market.” He accused Macri, a leading businessman and mayor of Buenos Aires, of representing policies of “savage capitalism” that would devastate the poor.
Argentina’s voters have often fallen for such rhetoric, but not this year.
The record of Kirchner and her Peronist party was a disaster and not easily ignored.
It won't be easy but Mr. Macri is a better option. He has a better chance of attracting the kind of foreign investment that the country needs to create jobs and help the struggling middle class.
Good luck to Mr. Macri.