Tough task for Argentina's 'Hillary'

First lady Cristina Fernández de Kirchner won Argentina's presidential election Sunday, but she will soon face rising inflation and looming energy shortages.

from the October 30, 2007 edition

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The most complex problem, however, is inflation. Not only are prices vexing some consumers, the official rate of 8 to 10 percent has been widely discredited by the opposition and independent economists.

For Osvaldo Giordano, an economist at the Argentinean Institute of Social Development in Buenos Aires, the incongruence between the official numbers and economists' estimates that place the figure between 15 and 20 percent is a clear sign that the Kirchner policies can't work in the long run. "It's a manifestation of their political inconstancy," he says.

Economists began to question official numbers by the National Statistics Institute after President Kirchner replaced civil servants this winter, which he says was to improve the efficacy of the system. Fernández, on the campaign trail, has supported the validity of the statistics. But doubts are rampant. "Their number is not believed by anybody," says Federico Thomsen, an economic analyst in Buenos Aires. "Not even many people in the government believe it; it's become a joke."

Inflation woes

Rising prices have led to consumer boycotts – most recently of tomatoes. The Kirchner administration has been able to keep unrest at bay by working with the private sector, pleading with supermarkets, for example, to temporarily cut prices, but many say these are only short-term solutions. "She will not be able to do that for four years," Mr. Thomsen says. "It's OK to contain things for two or three weeks before an election. This is becoming a growing concern for the population."

Many voters say their pocketbooks are taking a hit, and it is the poor – from whom the Kirchners draw most of their support – who are being hit hardest.

Cecilia Rodriguez, a retired seamstress in Misiones Province in northeastern Argentina, says prices have squeezed her budget, and she rarely thinks of eating out anymore. She says she saw in the Kirchners' the former days of Juan Perón, who came to power in 1946 and inspired the "shirtless ones."

"Then we all had jobs and could eat. I thought the Kirchners were the same," Ms. Rodriguez says. "There are people starving on the streets, and [the Kirchners] are flying all over the world."

But Diego Ramirez, a driver in the northeastern city of Puerto Iguazú, says that what matters is that people have jobs again. "He has done good things," he says. "So will she."

Some say this sense of expectation could work against Fernández. "She comes in at a very difficult moment," says Jorge Giacobbe, an independent analyst in Buenos Aires. When Kirchner took office the country was still shocked from the crisis. "People were silent and scared, and they listened to him. Now we are in a different situation," he says. "There is not the same fear or silence."

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