Obscurity obstructs security

Those thronging to celebrate Peronist Loyalty Day last Thursday (with “combatiendo al capital” the punch line of the first verse of the Peronist March adulating the “first worker”) and the businesspeople attending the IDEA symposium in Mar del Plata might seem to inhabit two totally different universes but their two worlds have at least one thing in common – both are fraught with uncertainty as to the future. Which is not good news because, as Seneca aphorised two millennia ago, no wind is favourable for those who do not know where they are sailing.

Peronism is all about leadership and here the problem is not so much uncertainty as two conflicting certainties. The supremacy of former two-term president Cristina Fernández de Kirchner has been beyond dispute since 2007, whatever her nominal position, but no Justicialist carries anything like the clout of Buenos Aires Province Governor Axel Kicillof, who rules more than a third of the country and is the runaway frontrunner for the 2027 Peronist presidential nomination (while Fernández de Kirchner is on the brink of being banned from any candidacy if her corruption conviction is upheld next month).

Kicillof may have been the sole speaker at the main (although not the only) Peronist Loyalty Day ceremony last Thursday but this does not necessarily assure him any monopoly of command because the ex-president still has one power play left – her bid for the Partido Justicialista chair (in response to a “Draft Cristina” clamour which she herself organised reportedly), thus making November 17 rather than last Saturday’s October 17 the real D-Day. Kicillof has his own proxy candidate for the chair in the person of La Rioja Province Governor Ricardo Quintela, who launched his bid in mid-August and not in the last 10 days like Fernández de Kirchner. It remains to be seen whether the two governors will continue to defy the living incarnation of Kirchnerism but badly tarnished by the crass failure of an Alberto Fernández Presidency entirely of her making.

The alternative to that tussle might well be no contest with the ex-president taking over the party chair unopposed and then giving her blessing to Kicillof’s presidential nomination by acclamation in the belief that he is the next Alberto Fernández. Should Kicillof ride a backlash against the Javier Milei administration’s austerity to victory in 2027, the ruling party chair might prove a pebble in his shoe – somewhat akin to Raúl Alfonsín who clung to the Radical party chairmanship after his presidency and used it to steer a constant collision course, first negotiating the Olivos Pact to gift Carlos Menem a second Peronist presidency and then blocking the centre-right instincts of Alliance President Fernando de la Rúa (1999-2001), his old primary rival.

Meanwhile the IDEA symposium found the business world with perhaps less idea than ever as to what lies ahead. They have every reason to celebrate the fiscal surplus being maintained all year so that the public sector borrowing requirement no longer crowds them out of credit markets but the dollar has also been lagging behind inflation all year, making them wonder how they can remain competitive. The ‘cepo’ currency and capital controls are long past their shelf life without a date being given – a single floating exchange rate accommodating all the factors leading to the current myriad dollars is vital for any capital inflow. There is no longer even the certainty of the steep recession in the first half of the year – few now see things as getting worse but nobody is convinced that they are getting better either.

Businesspeople will always welcome a pro-market government on principle but sometimes a strict adherence to those principles is causing the most problems – even fiscal balance might not seem such a good idea if it entails high levels of taxation being maintained, thus placing local business at a disadvantage if a libertarian free trade creed is leading to protectionism being downscaled. Yet nor can businessmen only think of themselves – even a firmer growth will do little good if it does not reach everybody but is restricted to a handful of sectors whose productivity is in inverse proportion to being labour-intensive. Which should not contradict that improving productivity to become more efficient and competitive is perhaps the main challenge facing the economy.

In short, both Peronism and the business world are undergoing a transitional phase with springtime the prelude for summertime in its brightest sense or a long, hot summer strewn with power cuts. ​