Western Hemisphere Intelligence Brief

Issue 230: November 18, 2015
Argentina at a Crossroads
Venezuela Careens towards Legislative Elections

 

Argentina

Argentina is preparing for its runoff presidential elections on November 22nd. … Center-right opposition candidate and mayor of Buenos Aires city Mauricio Macri has considerable momentum after finishing a surprisingly strong second behind the heavily favored ruling party candidate Daniel Scioli. … Scioli is the chosen successor of current president Cristina Kirchner, but has tried subtly to differentiate himself from his patron’s unorthodox economic policies, which many voters blame for the country’s weak growth, rising unemployment, and high inflation. … In a debate this past Sunday, Macri emphasized his campaign’s theme of change from kirchnerismo, while Scioli stressed his independence and commitment to the traditional Peronist base. … In response to an attack by Macri that his opponent represented more of the same deleterious policies of Kirchner, Scioli answered, “You insist on debating with a government that ends on December 10th.” … According to a post first-round election poll by Management & Fit, support for Macri has surged to 51.8%, while Scioli received 43.6%. … Another poll by the firm González and Valladares found similar results, with 51.6% of Argentinians supporting Macri and 40.3% backing Scioli. … Some initial reports suggested that Sergio Massa, a dissident Peronist who was eliminated from the presidential race after his third-place finish in the first round, would throw his support to Macri. … However, in a recent interview with the Financial Times, Massa indicated that he would not endorse either of the candidates. … “To attempt to influence the vote would be to mock [my supporters’] trust in me. I’m not planning to support either of the two candidates.” … The pro-market Macri has been targeted by a heavy wave of attack ads, one of which warned, “Imagine yourself without a home. Imagine yourself hungry. Imagine yourself if Macri wins.” … During Saturday’s debate Scioli attempted to paint Macri as a tool of the International Monetary Fund and big corporations, while calling his policies dangerous. … Macri’s campaign responded to the Scioli camp’s attacks calling them, “The last recourse of desperate people who do not want to lose power.”

 

  • The runoff election poses a stark choice for Argentina after a 13-year economic roller-coaster ride that began just after Argentina’s 2002 default, the largest sovereign default on record. Since then, the country’s economy has lurched from crisis to crisis under Presidents Nestor and Cristina Kirchner. Macri’s commitment to changing Argentina’s direction in favor of fiscally responsible policies that attract trade and investment has clearly gained the favor of Argentinians who are unhappy with the economic stagnation and uncertainty about the future that has become pervasive in Argentina. The private sector also has responded favorably to Macri’s momentum, increasing investment prospects and market performance in Argentina. However, the reliability of polling has been questioned due to the failure to accurately predict electoral results in the past, as was seen in last month’s first round election. Adding to this uncertainty ahead of the November 22th runoff is the large proportion of undecided voters, measured in some polls as high as 10 percent. Scioli runoff campaign strategy is to put space between him and Kirchner, while painting Macri as a dangerous choice. Macri has sought to tap into the desire for change without being perceived as radical. Indeed, many have observers have found very little difference in the economic programs espoused by the major campaigns. If Macri is able to pull off a victory, he will have to build a reform-minded coalition among various political sectors that share his vision of restoring growth, credibility, and regional influence to what could once again be an economic powerhouse in Latin America. Meanwhile, many observers outside of Argentina are watching this election to see what it may portend for other leftist governments in the region that are experiencing similar economic turbulence, particularly Venezuela, Brazil, and Ecuador. In Venezuela, the government of Hugo Chávez-successor Nicolás Maduro faces its most difficult challenge to date in legislative elections scheduled for December 6th; in Brazil, Dilma Rousseff is attempting to fend off impeachment efforts as her government labors through major political and economic crises; and in Ecuador, Rafael Correa is facing energized opposition as he tries to bring fiscal deficits under control.

 

Venezuela

As Venezuela heads into legislative elections scheduled for December 6th, pressures continue to mount on all sides for embattled President Nicolás Maduro. … Plunging oil revenues due to the collapse in international prices have gutted government spending, resulting in major economic, social, and political challenges. … In addition, last week, two nephews of Maduro’s wife, Cilia Flores, were arrested in Haiti and flown to the U.S. to face drug trafficking charges. … According to the New York Times, the two have been charged with conspiring to ship 800 kilograms of cocaine to the Unites States. … Their arrest confirms suspicions raised by a Wall Street Journal report last May revealing that U.S. law enforcement agencies are investigating high-ranking members of the Venezuelan government, including National Assembly president Diosdado Cabello and former Venezuelan Minister of the Interior, Tareck el Aissami, for their suspected roles in drug trafficking and money laundering. … On the political front, the Maduro government is facing increasing international scrutiny over its lack of commitment to free and fair elections. … Organization of American States Secretary General Luis Almagro sent an 19-page letter to Venezuela’s electoral council stating, “There are reasons to believe that the conditions in which people will vote … aren’t right now as transparent and just as the (electoral council) ought to guarantee.” … Almagro also noted “unfair electoral advantages in the governing party’s use of public resources in the campaign, access to the press, confusion in voting cards and the disqualification of some opposition political figures.” … At the same time, more than a 150 elected legislators from Brazil, Chile, Colombia, Costa Rica, Peru and the United States signed an open letter urging the Maduro government to allow international observation of the elections and to release all political prisoners. … In October, Brazil announced it would not participate in a Venezuela-friendly UNASUR electoral observation mission due to the limitations set by the government. … The ongoing turmoil has cast further doubt on the government’s legitimacy and popularity. … The polling firm Datanalisis estimates that the opposition maintains a 30% lead over the ruling party for the upcoming elections. … Furthermore, the government’s approval rating decreased from 50% in 2013 to 20% in September, according to a Venebarómetro poll. 

 

  • Given chavismo’s long-standing refusal to ascribe the opposition any legitimacy, it is difficult to imagine that the Maduro government will tolerate a national assembly controlled by anyone other than the ruling PSUV (Partido Socialista Unido de Venezuela). Although Maduro has claimed that he will accept the results of the election, he also has said his party will win “by whatever means possible,” adding that “[he] will not hand over the revolution,” but rather “proceed to govern with the people in a civic-military union.” The difference with this election is the growing regional concern with the rampant corruption as well as the undemocratic practices that the Maduro government employs to sustain itself in power. While no sitting head of government to date has spoken out about the situation in Venezuela, dozens of former presidents and regional commentators have spoken out in favor of free elections and respect for human rights. The trend line is such that other governments soon may have no other choice than to face the deteriorating situation there. The December elections may well be the tipping point. If the ruling party declares victory, many will suspect that the results were manipulated. If the ruling party is suspected of stealing the election or refuses to concede defeat peacefully, then the prospects for street protests and confrontation rise exponentially. If the government cancels the election rather than risk defeat that also will likely provoke unrest and instability in the country. Whatever the outcome, a passive U.S. and regional approach to the spiraling crisis in Venezuela will ironically contribute to the instability that regional governments hope to avoid.

 

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