On December 10th, Argentina inaugurated a new president. Recent elections brought back former president Cristina Fernández de Kirchner, who is ensnared in nearly a dozen corruption scandals and heads the hard-left Peronist faction in Congress, as the country’s vice president. Despite the fact that the head of the ticket, Alberto Fernández, is a quiet party functionary who by most accounts does not fit the usual Peronist mold — he is neither corrupt nor a populist demagogue — many fear that Kirchner will erect a shadow presidency. The little-known Alberto Fernández lacked a robust transition team, adding to rumors about Kirchner. Although the Trump administration should avoid conflict with Buenos Aires, the Peronist party’s recent return is a highly unwelcome sign for U.S. interests in Latin America.
The election was one of the most vacuous in recent memory. If Argentines who cast a vote for the Fernández-Kirchner ticket had scant details about the platform for which they voted, they certainly knew what they voted against — a weak economy, reviled International Monetary Fund (IMF) policies, and with them, economic belt-tightening. In such a morose environment, the political duo found fertile ground to repackage threadbare Peronist ideas that, just four years earlier, had brought the country to its knees and catapulted to power a business-friendly president with a major mandate for change. A campaign that highlighted President Mauricio Macri’s failures rather than Peronist prescriptions permitted Fernández to win without presenting detailed plans for reform. Despite a long career in politics and his service to the various factions of Peronism, Fernández remains an enigma to most Argentines. The slowly mounting evidence, however, points to a Peronist agenda that is more ideological than pragmatic.
Take Argentina’s monstrous IMF loan, for instance. Fernández’s rhetoric underscores one of the most persistent disorders of the Argentine national psyche: Like the fantasies of Jorge Luis Borges, Argentines seem to believe that if they can just borrow enough money, they can somehow hold the bank hostage. Amid the height of the campaign, Fernández declared that Argentina was “virtually defaulting” on its debt obligations, contributing to a plunge in the value of the peso. Rather than repay the loan and return to fiscal responsibility, his position is more a request that the IMF take responsibility for its unsustainable, $57 billion failure (i.e., loan). Should Fernández return Argentina to the path of fiscal rebellion, it would open the door further to China as the financier of last resort.
Compounding Argentina’s problems, there is little hope for an economic recovery — at least not in the short to medium term. Peronism is a movement of redistributionist and populist policies, and the record of Cristina de Kirchner is one of economic stagnation, price and currency controls, and the pursuit of the discredited economic theory of import substitution (where imports are replaced by goods of lower quality produced domestically). The Fernández-Kirchner administration will likely reverse Macri’s much-needed labor and pension reforms, which remain incomplete because of his insistence on gradualism in Argentina’s economic liberalization.
Argentina’s mainstream foreign policy may be the most susceptible to change under the new administration. Under Macri’s leadership, Argentina led the fight against Nicolás Maduro’s dictatorship in Venezuela, was open to new trade deals, and clamped down on Hezbollah’s nefarious activity in South America. In contrast, Fernández has announced his preference for dialogue with Maduro over pressure; approved Evo Morales’s asylum in Argentina after he resigned during an artless attempt to steal Bolivia’s presidency; and managed to ruffle feathers in Brazil by advocating the release of former president Lula da Silva from prison. The guests at his inauguration — a greatest hits list of Venezuelan kleptocrats and Cuban human rights abusers — left the impression that this administration is much like a Russian nesting doll: moderate in its outermost layer, a lot of Cristina de Kirchner in its middle layers, followed by some affinity for Hugo Chávez and Nicolás Maduro in its innermost layer.
While it is likely that Fernández will be forced to prioritize domestic issues, such as positioning the country for a debt restructuring with the IMF, there is little chance that Cristina de Kirchner will take a backseat and enjoy her immunity from prosecution. The opposition’s initial hold on the Chamber of Deputies, Argentina’s lower house, has been reversed through party defections, and the critical check on Fernández’s domestic ambitions will now be international credit markets. Above all, the new administration’s foreign policy should reveal what this latest iteration of Peronism truly entails. That Fernández is purportedly considering a reversal of Hezbollah’s terrorist designation is just the type of move that indicates a return to Argentina’s reactionary foreign policy, when it engaged in anti-American outbursts and deepened partnerships with Iran, China, and Russia.
The Trump administration should not be distracted by Fernández’s claim of pragmatism. After all, when things get tough, antagonizing the U.S. plays well in Argentina’s domestic politics. Instead, the U.S. should prepare itself for Peronism’s worst excesses while trying to steer this new administration away from a well-known road to ruin and diplomatic isolation.