International Finance

Argentina’s electoral campaign kicks off

Six presidential pre-candidates spelled out their political and economic program during Industry Day on September 1 in Buenos Aires Kamilia Lahrichi September 3, 2014: More than one year ahead of Argentina’s general elections in October 2015, six presidential pre-candidates spelled out their political and economic program during Industry Day on September 1 in Buenos Aires. The Argentine Confederation of Medium-sized Businesses (CAME) organised this one-day...

Six presidential pre-candidates spelled out their political and economic program during Industry Day on September 1 in Buenos Aires

Kamilia Lahrichi

September 3, 2014: More than one year ahead of Argentina’s general elections in October 2015, six presidential pre-candidates spelled out their political and economic program during Industry Day on September 1 in Buenos Aires.

The Argentine Confederation of Medium-sized Businesses (CAME) organised this one-day event on strategies to boost growth of small and medium-sized enterprises (SMEs). This month, production decreased by 2.8%.

About 750 leaders from 23 provinces and representatives of 345 chambers and federations participated in the forum.

“It is important that the candidates get closer to SMEs, understand their realities and propose solutions to the problems we face,” explained Pedro Casacles, Director of the industry branch at CAME.

These issues “are vital for Argentina’s growth, as SMEs generate 60% of employment and more than 45% of sales,” he said.

Industry Day has been celebrated on September 2 since 1941. It commemorates the country’s first export in 1587.

This event is also the opportunity for Argentines to find out who they will vote for next year.

“For the first time, all the [pre-] candidates are in contact with the citizens and this is very important. This allows us to have a better understanding of what they offer and make better decisions,” said Mariela Galinger, Secretary of the Commercial, Industrial and Farming Center and Services in Argentina.

Anti-populist platforms

Contenders to the Pink House – the presidential office – sharply criticised Argentina’s populist government.

Amid worsening recession, industrial output has slowed and the unemployment rate rose to 7.5% in the second quarter.

Emblematic of the discontent with Cristina Fernandez de Kirchner’s administration, labor unions staged a national strike last week – the second in less than five months – to demand higher wages.

“Politics has to be done in another way,” said Mauricio Macri, head of the government of Buenos Aires and an opposition leader. The government should re-establish people’s trust and focus on “investment rather than spending”, he added.

Mr. Macri also said that the government should better manage the country’s resources.

In particular, inflation and the energy crisis are the two structural problems the Argentine economy faces, explained Sergio Massa, mayor of Tigre and another opposition leader.

An additional bone of contention with the government is the tax burden, which grew to 12% of GDP in recent years, stressed Mr. Massa.

He also lambasted the government’s heavy spending: “60% of public expenditure is spent on the national state and 40% on the provinces whilst 70% of the income goes to the national state and the remaining 30% to the provinces.”

“This imbalance has an impact on the investment capacity and generates imbalances and dependencies that break with the federalism and the stability of the provinces,” he said.

Ernesto Sanz, politician in the social liberal Argentine Radical Civic Union party, argued that “distributing wealth requires having a smart government”. He pointed out that the next government would have to deal with 12 million people living below the poverty line.

Mr. Sanz underscored that Argentina is heading toward “the end of an era,” with which Daniel Scioli, the pro-government pre-candidate, disagreed.

The governor of the Buenos Aires province toned down the opposition leaders’ speeches. “People are not looking for a total change,” he said. “We don’t need a revolution […] in Argentina” to overcome today’s economic difficulties, he added.

Courting SMEs

All candidates wooed business leaders by promoting market-friendly policies.

Julio Cobos, a former vice-president of President Fernandez de Kirchner, stressed the need to boost production, create jobs and reduce public spending.

He said that inflation could reach 18 percent in 2015 and then decrease to a single-digit number.

Argentina needs at least three years to control inflation, added Hermes Binner, leader of a political coalition. All sectors need to participate in the economy to overcome the current economic problems, he said.

Mr. Binner, who came second in the 2011 presidential election, said that the country must think about “the industrialisation of primary products to increase value added”.

Elisa Carrio, founder of the social liberal Civic Coalition ARI, called for revising Argentina’s import substitution policy, which hamstrings international trade.

On August 22, the World Trade Organization ruled that the South American country’s import restrictions breached global trade rules.

Ms. Carrio referred to Argentina’s first immigrants who started their businesses “with credit and hard work”. “Argentina needs to come back to that,” she said.

In addition, Mr. Sanz called for an end to “the assistance culture that leaves behind the work culture.” He referred to the tax system that makes Argentines pay taxes at the customs, in banks and in supermarkets.

Faithful to the government, Mr. Scioli railed against his rivals, saying that: “These are the ones who want to govern for a few, for the rich, those who promote fixing duties at zero on soybean and not explaining how they will sustain the social security system in Argentina.”

“Do not vote for the narco-state”

Known for being outspoken, Ms. Carrio called corrupted government officials “mobsters”. She argued that candidates are “liars” because “they answer to those who finance their political campaign”, making the audience laugh.

“I want to clean the state and the customs,” she said.

“I have a lot of sympathy for Elisa Carrio. I like very much [the fact] she says the truth that many do not dare to say. I would like her to ally with Macri,” said Ms. Galinger, a participant.

“I don’t mind if there is just one woman [pre-] candidate because there are a lot of women in politics [in Argentina],” said Marcela Padula, Coordinator at the Merchants, industrialists and professionals association.


“These speeches are obviously political campaign speeches so we have to be careful,” explained Ms. Padula.

“[Yet,] what I liked is the attitude to solve problems – whether it works out or not –regarding employment and productivity,” she said.

Government officials who participated in the CAME event disapproved of the criticism of the administration.

“Those candidates are from the opposition and it is very easy to have a critical discourse without any projects,” said Juan Bias Taladrid, Undersecretary of Industry and Trade of the government of Mar del Plata, in the south of Buenos Aires.

“I am a civil servant. So, obviously the one who shared my position is Daniel Scioli. Of all the candidates, he is the one who has the best management skills and he is in charge of the largest province [the Buenos Aires province],” he said.

“I think that Daniel Scioli brings together the characteristics of the person that has to lead our country. [He is] a person of reason, dialogue and he bridges all the sectors,” said Ricardo A. Lopez Ruiz, General Director of Institutional Development for the government in Corrientes, a province in the north of the country.

Nonetheless, the majority of business leaders endorsed opposition leaders’ platforms.

“I liked very much the speeches of [Mauricio] Macri and Ernesto Sanz because they were very broad and realistic: [they spoke about] the reality of our country,” said Carlina E. Dorado, an entrepreneur.

“Macri […] wants a different, nicer and clean country with growth and development: this is what I liked the most about his speech,” she added.

Mr. Macri is known as an ally of the farming sector, which is why he has garnered support of wine producers.

“He understands best topics related to the regional economy. He gave the broadest [economic] panorama at the micro and macro levels,” said Jose Alejandro Pons, a wine producer.

Small pool of voters

Despite an apparent consensus amongst business leaders, they do not have the last word on the 2015 presidential election.

“We need to wait until next year’s election to see [who will be the next president],” said Basilio Nykolyn, Director of the industry of the Chaco province, which ranks last by GDP per capita of all provinces.

The populist administration of President Fernandez de Kirchner has seduced many Argentines with socialist policies like loans to poor families.

“Businesspeople do not form the majority. The thing is that the government’s social plans guarantee an important quantity of voters. This is unfortunate,” he added, whispering.

Other reports: WTO rules against Argentina’s protectionism

Poverty keeps growing in Buenos Aires as Argentina wakes up in default

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