MercoPress. South Atlantic News Agency

Mrs. Kirchner's unsolved problems according to NYT

Argentina's president is rapidly loosing her political glamour

The New York Times forecasts bad times ahead for President Cristina Fernandez de Kirchner in spite of booming times for the Argentine economy. “Mrs. Kirchner is struggling to break free of the curse of Argentine leaders past: the failure to govern successfully in the good times”, writes Alexei Barrionuevo from Buenos Aires.

The article "Conflicts hang over Argentine leader"says that not only has Mrs. Kirchner's popularity plummeted with only five months in office but "the Kirchners' own supporters, union leaders and provincial governors, are starting to question them". Mrs. Kirchner is facing the 75 days long unsolved conflict with farmers and with winter just round the corner, "Argentina's chances of avoiding another energy crisis like last year's might come down to weather and the generosity of neighboring Brazil, which pledged to export some electricity". The article follows: These could be giddy times for Argentina and its first elected female president, Cristina Fernandez de Kirchner. Prices for agricultural commodities are soaring, consumer spending has been rising and foreign investment is flowing in. But through five troubled months in office, Mrs. Kirchner is struggling to break free of the curse of Argentine leaders past: the failure to govern successfully in the good times. The economic strategy designed by Mrs. Kirchner's husband, Nestor Kirchner, who preceded her as president, is showing increasing signs of strain. The president has so far refused to change course, which has helped to define the early part of her four-year term. Rising inflation has become the preoccupation of many Argentines. A two-month conflict between the government and farmers over increased export taxes has weakened Mrs. Kirchner's popularity and caused fissures in her Peronist party. And with winter just weeks away in South America, Argentina's chances of avoiding another energy crisis like last year's might come down to weather and the generosity of neighboring Brazil, which pledged to export some electricity. Even Mrs. Kirchner's speech on Sunday on the anniversary of Argentina's May Revolution did not live up to her ambitions. A "social pact" she had planned to announce with labor unions and other groups to battle inflation did not happen. Instead, Mrs. Kirchner was overshadowed by a huge rally organized by farmers' groups, which have become almost a nascent political movement in recent weeks. Mrs. Kirchner had billed May 25 as a chance for Argentines "to leave behind once and for all 200 years of failures and frustrations." But instead of announcing anything new in her speech of about 15 minutes in the northern city of Salta, she recited the accomplishments of the past government. She made no direct mention of the conflict with farmers. Across the country in Rosario, an estimated 300,000 flag-waving farmers staged a demonstration. They took on the president for failing to support the rural interior of the country. "Mrs. President, don't lie to us anymore," said Alfredo de Ángeli, president of the Entre Ríos chapter of the Argentine Agrarian Federation. "You don't know how to run this country." Mrs. Kirchner, a former senator who was handily elected president in October, is seen as a modern-day Eva Perón. She promised to continue the country's prosperity and adopt additional social programs to redistribute wealth. Mr. Kirchner became hugely popular after he revived the country from a crippling economic crisis in 2001 by devaluing the peso; subsidizing transportation, energy and food; and using taxes on agricultural exports to amass revenue. The economy has grown by more than 8% every year since 2003 and added more than 3 million jobs. Many private economists expect that growth rate to fall this year. Almost from the beginning, Mrs. Kirchner's administration has been defined by conflict. Just days after she took over in December, a Miami prosecutor announced a controversial case involving a suitcase containing about 800,000 US dollars that he said was intended as a campaign contribution to Mrs. Kirchner from Venezuela's government. The Argentine president reacted furiously, and the resulting diplomatic row strained relations with the United States. Then in March, the Kirchner government raised agricultural export taxes for the second time since October. The farmers reacted with a crippling strike that shut down many roadways, caused domestic food shortages and made international buyers nervous. Mrs. Kirchner viewed the farmer protests as a political threat. To the producers, the tax increases were "the equivalent of telling someone that you are going to go bankrupt at some point over the next four years," said Alfonso Prat-Gay, a former chief of Argentina's central bank who was the running mate of the opposition candidate Elisa Carrió in last year's election. The prolonged conflict has caused Mrs. Kirchner's popularity to sink from 70% to below 50%, according to Eurasia Group, a risk consulting firm in New York. "Without a doubt, damage has been done," said Julio Burdman, a political analyst here. "The Kirchners' own supporters, union leaders and provincial governors, are starting to question them". Agustín Rossi, the head of the Kirchners' Peronist congressional delegation, defended Mrs. Kirchner, saying she tried early on to propose solutions that would tax smaller-scale and larger-scale farmers at different levels. With prices for food and other items rising rapidly, ordinary Argentines are having a tough time accepting official government statistics, which many private economists believe are being manipulated. These uncertainties have led some middle-class Argentines to cash out savings accounts to buy dollars, a sign they think the government is troubled. Those exchanges are spurring fears that the government will freeze bank accounts and prevent withdrawals of dollars, in a repeat of the economic measures taken in 2001 to stop a bank run. Mr. Rossi dismissed such fears, noting that the country has 50 billion US dollars in reserves, compared with less than 10 billion in 2002. But he said the government will have to make changes. Argentina's economic policies are beginning to limit foreign investment. While foreign direct investment in Latin America increased 46% in 2007, Argentina's investment rose only 14%, badly trailing Brazil, Chile, Colombia and Peru, according to a study by the Economic Commission for Latin America and the Caribbean. Meanwhile, the conflict with farmers is unresolved. Last week, the farmers ceased their second round of strikes to resume negotiating. But the government remains unwilling to yield on the export tax issue. Mr. de Ángeli of the farmers' federation said Sunday that if on Monday "there are no solutions; we will take action on Tuesday."