What Would Argentina Look Like Without Fernandez?
Argentine President Cristina Fernandez de Kirchner's health breakdown, and her surgery this week to remove a blood clot near her brain, offered a glimpse of how dependent on her populist leadership the country has become. It wasn't flattering.
After almost six years of Cristinismo -- the nickname for all things related to the president and her policies -- Fernandez is at the center of almost all government decisions in a place with clear economic maladies. Her country is fighting a protracted battle with investors who own billions in unpaid Argentine debt. Costly fuel imports are unsustainable and have helped deplete foreign reserves at a rate of $1 billion a month this year, according to Bloomberg News. Moreover, a managed exchange rate that has lost ground this year has not prevented a deeper depreciation of the peso in the black market for the dollar. Independent estimates put annual inflation at 25 percent, compared with the government's figure of around 10 percent, which is widely considered to be manipulated.
Officials were equally ambiguous about releasing information regarding Fernandez's condition. After the president spent Oct. 5 at the Fundacion Favaloro clinic in Buenos Aires, presidential spokesman Alfredo Scoccimarro read astatement indicating doctors had found the blood clot -- the result of a head injury Fernandez sustained onAug. 12 -- and initially recommended a month's rest. No details were given about her injury, and no questions were permitted from the news media. Following the surgery on Tuesday, which was announced the day before, a terse statement offered little more than doctors' names. Anupdate Wednesday told of a recovery with "no complications," with the president sending "a big kiss to all Argentines."
Aneditorialin Tuesday's La Nacion, a newspaper that has been critical of Cristinismo, asked the questions no one else could: "For almost two months, the authorities covered up the fact that the president had suffered a heavy blow to the head." Assuming she fell, "Did her fall happen because she stumbled or because she fainted? If she fainted, what caused it?"
Key government officials were also seemingly kept in the dark. "The government's first-line political actors were given no information" as a way "of jealously guarding" Fernandez,admitted Fernando Navarro, a provincial lawmaker for the president's electoral alliance, Frente para la Victoria, in remarks to Radio America.
Keeping a tight grip on presidential health is common in governments ruled by a cult of personality (for example, Cuba under Fidel Castro). In countries such as the U.S., the president may be nothing more than a powerful employee, but in Latin America's leftist governments, the leader is seen as a savior. Revealing too much about health issues can undermine that carefully cultivated image. News of former President George W. Bush choking on a pretzel certainly brought him down to a human -- and somewhat clumsy -- level, one that certainly wouldn't be acceptable under a government like Argentina's.
Well-wishers on Twitter -- many using the hashtag #FuerzaCristina (#StrengthCristina) -- may have given the president a much-needed public-relations boost. (According to a recent poll, her popularity had fallen to 33.5 percent, far below the 64.1 percent she enjoyed in October 2011.) Brazilian President Dilma Rousseff sent her best in a Sunday tweet: "My solidarity to @CFKArgentina, who is under medical leave. @CFKArgentina is a friend of Brazil and of mine. #FuerzaCristina." Fernandez's office was also quick to announce that Pope Francis I, a native of Argentina, had sent his well wishes and was praying for Fernandez's recovery.
However, the president's absence has also shined a light on her unpopular vice president, Amado Boudou, who is still suffering from an unresolved influence-peddling scandal, known as Boudougate. It didn't help his image that on Oct. 5, as the president was undergoing her medical review and before he took over her duties, Boudou was seen riding a motorbike across Brazil's capital.
The past few days have also shown that Boudou is considered little more than a useless appendix, especially when compared with Carlos Zannini, the president's legal and technical secretary and a power broker within Fernandez's party. "At this moment, there are two presidents: a formal temporary one, Amado Boudou, and a de facto one, Zannini," La Nacion columnist Joaquin Morales Sola wrote Wednesday. "The only one with real power is the one who was never elected in the first place."
As for what Fernandez's condition means for the country going forward, "It is reasonable for the president to ask herself how she will work fewer hours with ministers that only wait for her to tell them what to do," Morales Sola wrote.
Cristinistas deny that such a crippling dependency exists. In a Thursday column for the pro-government newspaper Tiempo Argentino, Daniel Miguez denounced "a media campaign following the president's health problem in which the leitmotif is to create alarm, taking advantage of the difficult moments that Argentines face in Cristina's absence."
Nevertheless, Fernandez's faltering health, as well as the possibility that her allies will suffer defeat in this month's congressional elections, may have added to foreign investors' hopes that the era of Cristinismo is almost over. Government dollar bonds jumped 0.9 percent on Monday upon news of the president's impending surgery, according to Bloomberg. Local-law bonds due 2017 then touched a 19-month high as speculation swirled that Fernandez's health would require her to step down. This followed last week'srulingby U.S. District Judge Thomas Griesa that Argentina cannot exchange restructured international bonds for debt payable in Argentina, as the government had planned to do to avoid paying holders of defaulted debt. (A crisis may still be far off; as Credit Suisse put it in a Sept. 26 research note, a default caused by creditors' litigation "remains at least six months out and could easily be delayed.")
Such enthusiasm may be short-lived. If Fernandez recovers -- as she probably will -- her dysfunctional administration has two more years to govern. But her populist policies will likely live on even during the initial stages of a new administration -- an economic and political tragedy for Argentina.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.