The stability of Argentinian democracy is under threat. Multiple precursors to democratic erosion are present, including ongoing threats to both vertical and horizontal accountability exemplified by widespread vertical corruption, and efforts to weaken if not reduce the independence of the judiciary. The Latin American country is also in the midst of yet another economic crisis, exacerbated in part by harsh measures taken by president Alberto Fernández to quell the spread of the novel coronavirus pandemic. Political polarization in Argentina, known as la grieta or ‘the crack,’ poses a substantial threat by undermining potential for cooperation between the ruling left-wing, Peronist Frente de Todos (FdT) and opposition Juntos por el Cambio (JC) coalitions at a pivotal moment. Furthermore, the nexus between vertical corruption and a questionably independent judiciary is epitomized by the immunity of Cristina Fernández de Kirchner, current vice president and former two-term president from 2007-2015.
Argentina has a tumultuous political and economic history. The country’s six coups d’état throughout the 20th century are perhaps rivaled only by its nine loan defaults since attaining independence from Spain in the early 19th century. Democracy was firmly established in 1983 following the fall of the last Argentine military junta, which after ascending to power in 1976 through a coup, ruled over a period subsequently known as the Dirty War, during which between 10,000-30,000 Argentinians were forcibly disappeared in a campaign of state terrorism. While the military has since remained in its barracks, ruptures in Argentina’s nascent democracy were evident as early as 1994 when Peronist President Carlos Menem restructured the constitution, relaxing term limits and loading the Supreme Court.
Argentina experienced a crippling economic crisis in 2001. Defaulting on IMF loans, the country spiraled into political turmoil, resulting in several successive presidential resignations. In its wake in 2003, Peronist Justicialist Party (PJ) candidate Nestor Kirchner ascended to the presidency, bringing with him economic recovery, targeted judicial reform, and widespread corruption. Kirchner succeeded in restructuring the country’s foreign debt with a 70% reduction that, when coupled with increasing export prices, enabled the economy to quickly rebound.
The year 2007 foresaw Nestor’s wife, Cristina Fernández de Kirchner ascend to presidential office, where she would remain until the expiration of her term limits in 2015, easily becoming the most polarizing figure in Argentine politics along the way. Pervasive accusations of corruption and attacks on the judiciary were staples of the Kirchnerismo period. Examples include Cristina’s public critique of a 2010 Supreme Court ruling charging Santa Cruz governor Daniel Peralta for his refusal to remove former Santa Cruz attorney general Eduardo Sosa. Cristina prevented Peralta’s removal from office, thereby blunting the efficacy of judicial oversight.
Further examples illustrate a political environment characterized by a 2009 US State Department cable, which declared that “glaring weaknesses in key components of Argentina’s anti-corruption architecture point to an emasculated institutional framework incapable of providing needed checks and balances.” At least two former members of Nestor’s cabinet, Planning Minister Julio de Vido and Transportation Secretary Ricardo Jaime have been involved in corruption. In one instance, Jaime was indicted for receiving bribes in transactions with foreign companies over the acquisition of materials at extensively inflated prices. In another, de Vido was accused by economic minister Roberto Lavagna of awarding advantageous federal contracts to friendly businesses, which were subsequently found in 2006 by the Argentine Highway Authority to have been awarded contracts routinely over-budget between 29 and 90 percent on average. Importantly, this business cartel had close ties to Nestor Kirchner, which explains the lack of judicial investigation, congressional inquiry, and almost immediate replacement of Lavagna.
Cristina herself faces a litany of charges, identified as a defendant in eleven separate cases as of 2019. She has been indicted on charges of manipulating the Central Bank, alleged to have swindled over $3 billion through the dollar futures market. In relation to the Austral Construcciones scandal and its owner Lazaro Baez, Cristina was indicted along with Baez and de Vido for fraud and corruption stemming from the alleged awarding of almost $3 billion in contracts to Baez’s company. Testimony contended the company was a front for Cristina and Nestor’s business ventures, and money filled suitcases were said to have shipped to Santa Cruz from the presidential palace on a weekly basis. A 2018 La Nación investigation seemingly confirmed these allegations by publishing the contents of the Kirchner’s longtime driver, which detailed alleged bribes paid to business executives spanning both Nestor and Cristina’s presidencies, eclipsing $53 million. Even more disturbingly, Cristina was indicted in 2017 on charges of treason, aggravated concealment, and obstruction of justice, accused of having orchestrated a coverup of Iranian involvement in the 1994 Argentinian Israelite Mutual Association bombing that killed 85 and wounded hundreds in Buenos Aires. The prosecutor in that case, Alberto Nisman, was found murdered with a bullet in his head hours before he was scheduled to testify.
Indicative of weakened horizontal accountability in Argentina, through her successful campaigns for senate in 2017 and vice president in 2019, the former president enjoys immunity from these charges. It is through this lens that ongoing reduction in judicial independence is most evident. In September of 2020, current president Alberto Fernández issued a decree removing three judges from their federal appellate benches. Perhaps unsurprisingly given the context, all three were involved in Cristina’s corruption cases. In another hotly contested move, president Fernández introduced a judicial reform bill this summer to expand the federal courts, ostensibly modernizing and improving efficiency within the justice system, yet more widely seen as an attempt to protect the vice president other powerful figures through diffusion of power away from judges responsible for investigating high-profile corruption cases.
Remaining, of course, is the pressing issue of economic crisis. Argentina is in the midst of a recession, sparked in part by the currency collapse in 2018 during Mauricio Macri’s administration. Numerous factors contributed to this collapse, including the US-China trade war, low commodity prices, drought, and slow regional growth. The IMF soon after responded with a $56 billion bailout, the largest ever issued by the Fund. Exacerbating an already deteriorating situation, one of a rapidly slowing economy characterized by an estimated 2.7 percent real GDP contraction and consumer price inflation rising to an average of 53.5 percent in 2019, negative effects from the novel coronavirus pandemic and ensuing severe and prolonged restrictions imposed by Fernández have blunted Argentina’s economic forecast. The Economist Intelligence Unit’s 2020 Argentina Country Commerce report anticipates an economic contraction of over 11 percent, one of the sharpest downturns in Latin America.
Argentina’s economic future is essentially dependent on the outcome of current IMF negotiations surrounding a new loan agreement. After defaulting on $66 billion in external debt in May, the Fernández administration reached a restructuring agreement with creditors. Yet as payments on $45 billion in IMF loans from 2018 are scheduled to begin next year, current negotiations are of paramount importance as failure could potentially mean a descent into hyperinflation.
In sum, Argentina is in a dangerous predicament. Over 40 precent of the population currently lives below the poverty line, and employment is expected to rise to 14 percent over the next year. Its economic future rests on successful renegotiation of tens of billions of debt, with a failure to do so producing potentially catastrophic results. A successful renegotiation will just as likely require substantial economic reforms, opposition to which may be intense. The country also faces rampant corruption, with Transparency International reporting in 2019 that 49 percent of Argentinians believing corruption has increased over the past year, while 13 percent of public service users report having paid bribers over the same time period. Furthermore, the independence of the judiciary is currently in question, as 60 percent of Argentines believe current efforts at judicial reform serve the function of controlling the justice system to benefit the government. How Alberto Fernández and his administration will handle these challenges remains to be seen.
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