Argentina: Macri’s popularity is on the wane domestically but not internationally

Polls in Argentina show that President Macri’s domestic popularity has waned significantly since his election in December from a peak of nearly 70% to 53% in April with negative impressions rising from 26% to nearly 43% in the same period.

This is undoubtedly due to the impact of Macri’s austerity measures and the resulting increase in the cost of living. Basic food stuffs have risen in price by nearly 30%. The cost of public transport within Buenos Aires has doubled and utility prices have also risen dramatically as subsidies have been withdrawn – increases of 600% in electricity prices, 500% in water bills, and 300% for gas have been quoted in the media – and over 12,000 public sector workers have been laid off. Inflation has soared to over 30%, resisting Government attempts to peg it at 20-25%. Macri has promised some palliative measures, such as VAT rebates on basic food goods for those on state welfare and retirees on the minimum pension but his new policies have been a shock to the system.

With 1.4 million people below the poverty line, according to Catholic University figures, it is not surprising that there has been social discontent. The unions called a protest march in Buenos Aires on 29 April in the run-up to Labour Day (1 May) which saw thousands come out onto the streets. The Argentine Senate has passed a bill banning further lay-offs of public sector workers and promising double compensation to those already sacked, which, if it also gets through the lower house, will force President Macri to use his veto.

The problem for President Macri is that his reforms for opening up Argentina’s economy to business investment may not have an immediate impact in creating new job opportunities. The IMF has predicted a reduction in Argentina’s economic growth rate to well under 1% for the rest of the year with growth rates rising only marginally in 2017. Yet, the Macri government’s refrain has been that ‘Argentina is open for business’ – and that has been the purpose in inviting international leaders from France, Italy, Spain and the US to visit, each with an entourage of prominent businessmen. Another problem is that Macri is pushing through his reforms during a period of global recession, with Argentina’s major trading partner, Brazil, suffering its worst recession since the great depression of the 1930s as well as political turmoil following the impeachment of President Rousseff, who is under investigation for corruption.

Macri has promised to bear down on corruption – and former President Cristina de Kirchner is under investigation on at least two separate counts. She had to appear in court in Buenos Aires in mid-April, when she addressed a crowd of her erstwhile supporters, accusing the government of a politically motivated attempt to weaken the leadership of the opposition. Macri was himself embarrassed when the so-called ‘Panama Papers’ revealed that he was on the board of two offshore companies, one registered in the Bahamas, the other in Panama, neither of which had he declared as Mayor of Buenos Aires or on election to the Presidency. Macri has dismissed any suggestion of wrong-doing in this.

So, in Argentina, President Macri is becoming increasingly unpopular as his economic reforms begin to bite; yet abroad he remains the golden boy. The resolution of the bonds dispute with the hold-out hedge funds has earned him brownie points in the international financial system, even though the country’s level of indebtedness to GDP remains deeply worrying – and he was able surprisingly easily to push the required legislation through Congress where he is without a majority. Domestically, it seems that people are still willing to believe his promise of an eventual economic turnaround through business regeneration – or is it because the opposition remains divided with Cristina de Kirchner still unpopular and with no obvious successor to her to lead a challenge to the Macri government?