Argentine leader defies her critics

In a country that reveres therapy, Argentines are increasingly analysing their president.

Still shrouded in widow’s weeds two years after her husband’s death, Cristina Fernández de Kirchner has taken strides in the year since winning re-election with 54 per cent of the vote to deepen an economic model she says delivers social inclusion.

Yet for someone who, before she took office in 2007, was seen as outward-looking and bent on strengthening institutions, the president appears increasingly insular and ideological.

Amid a host of pressing issues – the economy shuddered to a halt in the second quarter after growth of 8.9 per cent last year, the International Monetary Fund has threatened to censure Argentina over faulty inflation and growth figures, crime is rising and inflation is stubbornly high – her approval rating at home has sunk for four consecutive months. With midterm elections looming in 2013 it is currently languishing at 24 per cent, according to a Management & Fit poll.

Ignoring anti-government protests – including mass demonstrations in cities across the country last month where tens of thousands noisily banged pots and pans to signal their displeasure over crime, a mooted constitutional amendment that would allow Ms Fernández unlimited terms in office and dollar restrictions – she continues to attack the growing ranks of her critics.

“She feels no need to be accountable to people who aren’t considered to be sympathetic,” said Mark Jones, a professor at Rice University in Houston.

During a US trip to the UN general assembly late last month, she gave combative performances at Georgetown and Harvard universities – fending off claims that Argentina’s real inflation rate is more than double the official 10 per cent; denying an official “clamp” on the dollar despite a swath of regulations limiting access to a currency Argentines have traditionally seen as a refuge from their own wobbly peso; and lashing out at the media, which she accuses of distorting the truth.

“She’s treating us as if we are all stupid by saying such things,” said Alberto Fernández, a former ally and cabinet chief. “The sensation is that we have a president who doesn’t perceive or who denies what is actually happening.”

Ms Fernández – who met the head of ExxonMobil during her US trip in search of deep pocketed partners for YPF, the oil company expropriated by the government in May, may be failing to factor in that this perception of her attitude could discourage investors.

The impression her US tour left was one of “bewilderment and shaking of heads”, says Michael Shifter, president of the Inter-American Dialogue, a Washington think-tank. “She did not convince a lot of people that it is worth investing a lot of time to build relationships with Argentina.”

On the wider international stage, Argentina looks increasingly provincial. While Brazil has ambitions to match its growing economic clout with a greater role in world affairs and is eyeing a permanent UN Security Council seat, Argentina’s foreign policy is largely focused on the sovereignty of the Falkland Islands.

Hugo Chávez, Venezuela’s veteran socialist leader, saluted Ms Fernández in his re-election victory speech on Sunday, but with Argentina’s data credibility issues and populist policies making it an outlier in an increasingly investment-friendly continent, more than one regional official has privately cradled his head in his hands when the subject of Argentina is raised.

In stark contrast to her aggressive tone in the US, Ms Fernández’s first appearance after returning home featured the smiling head of state addressing an audience of sympathisers while framed by images of former first lady Evita Perón, a national icon. She later appeared on a balcony in the government palace, chanting and dancing with flag-waving supporters below.

Her power base lies among Argentina’s working class and poor, and she sees herself as waging an important international battle over how rich countries treat emerging nations that are flexing increasing economic muscle.

At home and abroad, she remains entirely on-message – in the US she suggested that Americans who questioned Argentina’s official inflation data were naive if they believed their own. But her message “is increasingly at odds with reality”, says Mr Jones.

Amid the mounting criticism, Ms Fernández sees the problem more in terms of getting a hypercritical media to give airtime or column inches to her achievements. Returning from the US, she vowed: “We will respond to aggression, to confrontation, with management.”

Ahead of next year’s midterms, Laurence Allen at IHS Global Insight, a consultancy, said she was trying to “filter reality – inflation, protests, negative messages from the IMF – in a coherent way. That remains the challenge”.

However, there are growing signs that discontent is widening beyond the middle class. Coastguards and the gendarmerie, a military police force, last week staged unprecedented demonstrations against a decree that led to wage cuts for many.

The spectacle of uniformed security officials in open conflict with the government at a time when rising crime is a top public concern was an embarrassment for the government.

Nonetheless, with the opposition in disarray and many observers believing little stands in the way of constitutional change to allow re-election, as long as she avoids glaring errors and kick-starts the economy Ms Fernández may yet get another crack at the presidency in 2015.

Whether she will retain enough support to win is another question. “You can continue to manipulate reality only for so long,” said Diego Ferro, a fund manager at Greylock Capital . “But reality is catching up [with] her.”

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