December 6, 2013
Spate of economic news may not be felt at the polls
Over the past few weeks, economic news has dominated the headlines. But despite the tons of ink devoted to the issue, questions remain over how much they may alter the scenario for the October midterm elections.
Political and economic analysts raised doubts about those potential effects, noting a hike in the income tax floor may not be as positive as it may appear at first glance.
Last week the Kirchnerite administration rose to 15,000 pesos for both married and single workers, but the measure will largely benefit the middle and the upper-middle class — sectors which are most likely to have turned away from the ruling Victory Front (FpV) in recent years.
Meanwhile, developments that may have hurt the national government are likely to have little effect, and, ultimately, the Fernández de Kirchner administration will probably come out electorally unscathed from two weeks of turmoil, as a proactive approach counteracted the detriments of a perceived mis-management of the “vulture” funds conflict as well as measures taken against the interests of Chilean airline LAN.
If anything, a shift toward a more conciliatory stance of listening to long-held demands, tied with an overall willingness to talk with different sectors of society, may have gained the President a few points.
The ruling in New York against the government and in favour of holdout hedge funds’ demands for full repayment of 2002’s defaulted bonds brought the threat of a “technical” default storming back to the fore, while the widely supported initiative for a third round of debt swaps is unlikely to do much more than manifest willingness to pay.
The government’s conflict with LAN over the intended eviction from its Metropolitan Airport hangar was regarded by analysts as the most influential development of recent weeks.
Hedge funds ‘distant’
Although the New York appeals court ruling in favour of what President Cristina Fernández de Kirchner has long called “vulture funds” could have a profound effect on Argentina’s position in the international markets, the issue is far too abstract to have a major electoral impact, sociologist and political analyst Ricardo Rouvier told the Herald.
Only the most informed citizens would likely be moved by the issue, and they are the ones more likely to already have their minds made up on whom to support in October, he added.
Moreover, in such a volatile climate, daily media stories have a short term impact on the electorate, IPSOS-Mora y Araujo director Luis Costa told this newspaper.
That also discounts the fact that Argentines have been hearing about debt defaults and restructurings for more than a decade.
The government’s “foreign debt policy is an issue that has been extensively evaluated already and is distant for the average voter as well,” Costa added.
National and popular?
The increase in the income tax floor may be dismissed as a simple electoral ploy. But even those who may be initially sceptical are likely to, in the end, have a more positive than negative view of the move, Analogías think-tank head Analía del Franco said.
“Although the measure may have come late, it was important within a context of a weakened government,” she said, before highlighting that it “will not change the electoral tendency significantly.”
Regarding the loss of a campaign bastion for the opposition, Del Franco said it was the least of their concerns considering those who oppose the government “have their hands full of demands — and differences.”
OPSM consultancy head Enrique Zuleta Puceiro pointed to the limited scope of the initiative, which does not account for “the self-employed, the unemployed and those in under-the-table employment,” but rather helps “those in large cities with high employment who will not vote for her regardless.”
Even those who will be directly affected by the measure may not make the direct connection to Fernández de Kirchner before the midterms — after all, there is little time for affected workers to feel the extra cash in their wallets before they head to the polls on October 27.
The LAN conflict
Analysts largely agreed that the issue that may have the biggest electoral effect began on August 20, when the state-run airport regulatory body ORSNA notified LAN it had ten days to empty out its hangar in the City’s Jorge Newbery metropolitan airport.
What followed was a series of back-and-forths, including bilateral meetings with Chile officials, ultimately culminating on a judge blocking any sort of eviction last week.
“The conflict with LAN appeared almost self-destructive” by the government amid otherwise proactive and positive measures, Costa told the Herald.
LAN is a company that has an “almost impeccable” image among consumers, and in the government’s struggle of “the people versus corporations,” the conflict with the Chilean airline is a far cry from the battle against the Clarín Group, the country’s largest media conglomerate that has a much shadier history tied to the last military dictatorship.
Plus, the good versus evil story line is not so clear. “The tactic of demonizing La Cámpora and its involvement in Aerolíneas has clearly worked,” said Del Franco.
At the same time, though, it is important to consider “what percentage of the population is looking at this affair closely: everyone or just those who travel on airplanes?” pointed out Costa.
Dialogue brings votes?
At the end of the day though, what may end up winning over a certain proportion of voters over may not be a specific measure, but rather the apparent willingness to listen to different sectors of society.
Fernández de Kirchner launched what she said would be a series of talks with business and union leaders in Santa Cruz on August 21, which she later continued after announcing the income tax hike.
Del Franco argued that addressing the longstanding income tax floor demand complemented the establishment of dialogue channels and meetings with key economic actors, thus helping to set up an image of “Cristina listens.”
In general terms, Zuleta Puceiro forecast “minimum growth in votes,” for Kirchnerism, as the government “accepts the existence of and addresses problems and creates mechanisms for dialogue,” counteracting the public’s perception of a poor performance in the administration of the debt case in New York.
That the president is saying I am dedicated to “innovation, pending issues, progress and reverting things that have gone badly,” prevents deterioration and improves the administration’s image ahead of its end in 2015, Zuleta Puceiro concluded.