November 20, 2015 / 12:20 PM / 2 years ago

Argentine voters weigh possible sharp turn toward free markets

SAN JUSTO, Argentina (Reuters) - Argentineans heading to the polls on Sunday face a choice between a sharp turn toward free markets and extending a 12-year run of interventionist policies by outgoing President Cristina Fernandez and her now-deceased husband.

A child waves Argentine national flags during the final campaign rally of Argentina's ruling party candidate Daniel Scioli in La Matanza, on the outskirts of Buenos Aires, November 19, 2015. REUTERS/Marcos Brindicci

Revered by the poor for strengthening Argentina’s social safety net and reviled by investors for saddling Latin America’s No. 3 economy with onerous currency and trade controls, Fernandez is barred by law from seeking a third term this year.

“Come out and defend the country!” her party’s candidate Daniel Scioli urged supporters this week, echoing the nationalist rhetoric that propelled Fernandez to power but has failed to dislodge Scioli from second place in the opinion polls.

He warns that front-runner Mauricio Macri would dilute wages with an abrupt currency devaluation and abandon low-income families by ditching vital social and education programs.

Macri dismisses such talk as fearmongering. He would keep welfare programs for the truly needy, and insists that the poor would ultimately be helped by his policy mix of inflation targeting and abandoning the currency controls that have scared investment away from Latin America’s No. 3 economy.

Argentina’s fiscal deficit has widened with increased state spending ahead of the election. Fernandez finances the deficit by printing pesos, which jacks up consumer prices. Inflation is clocked by private analysts at over 20 percent. The market has long dismissed her government’s economic data as fudged.

Fernandez was preceded in office by her late husband, Nestor Kirchner, who became president as the country was bouncing back from a 2002 economic crisis that threw millions of Argentineans into poverty. He increased welfare and oversaw a strong economic recovery powered by a bounceback in domestic consumption and exports of soy, Argentina’s main cash crop.

“We are not the same as they are,” said Macri, who has a comfortable lead in the opinion polls. “We are going to lower inflation, not lie about it.”

Scioli has not criticized Fernandez’s data reporting, but has vowed to revamp the government statistics agency if elected.

Macri has gained support in Buenos Aires suburbs where the country’s highest concentration of voters is located. Last month, Macri ally and dark-horse candidate Maria Eugenia Vidal won the Buenos Aires governorship, galvanizing his base.

But Scioli is still in the race, and has the support of millions of voters who trust the government to provide prosperity more than the free market.

“This election is about how the candidates see the poor,” said Marcelo Paz, a 45-year-old volunteer manning a Scioli campaign booth in the town square of the Buenos Aires suburb of San Justo. “Macri sees poor people as a public expenditure. Scioli sees them as a public investment, a social investment.”

Paz stood in front of a pickup truck draped in a banner showing Scioli flanked by late Argentine strongman Juan Domingo Peron, the father of Argentine populism, and his wife Evita, famous for her impassioned speeches in support of the poor.

The words “They Are My Guide” appeared below Scioli’s picture.

Ana Montes, a 57-year-old nurse, said Macri was the best hope for reforming what she calls a bloated welfare state.

“Too many people who could work if they wanted to are on welfare,” said Montes.

“The banks are filled with people lining up to cash their welfare checks. You can’t advance that way,” she said. “I get up at four in the morning to go to work. They get up at noon.”

Reporting by Hugh Bronstein

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