Thu | Aug 17, 2017

New Argentine president assumes power, promises many changes

Published:Friday | December 11, 2015 | 12:00 AM

New Argentine president assumes power, promises many changes

After 12 years of often divisive rule and heavy spending on social welfare programmes, Argentina's president-elect promises to usher in an era of more civil discourse and roll back much of the spending that many economists say has brought the South American nation to the brink of crisis.

President Mauricio Macri was sworn in Thursday after defeating the chosen successor of outgoing President Cristina Fern·ndez during last month's election. Macri ran on free-market ideas, promising to overhaul a struggling economy and be a leader "who listens more and talks less," a clear dig at Fern·ndez, who frequently blasted opponents during hours-long speeches.

Fern·ndez, and before her late husband and predecessor, Nestor Kirchner, dominated Argentina's political landscape for the last 12 years. The power couple sharply increased spending on social welfare programmes while raising tariffs in attempts to protect local industries and aligning the country with leftist leaders like late Venezuelan President Hugo Ch·vez and Bolivian President Evo Morales.

Macri has promised to undo many of those policies and improve relations with the United States. While his election victory represented a seismic change in Argentine politics, enacting his reforms will prove difficult.

He inherits myriad problems: Inflation around 30 per cent, dangerously low foreign reserves for the third-largest economy in Latin America and a long-time spat with a group of creditors in the United States that has kept Argentina on the margins of international credit markets.

Macri will also be wedged in by campaign promises to lift restrictions on buying US dollars, and thus eliminate a booming black market that has made it difficult for local businesses to operate. The lifting of restrictions will likely lead to a devaluation of the Argentine peso, a scary proposition in a country that defaulted on US$100 billion in debt during a 2001-2002 financial crisis which plunged half the country into poverty.

Macri will have to manoeuvre without ruling majorities in either chamber. However, his party will control both the city of Buenos Aires and the vast Buenos Aires province, where 40 per cent of the country's 41 million people live. He will also have to work to win over a polarised electorate and Fern·ndez has made clear she will be a stiff opposition opponent.

In recent weeks, Fern·ndez rushed dozens of bills through Congress, appointed ambassadors and many other public workers and cut some taxes on the provinces, which will all make Macri's initial months more difficult.

- AP