Three Sundays ago, the government of Argentine President Mauricio Macri suffered a serious setback to his re-election campaign, when Peronist opposition candidateAlberto Fernández drew nearly 50 percent of the vote in the country’s presidential primary elections. Discontent with the economic situation, including high inflation and unemployment, propelled a protest vote against the party in power. Fernández is the odds-on favorite in the general election, which will take place October 27th.
|Today's official exchange rates against the US dollar.|
In the aftermath of the primary, Argentina’s peso plunged from 45 to the dollar to nearly 60 before rebounding slightly into the high 50s. That fueled inflationary fears—though one might argue that’s something Argentines are accustomed to—but the bigger problem appeared to be the Macri administration’s shambolically inconsistent approach toward the issues.
|An extensive wine tasting at Aldo's tomorrow will cost about US$10.|
In the short term, foreign visitors may benefit—at least until prices catch up with devaluation. For the moment I’ll just note, anecdotally, that a wine tasting tomorrow at Aldo’s—a premium restaurant just a block off Buenos Aires’s central Plaza de Mayo—will cost only about US$10. That includes accompanying snacks, plus discounts on optional wine purchases and dinner itself, if desired (Full disclosure: I have lunched anonymously at Aldo’s and would certainly recommend it).
|In 2014, in Puerto Madryn, I changed my dollars at this auto glass repair shop.|
Even if there’s a short-term advantage, politics may mean it doesn’t last, especially if the opposition wins in October. Under the previous government of Cristina Fernández de Kirchner, foreign exchange controls and currency manipulation made travel in Argentina awkward, and encouraged a flourishing black market where tourists and Argentines themselves would change their dollars under the table in cuevas, so-called “caves”—in one case, in the Patagonian city of Puerto Madryn, I changed my cash dollars surreptitiously in an auto glass repair shop.
Meanwhile, in Argentina’s Byzantine politics, the presidential candidacy of Alberto Fernández seems an odd one because the vice-presidential running mate is Cristina Fernández de Kirchner (no relation)—a political powerhouse in her own right who’s under multiple corruption indictments from which her current senatorial seat provides her immunity.
|In 1973, when Argentines chose Héctor Cámpora as their president, they knew they'd be getting Juan Domingo Perón.|
Given that Alberto Fernández served both the late former President Néstor Kirchner and his successor/wife, Cristina could be the power behind the throne, so to speak. This is not unprecedented in Argentine politics—in 1973, when Héctor Cámpora won the presidency with Juan Domingo Perón still in exile, the party’s slogan was “Cámpora al Gobierno, ¡Perón al poder!” (Cámpora to the government, Perón in power!).
It’s worth noting that Argentina’s isn’t the only currency Southern Cone currency showing weakness. When I left Chile, in mid-April, their peso was at 660 to the dollar. Today it’s almost 720, nearly a ten percent decline. That may make Argentina’s neighbor somewhat more affordable, but its economy (and politics) are not nearly so volatile.