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Daniel Scioli’s quest to succeed the Kirchners is in danger of hitting the rocks | The World Weekly

Fear, it transpires, is not a winning electoral strategy in Argentina.

Just a month ago, Daniel Scioli looked to be a shoo-in as the next president of Latin America’s third-largest economy. As the chosen successor of Argentina’s fiery leader, Cristina Fernández, he promised Argentines continuity — albeit a more moderate version of her populist, free-spending and nationalist policies.

This Sunday’s presidential election was his to lose. Especially, it seemed, as he could paint his centre-right opponent, Mauricio Macri, as a bloodless “neoliberal” who would wreak untold economic pain on his countrymen.

“His ideas, decisions and proposals are a danger for the whole of our society,” Mr Scioli inveighed during Argentina’s first-ever presidential debate last Sunday. Mr Macri’s promises of change are a “great lie”, he added.

Yet now, on the eve of the vote and with Argentina’s economy in the doldrums, it is Mr Macri, the “turnround candidate” and pro-business mayor of Buenos Aires, who is leading the polls — and with a convincing nine point lead, according to Elypsis, a reputed local pollster.

The shift is a striking illustration of how many countries in the region, such as Brazil and Venezuela, are also adjusting to the end of a decade-long economic boom and how voters are rejecting the governments and charismatic leaders that presided over them.

Mr Scioli’s fear campaign was a “mistake”, said Juan Germano, director of Isonomia, another local pollster.

Sergio Massa, the third contender in the Argentine presidential contest won 21% in the first round making him a potential kingmaker in the view of some analysts. After a cautious endorsement of change, Mr. Massa came out strongly against Daniel Scioli telling reporters in late October that he didn’t want to see Mr. Scioli triumph in the runoff. Merco Press reports that opinion polls show that Mr. Massa’s supporters are expected to split with 60% for Mr. Macri and 40% for Mr. Scioli.

“Scioli failed to understand what Argentines want”, he said, especially after 12 “very intense” years of being ruled by the imperious Ms Fernández and Néstor Kirchner, her late husband. “The desire for a change among Argentines is pretty clear.”

That became obvious on October 25, when Mr Macri won 34 per cent of the vote in the first round. It was not enough to beat Mr Scioli, who won 37 per cent, but it put him within spitting distance.

Crucially, Mr Macri also had voter momentum behind him.

In addition, the government suffered an unprecedented defeat in Buenos Aires province, Argentina’s largest. Traditionally a stronghold of the ruling Peronist party, Mr Scioli had ruled it for the past eight years. The seat instead went to the fresh-faced María Eugenia Vidal, formerly Mr Macri’s deputy mayor.

Mauricio Macri is expected to win this weekend's run off

It is not just the public that is clamouring for change in a country whose stagnating and investment-starved economy is struggling with a widening fiscal deficit, double-digit inflation, an overvalued currency and an acute shortage of dollars. Businesses want change, too.

Early signs that foreign investment is flowing back into an Argentina on the verge of change include a $16bn nuclear deal with China signed last week, while US businesses have been eagerly sending teams to Buenos Aires to scope out opportunities. 

Financial investors are also hugely expectant. Argentine equities and bonds have rallied for the past month as investors have bet that Mr Macri, a former president of Boca Juniors, one of Argentina’s most popular football clubs, will introduce much-needed economic reforms and strengthen the country’s degraded institutions. 

“I have never seen such demand for an Argentine economist,” said Andrés Borenstein, BTG Pactual’s chief economist in Argentina.

“If Macri wins, there is going to be a rally. There is a part of the Macri dividend that is not yet priced in,” he said, estimating that investors are assuming a 60 to 80 per cent probability that Mr Macri will win. 

Argentina is heading for a presidential run-off after a turnround in the fortunes of the opposition candidate, Mauricio Macri. Does the business-friendly mayor of Buenos Aires have credible plans for fixing the economy?

There will be a difficult start for whoever triumphs. The dire economic legacy left by Ms Fernández requires urgent attention. The most immediate problems are an acute shortage of foreign exchange reserves and an overvalued currency.

Mr Macri told the Financial Times in a recent interview that he would lift strict capital controls implemented four years ago on “day one” of his presidency, which will lead to a significant devaluation from Argentina’s official exchange rate and could stoke inflation already running at about 20 per cent.

There are also high hopes that the next government will swiftly settle a marathon legal dispute with a group of “holdout” hedge funds that has blocked Argentina’s access to international capital markets since it defaulted on $100bn of debt in 2001.

Despite the challenges, José Manuel Ortega, a Spaniard who owns a winery in the province of Mendoza, describes a “feeling of hope” among Argentines, who are “tired of more of the same” and realise the economy “cannot continue as it is”.

“From all parts of society to foreign and local investors, people are looking for change. Argentines do not want more conflict. They don’t want an absolutist monarch in power any more,” he says.

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