2 Governor of Santa Cruz

When Kirchner entered the governor's office, the province of Santa Cruz — which then contributed only one percent to Argentina's gross national product, primarily through the production of raw materials (mostly oil) — was being battered by the ongoing economic crisis, with high unemployment and a budget deficit equal to USD $1.2 billion. He arranged for substantial investments to stimulate productivity, the labor market, and consumption, and concentrated on eliminating hyperinflation through monetary policy and deregulation, which Carlos Menem, who was elected president in 1989, had been doing on a national level. By eliminating unproductive expenditures and cutting back on tax exemptions for the key petroleum industry, Kirchner restored the financial equilibrium of the province. Through his expansionist and social policies, Kirchner was credited with bringing a substantial measure of prosperity to Santa Cruz. Subsequent studies showed that the province had the best distribution of wealth and lowest levels of poverty in the country, second only to the province of Buenos Aires.

Kirchner emerged as a center-left Peronist, critical of both Menem's far-reaching neoliberal model but also the syndicalist bureaucracy of the PJ. He attached great importance to not only careful management of the budgetary deficits but also economic growth based on domestic production, not speculation. He was also considered a progressive in human rights issues, voicing his opposition to Menem's decision in 1990 to grant a presidential pardon to the leaders of the Videla junta.

Kirchner's tasks as governor were were made easier by the modest scale of the province's economic base and its limited labor market. Critics claimed he was was no different from most of the other Peronist governors, and when push came to shove, he also relied on personalism and authoritarianism, above all in his handling of the provincial media and appointing his judges. Public control of job positions and a heavily-subsidized economy also lent itself to clientism typical in the semi-feudal environment of the remote provinces.

In 1994 and 1998, Kirchner introduced amendments to the provincial constitution, so as to enable him to run for re-election indefinitely, something that Menem later tried to imitate at the national level. As a member of the 1995 Consitutent Assembly organized by Menem and former president Raúl Alfonsín, Kirchner participated in the elaboration of a new Argentine constitution, which made possible for the president to be re-elected to a second four-year term.

In 1995, with his constitutional reforms in place, Kirchner was easily re-elected to second term in office, with 66.5% of the votes. But by now, Kirchner was distancing himself from the charismatic and controversial Memen, who was also the nominal head of the PJ; this was made particularly apparent with the launch of the "Corriente Peronista", an initiative supported by Kirchner to create space within the Movimiento Justicialista to confront the problems facing the country.

The decision of Menem in 1998 to stand for re-election a second time, by means of an ad hoc interpretation of a constitutional clause, met with strong resistance among Peronist rank-and-file, who were finding themselves under increasing pressure due to the highly controversial social and economic policies of the Menem administration. Kirchner joined the camp of Menem's chief opponent within the PJ, the governor of the Buenos Aires province (and later president) Eduardo Duhalde.

The elections of 24 October 1999 were a major upset for the PJ; Menem was beaten by Fernando de la Rúa, the Alianza candidate, and the party lost its majority in Congress . Alianza also made headway in Santa Cruz, but Kirchner nonetheless managed to be re-elected to a third term in May of that year with 45.7% of the vote. De la Rúa's victory was in part a rejection of Menem's perceived flamboyance and corruption during his last term. De la Rúa instituted austerity measures and reforms to improve the economy; taxes were increased to reduce the deficit, the government bureaucracy was trimmed, and legal restrictions on union negotiations were eased.

By late 2000, the Argentine economy was deep in recession and the country was forced in to seek help from the International Monetary Fund (IMF) and private banks to reduce its debt. In December 2000, an aid package of nearly USD $40 billion was arranged, and the government announced a $20 billion public works program that was designed to help revive the economy. Despite measures designed to revive it, the economy remained in recession, however, aggravating the problems posed by the debt and by the restrictions that the IMF imposed in return for aid. Unemployment rose to around 20% at the end of 2001. In November, the government began restructuring the debt, putting it essentially in default. Ongoing economic problems led to a crisis of confidence as depositors began a run on the banks, resulting in the highly unpopular "corralito", a limit, and subsequently a full ban, on withdrawals. The IMF took a hard line, insisting on a 10% cut in the budget before making further payments.

Nationwide food riots, strikes, and demonstrations erupted in late December, leading De La Rúa to resign. A series of interim presidents and renewed demonstrations ended with the appointment of Duhalde as interim president in January 2002, to serve until new presidential elections in 2003. Duhalde devalued the peso, which lost more than two thirds of its value, decimating middle-class savings. There was a strong public rejection of the entire political class, characterized by the pithy slogan que se vayan todos ("away with them all").

3 The 2003 presidential election

Kirchner's electoral promises included "returning to a republic of equals". He distanced himself clearly from the neoliberal regime of the previous 25 years, which he slammed as "inaugurated by the military coup in 1976." After the first round of the election, Kirchner visited the president of Brazil, Luiz Inácio Lula da Silva, who received him enthusiastically. He also declared he was proud of his radical left-wing political past.

Although Menem, who was president from 1989 to 1999, won the first round of the election on April 27, 2003, he only got 24% of the valid votes – just 2% ahead of Kirchner. This was a Pyrrhic victory, as Menem had by then a strongly negative image among a large segment of the Argentine population and had virtually no chance of winning on the run-off. After days of speculation, during which polls forecast a massive victory for Kirchner with about a 30%-40% difference, Menem finally decided to stand down. This automatically made Kirchner president of Argentina. He was sworn in on May 25, 2003 to a four-year term of office.

4 President of Argentina

Kirchner came into office on the tail of the worst crisis in Argentina's history. A country which once vied with Europe in levels of prosperity and considered itself a bulwark of European culture in Latin America found itself deeply impoverished, with a decimated middle-class and malnutrition appearing in the lower strata of society. The country was burdened with USD $178 billion in debt, the government strapped for cash, the far-reaching privatization binge of Menem having deprived it of many of its former sources of income. While Kirchner was partly identified with the clientism, corruption, the "politics as usual" of Menem and the JP, he was nonetheless also seen as a newcomer who arrived at the Casa Rosada without the usual whiff of scandal about him. This perception was strengthened by his efforts to reinvigorate the Argentine Supreme Court, which had been severely compromised by Menem's appointments of judges subservient to him. Shortly after coming into office, Kirchner also suspended the laws of immunity for former military leaders and announced that if they are able to escape justice in Argentina, his government would not oppose extraditing them. He also retired dozens of generals, admirals, and brigadiers from the armed forces whose reputations were tainted by the atrocities of the Dirty War.

Kirchner kept the Minister of the Economy of the Duhalde administration, Roberto Lavagna , who piloted Argentina through the widely hated "corralito" and the painful devaluation, but Lavagna also declared his first priority now was social problems. Argentina's default was the largest in financial history, and ironically it gave Kirchner and Lavagna a certain bargaining power with the IMF, which loathes having bad debts in its books. During his first year of office, Kirchner achieved a difficult agreement to reschedule $84 billion in debts with international organizations, for three years, and this is paving the way for a solution to the $94 billion it still owes to private investors. As of June 2004, settlement of 25 cents to the dollar is being negotiated.

It is Kirchner's resistance to international financial institutions such as the IMF and his objections to "Chicago-style" free-market economics that has perhaps surprised observers most. He has been encouraged in this regard by such figures as the iconoclastic ex- World Bank economist Joseph Stiglitz, who deplores the IMF's measures as recessionary and has urged Argentina to take an independent path. In doing so, Kirchner has broken ranks with recent and current Latin American leaders such as Peru's Alejandro Toledo, who maintain a staunch belief in neoliberal economics as the solution to Latin America's extreme socioeconomic disparities. In this context, Kirchner can best be seen as part of a spectrum of new Latin American leaders, spanning from Chávez in Venezuela to Lula in Brazil, who are actively searching for an alternative to the Washington consensus, which in the eyes of many has proven to be an unsuccessful model for economic development in the region.

Preceded by: Eduardo Duhalde

Presidents of Argentina

Succeeded by: (Incumbent)

5 External links

• BBC News article on his first year
• Official presidential site (in Spanish)

Kirchner, Néstor Kirchner

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