Argentina’s election on Sunday represented the starkest choice the country has faced since the authoritarian era of Juan and Evita Peron began in the 1940s. The seven-point victory of center-right candidate Mauricio Macri may herald a real shift towards more sensible economics and less anti-U.S. policies in Latin America.

Defeated Peronist candidate Daniel Scioli was a hand-picked defender of the interventionist economics of his party’s retiring President Christina Fernandez de Kirchner.


In a recent TV interview, Scioli summed up the differences between him and Macri simply: “I defend the role of the state and he defends the role of the market.” He accused Macri, a leading businessman and mayor of Buenos Aires, of representing policies of “savage capitalism” that would devastate the poor.

Argentina’s voters have often fallen for such rhetoric, but not this year. The record of Kirchner and her Peronist party was a disaster and not easily ignored. As The Economist magazine put it:

Fernández has hoarded power and suppressed dissent. She has bent the central bank to her will, muzzled the government’s statistics institute and bullied the media. She has tried, less successfully, to suborn the independence of the judiciary. . . . The country is in danger of running out of reserves; the budget deficit this year is likely to be 6% of GDP; inflation is estimated at 25%; and growth is absent.

Sergio Berenszlein, an Argentine political analyst, told the BBC the Peronist defeat will mark a clear break in the country’s policies:

She represents a phobia towards globalisation, similar to movements such as Occupy Wall Street in America or Ukip in Britain, anti-globalisation movements of either the right or left. For a long time, Argentina voted in that direction, but the mood has shifted to the point that Argentina now seems poised to vote in favour of a pro-market political force for the first time.




Macri will be inaugurated on December 10, and will face challenges given that his coalition still will be only a minority in the Argentine Congress. But he plans full use of his executive powers. Look for some early moves that will signal investors that Argentina is once again a rational place to do business, including the end of the country’s bizarre dual exchange rate and price controls on over 400 basic goods.