Argentina's National Airline Renationalised

Any general overview of Latin American economic history will show you how attitudes for or against nationalisations and privatisations swing back and forth over time with a pendulum-like consistency.

The 1980s and 1990s saw the pendulum of state vs. private debate swing back in favour of privatisation after the presumed overreach, corruption and mismanagement of the state-owned enterprises of the mid-20th century. SOEs were meant to have fuelled economic development in many a Latin American country. Unsurprisingly, perhaps, it wasn’t long before the pendulum swung back the other way and privatisation became a word that any politician sought to distance themselves from as far as humanly possible. Of course this didn't always stop them from implementing privatisation. In Bolivia during the 1990s, President Gonzalo Sánchez de Lozada was somehow able to hood-wink the Bolivian people into believing that when he was selling off the rights of the country’s natural resources to foreign multinationals, it wasn’t so much 'privatisation' but rather 'capitalisation'. Yes, there is a difference, but it’s a slight one at best. And it ultimately left the Bolivian government unable to benefit from the huge windfalls that were soon to be made from Bolivia's recently discovered huge natural gas reserves. But more on that in my dissertation paper...

Anyway what drew my attention today through my daily trawl through the BBC website was the news that the Argentine government is to renationalise its floundering airline, Aerolineas Argentinas - Argentine Airline Set For Bumpy Ride. The national airline was one of many companies to been sold off rapidly when Carlos Menem was Argentine President back in the 1990s. Now with the left-of-centre and so-called ‘back-to-the-roots populist Peronism’ of the Kirchner's in hold of the Casa Rosada (Buenos Aires's answer to the White House) a number of the sectors once privatised by Menem have been renationalised.

It seems pretty obvious that it’s going to be hard, if not impossible to bring Aerolineas Argentinas back into profit. Then this nationalisation isn’t just about making a profit. Okay there is the nationalistic sentiment – something Argentines have in bucket loads - that goes hand-in-hand with having a national airline. And with a majority of Argentines actually favouring the government taking control of the airline, it would make political sense for under-pressure President Cristina Kirchner to do something that for once wouldn’t have half the nation up in arms. However I think in a country like Argentina, a country that is so immense in its geographic dimensions, with numerous far-away provinces that depend upon a direct link to the capital, needs a national airline. An airline that is more concerned with servicing these far-away communities than with make a profit at the end of the year.

The President's League Table

Nothing beats the clarity of good old-fashioned list...

So here's an interesting one I stumbled across recently - by means of Greg Week's Latin American blog, 'Two Weeks Notice'. It lists the current popularity ratings amongst Latin American Presidents.

1. 84% Álvaro Uribe, Colombia (3/08)


2. 61% Felipe Calderón, Mexico (5/08)


3. 55% Antonio Saca, El Salvador (5/08)


4. 55% Evo Morales, Bolivia (5/08)


5. 55% Luis Inacio Lula da Silva, Brazil (3/08)


6. 54% Hugo Chávez, Venezuela (4/08)


7. 53% Rafael Correa, Ecuador (6/08)


8. 51% Martín Torrijos, Panama (4/08)


9. 49% Álvaro Colom, Guatemala (3/08)


10. 45% Tabaré Vázquez, Uruguay (3/08)


11. 44% Oscar Arias, Costa Rica (4/08)


12. 44% Michelle Bachelet, Chile (6/08)


13. 38% Manuel Zelaya, Honduras (2/08)


14. 34% Stephen Harper, Canada (3/08)


15. 32% Alan García, Peru (6/08)


16. 30% George W. Bush, United States (6/08)


17. 26% Cristina Fernández, Argentina (5/08)


18. 21% Daniel Ortega, Nicaragua (2/08)
    
19. 5% Nicanor Duarte, Paraguay (3/08)

I'm not too sure as to how much we can read into this. I guess it's no surprise that Colombia's Uribe tops the list. I was chatting with a Colombian guy the other week, and having asked him whether he thought Uribe was good or bad for the country he responded, "he's neither good nor bad...he's AMAZING!" His effectiveness in tackling the FARC guerillas, keeping the economy relatively stable and taking head-on the likes of Chavez and Correa, no doubt playing a part in his popularity. Still I'm not to sure international human rights groups will be to keen in praising his presidency.

Other than that, the Presidents of the "New Left" (Chavez, Correa, Lula, Morales) all seem to be doing alright, though I'm sure they must be down from where they would have been this time last year. And then there's poor old Cristina Fernandez who really is making a dog's dinner out of the popularity she had inherited over from her husband, Nestor Kirchner.

Argentina's Presidential Couple

It’s not often full page newspaper spreads here in the UK are dedicated to Latin American politics. So perhaps it was quite a surprise to find Monday morning's newspapers adorned with the face of Cristina Fernandez de Kirchner, Argentina’s newly elected President. But given the uncanny resemblances between Cristina and the only other Argentine political figure we’ve ever bound to have heard of, Evita, perhaps it shouldn't be too much of a surprise after all.

I don’t think even in Argentina people were able to get too overwhelmed by the whole election. For many the result was a forgone conclusion right from the very outset of the campaign. Was this down to the success of her husband, Nestor Kirchner, in bringing the country back from the economic and political quagmire of 2001/2002? Or was it down to the inability of the opposition forces to unite against a charismatic female leader who was always able to draw on the inevitable Evita undertones and resemblances as a sure means to derive support from the Argentine masses? Furthermore the election campaign was an unorganised affair, with people wondering as to why Nestor Kirchner chose not to stand for re-election, and why it was that Cristina spent much of the campaign abroad and less than willing to participate in debates and unveil concrete policy issues?

So Argentines are yet again left in the dark as to what expect from the future. Whilst the emergence of yet another female as a head of state in Latin America (Michelle Bachelet became the President of Chile last year) in otherwise macho dominated arena can only be a good thing, it still remains unclear as to whether she will be able to do anymore than her husband in redistributing the profits the country seems to be raking in with an annual growth rate of 8%, or be able to anything to dampen the impression of Nestor’s Kirchner’s perceived undermining of democratic processes. And how will she be able to reposition Argentina internationally after Kirchner’s presidency has left Argentina isolated, given his anti-US rhetoric and strong ties with Hugo Chavez’s Venezuela? One thing is for certain, dinner at the Kirchner’s must be quite something if her policies start to deviate considerably from those of her husband’s.