In Argentina's Oil, A Glimpse Of Latin America's Left

Apr 22, 2012
Originally published on April 22, 2012 5:41 pm

Just the arrival of Argentine President Cristina Fernandez de Kirchner prompted supporters in her Peronist movement to break into chants last Monday. The event, choreographed to feel momentous, was at the presidential palace. Fernandez de Kirchner announced plans to expropriate assets of the Spanish oil firm Repsol in Argentina.

Through a window, television viewers could see a huge image of Evita Peron, the famous 1950s-era populist whose presence is deeply felt in today's government.

"Companies that are here with foreign stockholders are Argentine companies," Fernandez de Kirchner said. "Let no one forget that."

The president's plans, likely to be easily approved by Congress this week, delighted the left in her country and were condemned by the Europeans and criticized by the U.S. State Department.

The move also provides a peek at what the left might look like in Latin America, just as Venezuelan President Hugo Chavez and the Castros in Cuba appear to be fading.

Emerging Leaders

For decades, the radical left was embodied in Fidel Castro. His fiery speeches inspired leftists across the region after his 1959 seizure of power.

Then came Chavez, who transformed Venezuela into a Socialist state over 13 years. Now, though, Chavez is stricken with cancer and has faded as he seeks treatments in Cuba.

Castro has been replaced by his brother, Raul, who is five years younger but still 80.

Sooner or later, both Cuba and Venezuela will have new leaders. This means the de facto emergence of another set of leftist populists: Ecuador's Rafael Correa, Bolivia's Evo Morales, Nicaragua's Daniel Ortega and, of course, Fernandez de Kirchner.

These populists are known for intervening in their economies and spending heavily, thanks to a recent bonanza in crop and resource prices.

Money Crunch

At the moment, it's Argentina's expropriation of Repsol affiliate YPF that is getting attention across the region, making Fernandez de Kirchner a champion to some on the left.

"Clearly, YPF is the biggest, most symbolic nationalization that we've seen in Latin America in decades," says Arturo Porzecanski, an economist at American University in Washington.

Fernandez de Kirchner has also used Central Bank funds and a nationalized pension system to shore up finances. Porzecanski says such steps reflect the serious money crunch Argentina faces — and it's not just in Argentina.

"Those countries whose governments have spent all the bonanza and then some are really scrambling for funds," he says. "Whereas other countries that have managed the bonanza more responsibly — whether it's a Colombia or a Peru or a Chile or a Brazil — they're in a much more viable, sustainable position."

Those other countries are either center-left, such as Brazil, or center-right, like Chile. They are all market-friendly and have drawn record levels of foreign investment and diversified their economies — while some of the other countries have begun to decay.

'A Sense Of Stagnation'

Michael Shifter, president of the Inter-American Dialogue in Washington, D.C., says measures such as the YPF takeover or Ecuador's recent efforts to restrict the press are more the exception than the rule. He says they reflect a populist option that is not viable for most countries.

"There's no sense of moving toward fulfilling some alternative vision and some utopian ideal," Shifter says. "There's a sense of stagnation and just trying to hold on to power, which is really not a very attractive leftist project."

He also says that, in the long term, it's just not sustainable.

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RACHEL MARTIN, HOST:

In Argentina, President Christina Fernandez de Kirchner ordered the expropriation of Spanish oil firm Repsol's assets this week. The move delighted the political left in her country, but Kirchner got criticism from Europeans and the United States. It also shed some light on the power of the left in Latin America, just as some radical icons appear to be fading from the scene. NPR's Juan Forero reports.

(SOUNDBITE OF PEOPLE CHANTING)

JUAN FORERO, BYLINE: Just the arrival of Argentine President Cristina Fernandez de Kirchner prompted supporters in her Peronist movement to break into chants. It was last Monday, and the event, choreographed to feel momentous, was at the presidential palace. There was a huge photograph of Evita Peron, the famous 1950s-era populist whose presence is deeply felt in today's government. And then came the announcement:

PRESIDENT CHRISTINA FERNANDEZ DE KIRCHNER: (Spanish spoken)

(SOUNDBITE OF CHEERING)

FORERO: Its appropriation of a majority stake of YPF, the Argentine affiliate of Repsol.

KIRCHNER: (Spanish spoken)

FORERO: Companies that are here with foreign stockholders are Argentine companies, Fernandez de Kirchner said. Let no one forget that. The president's plans, which are likely to be easily approved by Congress this week, come as the political landscape in Latin America is shifting, particularly the radical left. For decades, it was embodied in Fidel Castro.

FIDEL CASTRO: (Spanish spoken)

FORERO: His fiery speeches, like this one posted on YouTube, inspired leftists across the region after his 1959 seizure of power. And then came Hugo Chavez, who over 13 years transformed Venezuela into a Socialist state.

PRESIDENT HUGO CHAVEZ: (Spanish spoken)

FORERO: But now, Chavez is stricken with cancer and has faded as he seeks treatments in Cuba. Fidel Castro has been replaced by his brother, Raul, who is five years younger but still 80. Sooner or later, both Cuba and Venezuela will have new leaders. This means the de facto emergence of another set of leftist populists: Ecuador's Rafael Correa, Bolivia's Evo Morales, Nicaragua's Daniel Ortega and, of course, Fernandez de Kirchner. These populists are known for intervening in their economies and spending heavily, thanks to a recent boom in crop and resource prices. At the moment, though, it's Argentina's expropriation of YPF that is getting attention across the region, making Fernandez de Kirchner a champion to some on the left.

ARTURO PORZECANSKI: Clearly, YPF is the biggest, most symbolic nationalization that we've seen in Latin America in decades.

FORERO: Arturo Porzecanski, an economist at American University in Washington, says the problem is that such steps reflect the serious money crunch Argentina faces. Fernandez de Kirchner has also used Central Bank funds and a nationalized pension system to shore up finances. And it's not just in Argentina, says Porzecanski.

PORZECANSKI: Those countries whose governments have spent all the bonanza and then some are really scrambling for funds. Whereas other countries that have managed the bonanza more responsibly - whether it's a Colombia or a Peru or a Chile or a Brazil - they're in a much more viable, sustainable position.

FORERO: Those other countries are either center-left, such as Brazil, or center-right, like Chile. But they are all market-friendly and have strengthened institutions. As they have drawn record levels of foreign investment and diversified their economies, some of the other countries have begun to decay. Michael Shifter of the Inter-American Dialogue in Washington says measures such as the YPF takeover or Ecuador's recent efforts to restrict the press are more the exception than the rule. And he says they reflect a populist option that is not viable for most countries.

MICHAEL SHIFTER: There's no sense of moving toward fulfilling some alternative vision and some utopia ideal. There's a sense of stagnation and just trying to hold on to power, which is really not a very attractive leftist project.

FORERO: He also says that, in the long term, it's just not sustainable. Juan Forero, NPR News, Bogota, Colombia.

(SOUNDBITE OF MUSIC)

MARTIN: You're listening to NPR News. Transcript provided by NPR, Copyright NPR.