25
iT’s never a good
sign when a country’s
central bank tightens
capital controls just
hours after a national
election. But when
that country is Argen-
tina, it’s not exactly surprising, either.
One in 10 Argentines today can’t
find work. More than one-third are
impoverished. In a country not generally
known for fiscal discipline, reform-
minded President Mauricio Macri had
good intentions to fix the country’s
finances but lacked the political support
to do so. He was eventually forced to
seek a major $57 billion
aid package from the
International Monetary
Fund (IMF), but that was
mismanaged, aggravating
the country’s already dire
economic situation; just 40%
of Argentines voted to re-elect
him. Alberto Fernández—his
leftist opponent, who received
48% of the vote—will replace
him on Dec. 10. He will be
accompanied by his vice-
presidential running mate,
former President Cristina Fernández
de Kirchner (CFK).
When her second presidential term
ended in 2015, CFK was presiding
over a country with rampant political
corruption and an economic situation
pointing seriously south, but one that
had yet to fully develop into a crisis.
She remains beloved by millions for
her generous welfare policies (which
the country was ultimately unable to
afford). Fernández served as CFK’s chief
of the Cabinet of Ministers for her first
seven months in office but was always
considered the more practical politician
of the two. Following CFK’s presidency,
they headed separate wings of their
Peronist movement, refusing even to
talk to each other. Then CFK approached
Fernández with a deal—if he would run
for the country’s presidency, she would
serve as his VP, delivering the votes he
needed to unseat Macri.
It was a bargain Fernández couldn’t
refuse. Now comes the hard part.
Fernández has two distinct challenges
ahead of him; the first is the country’s
looming credit crunch, which if left
unaddressed would lead to its ninth
sovereign- debt default. To avoid that
fate, Fernández has to play ball with the
IMF, an institution widely reviled in
Argentina given its history of demanding
austerity measures in exchange for
financial lifelines, and which Fernández
criticized on the campaign trail. But
Fernández doesn’t have many good
options. Without support from the
IMF, no foreign investors
would touch the country,
especially now as there’s talk
of trimmed repayments—a
so-called haircut—on existing
Argentine bonds. Macri cut
public spending in order to
bring the country’s finances
in line with IMF demands;
Fernández just vowed to
increase public spending.The second concern is the
person who propelled Fernán-
dez to the presidency. CFK, who currently
faces multiple charges of corruption, is
one of the most divisive political figures
in Argentina. While her presence on the
ticket secured the presidency for Fernán-
dez, he underperformed relative to polls,
which may be explained by voters’ wari-
ness of re-electing CFK to a position of
power. (Fernández was also unable to se-
cure a majority in the lower house of par-
liament.) More concerning still, Kirchner
has her own political base and influence
network, which could complicate Fernán-
dez’s ability to govern if he doesn’t manage
the relationship properly.
Fed up with the past four years of
economic struggle, Argentine voters
made their decision. Macri should take
heart—in Argentine politics, there is such
a thing as second chances. It remains to
be seen what Fernández and CFK will do
with theirs. □THE RISK REPORT
Argentina gambles on
all-too-familiar faces
By Ian Bremmer
Kirchner
has her own
political base
and influence
network,
which could
complicate
Fernández’s
ability
to governQUICK TALK
Shuntaro
Furukawa
Nintendo’s sixth
president, Shuntaro
Furukawa, is overseeing a
transformational time for
the 130-year-old company
as it invests in theme parks,
movies and more. His plan:
to get Nintendo’s creations
in front of as many people
as possible.What’s your philosophy
toward creating games
and other products? Giving
our teams the freedom to
experiment with new ideas
is something I strongly
agree with. Expansion can’t
happen without the freedom
to try something new and
the courage to step into
unfamiliar territory.How is Nintendo preparing
for the next generation of
video gaming? Any kind of
new technology, whether
that is going to be appealing
to the consumer or not,
really depends on the
quality of the experience
that we can provide.In expanding to movies,
theme parks and so on,
is Nintendo trying to
emulate Disney? We’ve
never tried to imitate any
other company ... the idea
of using our [intellectual
property] in things like
theme parks or movies is an
extension of the philosophy
we’ve had all along.
—Alex FitzpatrickNintendo
wants new
ways to
profit from
iconic
characters
like Mario