“Cristina K” Looks Like A Lock To Win Argentina’s Election. Then What?

Analysis: Cristina Fernández de Kirchner is heavily favored to win a second term in this Sunday’s presidential election in Argentina. But even though she’ll have a mandate to govern from the left, the recently-widowed president could end up shifting to th

Fernández de Kirchner on the campaign trail
Fernández de Kirchner on the campaign trail
Rodrigo Lara Serrano

"Cristina doesn't have to thank anyone else for the votes she's going to get." Ricardo Rouvier says this with the matter-of-fact tone of a zoologist discussing the population numbers of a particular species.

What the well-known pollster means is that in Argentina, people can no longer say that President Cristina Fernández de Kirchner will be reelected just because she's lucky; or because of her marriage to Néstor Kirchner, a former president who died of a heart attack last year; or because she's now a widow and people feel sorry for her. No, the 50% of the votes she earned in the recent primary come from her own political base, one she's built up since 2008 from practically nothing.

At this point, the analysts – even those politically opposed to the president – all agree: Fernández de Kirchner will win the upcoming Oct. 23 election and thus stay on in the Casa Rosada, Argentina's presidential palace, for another four years. What isn't clear is if things will remain as they are now, or whether Cristina will try to extend her influence and economic model beyond 2015 by taking more aggressive measures and by surrounding herself with young followers. Also unclear is whether her next term will see the rise of a viable opposition?

Even though efforts to predict Argentina's political future is like trying read smoke, there's a good chance that the answer to both questions will be "yes."

After she wins, "Cristina will really change her cabinet for the first time," says Roberto Bacman, an Argentine political scientist. "There are going to be a lot of young people." Evidence of this, according to Bacman, is the preferential treatment Fernández de Kirchner has shown to Amado Boudou, the 47-year-old minister of the economy who is now set to be vice president. Boudou often appears at public events with his electric guitar in hand. And he really can play!

The future vice president doesn't just appeal to rocker types. It's said that he also leads a group of between 100 and 200 officials from various government bodies. Some belong to "La Gran MaKro," a heterogeneous group of economists determined to push through major reforms.

Another group of young people jockeying for influence is "La Cámpora," a center-left political organization with Peronist leanings. The opposition regularly accuses "La Cámpora" of exerting undue sway over the lower house of Congress. In many ways, it operates as the de facto youth branch of "Kirchnerism," and some of its members already hold important government posts.

Elbowing out the unions

Over the past year, President Fernández de Kirchner "has seen a significant increase in her political power," says Graciela Romer of the consulting firm Romer & Asociados. Yet so far, according to the consultant, she's done little of substance with that newfound political clout.

That could change after the election, when the president will have an opportunity to move onto "a higher stage of Kirchnerism," says Romer. During this next phase, Fernández de Kirchner could make some major shifts as far as how decisions are made, giving unions less say in policy and "pushing for higher fees for heavily subsidized public services."

Along with the unions, the groups that stand to lose the most from Fernández de Kirchner's reelection are the various opposition parties. Fragmented and caught up in internal squabbles, the only opposition leaders who seem to have survived the recent debacle are Hermes Binner, of the Socialist Party, and Mauricio Macri, the center-right mayor of Buenos Aires.

Binner is likely to finish second in the election, with between 15% and 20% of the vote. Macri, a former businessman, is currently in his second term as head of Argentina's capital and largest city. Both face the difficult task of turning their respective parties into national players.

One possibility is that Binner and Fernández de Kirchner, who both represent the center-left, could gather up to 75% of the vote between them. That could, in effect, isolate the political right to a degree that it has little say in national politics at all. But it could also push "Cristinismo," as Fernández de Kirchner's particular brand of politics has also been dubbed, more toward the center.

"In a party system, political bodies are defined vis-à-vis their opposition to each other," says Romer. "Crisitina, therefore, could preside over a center-left Peronism that is more populist and that will compete with the socialists on the left and liberals on the right. Cristina could end up occupying the political center."

How that plays out in terms of economic policy remains to be seen. Given her track record, many analysts expect to see "a large state presence, more government control, a total review of privatizations and concessions, and many more public works projects," Bacman explains.

But that may not necessarily be the case. Why? External limitations. A key to understanding Argentina's various crises over the past century is the so-called "stop and go" pattern. Time and again, export prices stagnated while imports rose. The trade balance deficit, in turn, increased external debt, forcing the government to eventually devalue the currency. All of this was further complicated by capital flight.

Fernández de Kirchner will do what she must to avoid exactly such a scenario. That could mean imposing unpopular and controversial measures. The risk is that she could end up angering her political base. Then again, if anyone can get away with changing the script like that, it'd be Fernández de Kirchner. "What Crisitina has," one of her young supporters explains, "is mystique."

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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