Economy Politics

Meet Axel Kicillof, Buenos Aires province governor-elect

21st November 2019

By Martín Trombetta

Meet Axel Kicillof, Buenos Aires province governor-elect

Buenos Aires province Governor-elect Axel Kicillof was undoubtedly one of the great winners of the October election. Not only did he beat María Eugenia Vidal, who was generally considered the most popular politician in the country until a few months ago, but he did so by a landslide, strongly contributing to Alberto Fernándeztally on the national ballot.

</p> <p>Most political commentators <a href="https://www.eleconomista.com.ar/2019-11-cuando-el-clio-le-gano-al-big-data-quien-es-nacho-ramirez-la-cabeza-detras-de-la-campana-exitosa-de-kicillof/">highlighted</a> his peculiar year-long campaign — for months, Kicillof drove his own personal car to dozens of villages all around Buenos Aires province, visiting public offices and talking to neighbors, a method that seemed at odds with classic Peronist iconography, more prone to overblown speeches in soccer stadiums filled with nothing but their own supporters. But Kicillof showed he could play different styles, not merely appealing to the passion of his base but also addressing a wider crowd.</p> <p>A favorite of Cristina Fernández de Kirchner, the former Economy minister will now be holding the second biggest executive position in the country. So who is this rising star in Argentine politics, and what could his tenure bring?</p> <h2><strong>A controversial scholar</strong></h2> <p>Axel Kicillof (48) graduated in Economics from the University of Buenos Aires (UBA), where he later made it to a PhD. His academic background is impressive to say the least — Kicillof has taught Economics in several universities (including his alma mater) and worked as a researcher ever since graduation. In 2010, he entered the National Scientific and Technical Research Council (CONICET), where he is currently on leave due to his political career.</p> <p>Kicillof was not just a successful academic, he was also a quite unconventional one. His controversial PhD dissertation, presented in 2005, argued for a reinterpretation of John Maynard Keynes’ work — according to Kicillof, the famous English economist should be considered an intellectual heir of none other than Karl Marx, a view that scandalized more than a few of his colleagues, both liberals and Keynesians.</p> <p>But Kicillof also had an important role in Argentine university politics, as a leader of the left-wing political group TNT. University politics were on the national news by the end of 2001, when corruption allegations ousted Franja Morada, the grass roots student group allied with then president <a href="https://gettheessential.com/politics/2019/07/18/mauricio-macri-fernando-de-la-rua-structural-reforms-imf-financial-crisis-argentina-2001">Fernando De La Rua</a>. Some might even say such allegations contributed to weaken the president himself, who resigned later that year amid a historical economic and political crisis. Guess who Franja Morada’s main rival at the time was: that’s right, a young Axel Kicillof.</p> <p>His role as both professor and political leader earned Kicillof great respect among UBA students. To this day, many graduates remember his heated conferences on topics that included the Argentine economy, the economics curricula, the 2008 financial crisis, and, of course, Keynes’ legacy. Conference rooms were seldom short of stuffed when Kicillof was on the microphone. His credentials might have been easily summarized in a simpler idea: he was a rockstar.</p> <h2><strong>Cristina’s economist</strong></h2> <p>In 2011, Kicillof joined Cristina Fernández de Kirchner’s camp through his academic connections with Kirchnerite youth group <em>La Cámpora</em>. He soon became one of the most influential figures within her government, appointed as a manager in Aerolíneas Argentinas (the national state-owned airline) and as the representative of the State in the directory of Siderar (the largest steel producer of the country). But his leap to the main stage came in 2013, when he was named Economy Minister.</p> <p>His tenure would not be easy, as the Argentine economy was already in quite bad shape, struggling with high inflation, pressure on its exchange rate stemming from stringent <a href="https://gettheessential.com/economy/2019/09/05/macri-re-imposes-ban-on-dollar-purchases-as-crisis-reaches-banks-currency-controls-argentina-cepo-clamp">capital controls</a>, and a technical default on sovereign debt caused by a ruling from US Justice Thomas Griesa in a case against holdout bondholders who rejected the country’s 2005 debt restructuring.</p> <p>Kicillof propelled strongly expansive economic policies, including subsidized credits for consumption and housing programs, as well as cash transfers for disadvantaged college students. To fight inflation, he implemented a broad price control scheme named <em>Precios Cuidados.</em></p> <h2><strong>Unimpressive results</strong></h2> <p>Results were certainly unimpressive: gross domestic product growth was virtually zero during his two-year tenure and inflation was the highest in a decade. By 2015, the Argentine economy had only worsened. Foreign reserves nearly vanished from the Central Bank, and black markets flourished, with the peso-to-the-dollar rate trading 50 percent higher in the streets <a href="https://gettheessential.com/economy/2019/09/12/infographic-the-return-of-the-exchange-rate-gap">when compared</a> to the official but less accessible price, as importers struggled to get permission from authorities to buy goods at the legal rates.</p> <p>But that was not all. Kicillof could not solve the legal battle with the holdouts, and lost <a href="https://gettheessential.com/economy/2019/06/20/international-lawsuits-continue-to-mount-against-argentina">another expensive feud</a> – this time with the Spanish multinational Repsol, regarding the expropriation of Yacimientos Petrolíferos Fiscales (YPF), which ended up costing the Argentine State more than the company’s value. Kicillof also disappointed his left-wing supporters by suspending official poverty measurements, discredited by price index manipulations in the INDEC statistics bureau, another long-time issue in the Kirchnerite government that Kicillof couldn’t solve, despite initially attempting a re-launch.</p> <p>Few economists would deem his tenure successful. However, while his achievements as Minister might be unappealing, Kicillof shined as a leader of the opposition, attacking Macri’s reforms from day one and predicting the worst would come out of them. With Argentina spiraling deeper into crisis, his arguments grew increasingly convincing.</p> <p>Argentine heterodox economists still consider Kicillof a trailblazer, and some might even go as far as seeing him as a modern ideologue of late Kirchnerism. In a way, it could be argued that Kicillof succeeded by combining his two great talents: economic theory and politics.</p> <h2><strong>What next</strong></h2> <p>After a four-year term as congressman, Kicillof will become the governor of the largest Argentine province. Home to 40% of the national population, hampered by high poverty rates and fiscal discrimination (as the allocation of federal fiscal funds is notoriously unfair towards the province), Buenos Aires has historically proven a daunting challenge. Some even speak about a curse: former Buenos Aires governors have never won a presidential election in Argentine history. The reason is no mystery: being in charge of a province where social demands are so hard to meet is a sure way to undermine even the most talented politician’s popularity.</p> <p>What is more worrisome for Kicillof is that it might not even be up to him. If President Fernandez fails to provide quick and effective solutions for Argentina’s economic problems, the social situation will only get worse and, in such a context, there is not so much a governor can do to improve life conditions in its province.</p> <p>Some of <a href="https://gettheessential.com/economy/2019/05/23/infographic-alberto-fernandezs-economic-advisers">Fernandez’ economists</a> might be deemed followers of Kicillof’s ideas. Up to a point, this might mean that if heterodox policies succeed this time, he will take some of the credit. Does this also mean that he will be to blame if they fail, as though he was still the economy minister? Only time will tell. But one thing is certain: Governor Kicillof will be in for a bumpy ride.</p> <p>

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Martín Trombetta

Martin Trombetta holds a PhD in Economics from Universidad Nacional de La Plata, a research grant at the CONICET institute, and teaches at the Universidad Argentina de la Empresa (UADE). His publications have focused on labor markets, income mobility, gender gaps and other topics.