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Argentina's Vice President Cristina Fernandez de Kirchner holds a party rally
What We’re Watching: Argentina VP’s guilty verdict, NY goes after Trump, a Sudanese agreement, sex ban in Indonesia
Argentine VP guilty of corruption
In a verdict sure to deepen divides in an already highly polarized country, an Argentine court on Tuesday found Vice President Cristina Fernández de Kirchner guilty of a billion-dollar graft scheme from during her 2007-2015 presidency. She has been sentenced to six years and banned from holding public office. It’s the first time a sitting Argentine Veep has been convicted of a crime. Kirchner – a formidable populist who is as despised by the right as she is loved by the left – has denounced the verdict as part of a political witch hunt by the media and the courts. The case has already prompted numerous street clashes between Kirchner’s supporters and opponents — at one of them, a man tried to kill her (the gun jammed). The big intrigue now? Kirchner has legal immunity since she is currently vice president, and she’s already pledged to appeal the verdict all the way to the Supreme Court. But a final decision from there is unlikely to come down before next year’s general elections, when she may just run either for Senate or, gasp, for president. Whatever the outcome, Kirchner’s fate will throw more gas on the raging fire of Argentine politics over the next year.
Trump Org convicted in Gotham
On Tuesday, Donald Trump’s real estate empire was found guilty of tax fraud and other financial crimes in State Supreme Court in Manhattan, a victory for the Manhattan district attorney who has long sought to nail the former president for alleged illegal business practices. The Trump Organization was found guilty on all 17 counts, including charges that the company doled out expensive gifts to top execs who failed to pay taxes on them. The case was more or less locked after Allen Weisselberg, the organization’s former chief financial officer and a longtime Trump buddy, flipped for the prosecution in August in exchange for a significantly reduced jail sentence. Importantly, Trump himself was not indicted in this case, though the prosecutor made several references to his alleged involvement in the scheme. Still, he isn’t out of the woods as he’s facing a slew of criminal investigations in other states as well as the ongoing Jan. 6 investigation. Though this outcome is damning for Trump, it’s unlikely to have much impact on voters ahead of 2024 because most Americans have dug in their heels on the Trump issue, one way or another.
A breakthrough in Sudan?
On Monday, Sudan’s military signed an agreement with an alliance of democracy groups to begin a process of transition toward civilian rule in this deeply unstable country. The deal has its skeptics – and for good reason. In 2019, protesters forced long-time dictator Omar al-Bashir from power in hopes of ending three decades of tyranny and corruption. The military quickly stepped into the resulting power vacuum, and advocates for democracy were then forced to negotiate with its leaders, who were closely aligned with the former despot. Expectations of a democratic transition were quashed in October 2021, when the army launched a coup to seize power. Many protesters were brutalized and jailed. This week, the generals appear to have done an about-face. This latest agreement may signal the military’s genuine, if reluctant, acceptance that order can’t be restored in Sudan without true power-sharing, in part because international donors and lenders have turned their backs on the regime. Those who shook hands with the generals this week argue that compromise is the only way to end political violence and give Sudan a chance at democracy and normalcy. But other pro-democracy groups have rejected the agreement. They insist the military can never be trusted to finally make way for civilian democratic rule. Time will tell who’s right.
Not married? Then no sex in Indonesia
Indonesia's parliament on Tuesday approved an overhaul of the colonial-era criminal code — including a ban on extramarital sex. Anyone convicted of the offense will now face up to one year behind bars, and the law will also apply to foreigners visiting the country. While some human rights activists warned that the law could be used to target members of the LGBTQ community, others hailed the fact that legislators removed an article making gay sex illegal. Still, the move signals that the country with the world's largest Muslim population is slowly moving away from the religious tolerance its leaders have long championed to become more like Aceh, a province in the country's north ruled by Islamists who enforce shariah law. Interestingly, the law was passed just weeks after President Joko Widodo won international praise for hosting a successful G-20 summit in party-loving Bali, a haven for unruly tourists, many of whom are unmarried and presumably like to have sex. Jokowi, as he's popularly known, was considered a moderate when he swept to power in 2014, but in recent years he's developed an authoritarian streak and gotten cozy with Muslim conservatives. And what about ordinary Indonesians? Don't be surprised if they come out in droves to protest — as they did in 2019 over an earlier draft of the same law that forced Jokowi to rethink the ban.Argentina fan celebrates after the World Cup match against Mexico.
World Cup heats up Argentina’s presidential race
When Argentina faces Poland in their do-or-die last group stage match on Wednesday, one thing will be missing at the stadium in Qatar: Argentine politicians.
In the soccer-crazy South American nation, políticos rarely watch the Albiceleste, in person to avoid getting blamed for a loss. Former President Mauricio Macri didn’t get the memo, as he attended — in his new FIFA gig — Argentina’s shocking loss to Saudi Arabia last week. Almost on cue, fans responded by launching an online petition for Macri and his bad juju to stay as far away as possible from GOAT Leo Messi and his crew.
But the brouhaha over Macri is part of a bigger story: The former president has hinted he might want to get his old job back in next year’s election.
Less than a year out from the vote, these are turbulent times in Argentina. Ordinary people are struggling to make ends meet and to figure out how much basic items will actually cost each day, with inflation expected to reach 100% by the end of the year.
The government has thrown the kitchen sink at the problem, but neither IMF austerity to restore confidence in the peso nor direct intervention through price controls have worked to tame runaway inflation. COVID also did a lot of damage, and, to be fair, Argentina’s economic disaster is a legacy of decades of mismanagement, spending beyond its means, and stiffing creditors.
What’s more, no one knows who’ll run in the end. If the center-right Macri throws his hat in the ring, he’ll probably face either deeply unpopular President Alberto Fernández or frenemy VP Cristina Fernández de Kirchner (no relation), who held the top job from 2007-2015. Both are from the traditional left — especially Cristina, whom Argentines refer to by her first name.
A face-off between candidates like this would be deeply polarizing for a country that has swung back and forth on the ideological spectrum twice in the past decade. Macri — who’s not a shoo-in for the nomination if he runs — is as loved by his supporters and hated by his critics as Cristina is.
The feisty vice president is currently under indictment for corruption, but Cristina will probably never see the inside of a prison cell even if she’s convicted. And she demonstrated that she still owns the streets after surviving a recent assassination attempt.
There's also a domestic soccer angle with Macri. The former president got into politics after winning many trophies as president of Boca Juniors, whose supporters call themselves La mitad más uno (Half plus one) as the most popular team in Buenos Aires and all of Argentina.
You’d think that Boca fans would be all in for the man that led the team to so much success — yet most xeneizes are working-class people who’ve historically voted left and won’t cheer for a rich businessman like Macri. Perhaps that’s why the ex-president has, until now, favored Patricia Bullrich, his popular tough-on-crime former security minister.
Whoever leads the opposition ticket is favored to win. A recent poll shows that two-thirds of Argentinians want the ruling Peronista coalition out of power. That’s consistent with a broader trend in the region: For nearly a decade now, Latin Americans have been consistently voting out incumbents, regardless of their ideology.
One rising presidential hopeful is upstart Javier Milei, an eccentric libertarian economist and TV personality who claims not to have brushed his hair since he was 13. The independent Milei, who’s making waves with populist gimmicks like auctioning off his paycheck, would need strong party backing to go all the way, but his early surge tells you a lot about where Argentine voters’ heads are right now.
One thing is clear — the current president is toast. "Even if Argentina wins the World Cup, it is almost certain that Fernández would lose the election," says Eurasia Group analyst Luciano Sigalov. "Whatever politicians like to say, there is no evidence of a relationship between success in sport and politics."
Thought bubble: Although Macri's approval ratings had already started to drop before the 2018 World Cup in Russia, his numbers really began to tank soon after Argentina was eliminated due to the president’s own economic blunders. He never recovered and lost his re-election bid to Fernández.
It sure looks like the incumbent will meet the same fate as his predecessor — if Fernández runs at all.
Supporters gather in front of the house of Argentina's Vice-President Cristina Fernandez de Kirchner after she was attacked in Buenos Aires, Argentina.
What We’re Watching: Argentine VP assassination attempt, Ethiopian escalation, Zaporizhzhia tour
Argentine VP survives assassination attempt
Argentina's influential VP Cristina Fernández de Kirchner survived an assassination attempt on Thursday night outside her residence in Buenos Aires. A gunman took aim from close range, but his loaded weapon failed to fire. Cops then arrested the man, a Brazilian national with a history of following hate groups on social media. We don’t know the motive and political violence in the country rarely gets bloody, but political tensions have been running very high since last week, when a prosecutor asked for the far-left firebrand VP and former president to be sentenced to 12 years in prison for corruption. Still, her trial will be anything but swift, and Cristina — as she’s universally known — is unlikely to go to jail for charges she calls a "witch hunt." President Alberto Fernández (no relation, nor a big fan of the VP) declared a national holiday on Friday, which the conservative opposition decried as a gambit to turn out crowds in favor of Cristina.
Eritrea jumps back into Ethiopia’s civil war
Eritrean troops have joined Ethiopian government forces in a fresh attack on the Tigray region, according to the Tigray People’s Liberation Front. If confirmed independently, this would represent a major (re)escalation in the nearly two-year-long conflict between the Ethiopian government and Tigray militants who are seeking greater autonomy. Last year, Ethiopian PM Abiy Ahmed admitted Eritrean involvement in the war, after initially denying it. Until the resumption of fighting last week, the front had been largely quiet for months under a tenuous humanitarian truce, and diplomats were working to broker a more durable peace. That path looks closed now as both sides gear up for a full-fledged fight again. The war has already led to a humanitarian catastrophe in Tigray that is spilling into neighboring Sudan, and the UN has accused both sides of grave human rights violations and war crimes.
UN nuclear inspectors assess Zaporizhzhia damage
Arriving hours later than expected, a team of International Atomic Energy Agency inspectors on Thursday visited the Russian-held Zaporizhzhia nuclear power plant in southeastern Ukraine. After touring the facility for the first time, IAEA chief Rafael Grossi tweeted an on-site video vowing to set up shop there. But the last leg of the trip was almost derailed by heavy shelling, which Kyiv and Moscow blamed on each other. The Ukrainians say Russian artillery fire forced them to briefly shut down one of the reactors, while the Russians claim that the Ukrainians tried — and failed — to use the visit as cover for an assault to retake the site. Zaporizhzhia, Europe's largest nuclear power plant, seemed on the brink of disaster after six months of intense fighting near the perimeter, overworked staff, and likely damage to the facility. But the odds of another Chernobyl have now been reduced by the presence of the IAEA team — as long as Russia, keeps its word and lets the foreign scientists stay.
A person wears a cap with images of Argentina's President Alberto Fernández and VP Cristina Fernández de Kirchner.
What We’re Watching: Argentine VP’s legal woes, angry Haitians, Pakistan’s Qatari cash push, Trump’s DOJ suit
Is Argentina's VP on the ropes?
An Argentine prosecutor wants VP Cristina Fernández de Kirchner to spend 12 years behind bars and be disqualified from public office for life for alleged corruption from when her husband was president (2003-2007) and her own two terms in the top job (2007-2015). Cristina — popularly known by her first name — is accused of fixing public works contracts in the southern Patagonia region. The verdict drops in December, but it can be appealed and the process would likely drag on until late 2023 — just in time for the next election. Even if she's convicted, the influential VP is unlikely to see a jail cell. Although she won't have immunity if she loses her Senate seat, the Supreme Court is unlikely to ratify a guilty sentence that would be a political bomb. Still, the trial will have big implications for Cristina and the ruling Peronistas. First, a conviction might compel her to shape the 2023 presidential race by picking a loyal candidate and not the incumbent, Alberto Fernández (no relation), whom Cristina famously doesn't get along with. Second, the legal troubles might help Cristina fire up her base, especially if she decides to run for president. "She views all of this as a conspiracy between the judiciary, businessmen, and the opposition to remove her," says Eurasia Group analyst Luciano Sigalov.
Haitians demand PM’s resignation
Ça suffit! So say thousands of demonstrators in Port-au-Prince. Fed up with sky-high inflation, deepening poverty, and the spread of deadly gang violence, protesters are taking to the streets of Haiti’s capital to demand the resignation of PM and acting President Ariel Henry. Kidnappings and murder are on the rise — more than 200 were killed in just 10 days last month — and Haitians are increasingly worried about their mere survival. Henry has been in power since the assassination of President Jovenel Moïse in July 2021, and many suspect that Henry was somehow behind the hit. At least one protester has reportedly died in this week’s demonstrations, and things could quickly grow worse. Some 50% of Haitians are living in poverty, struggling to keep up with inflation upwards of 30%, and saying: enough is enough.
Pakistani PM in Qatar, hat in hand
What would you do if you were staring down the barrel of default and your sworn enemy – who you’re trying to send to jail – was threatening mass unrest? Get out of Dodge, ask for money, and hope the political drama boils over before you return. That's what embattled Pakistani PM Shebhaz Sharif likely hopes to accomplish this week during his visit to Qatar. In Doha, Sharif will offer deals for Qatar to buy shares in Pakistani state-owned businesses like the national airline and — checks notes — the Roosevelt Hotel in New York City, as well as opportunities to sell Pakistan more energy. More importantly, Sharif's trip comes ahead of next week's big meeting to secure a $1.2 billion IMF bailout negotiated in 2019 by ... his predecessor Imran Khan, Sharif's other big headache. Khan, who was ousted in an April no-confidence vote, has been charged with violating the anti-terror act for threatening the judiciary in a fiery speech. The former PM has been summoned to appear before the court to answer the charge on Aug. 31, and Khan's supporters have responded by surrounding his residence to thwart his potential arrest. If the former cricket star is convicted, he faces a prison term and lifetime disqualification from politics.
Trump sues DOJ over Mar-a-Lago search
Donald Trump is suing the Justice Department in a bid to stop the FBI from looking over documents taken from the former US president’s Mar-a-Lago home earlier this month. The materials were recovered as part of an investigation into whether Trump mishandled them — but he says he’s done nothing wrong and that the documents were declassified. The lawsuit requests that an independent lawyer review the documents to see whether any are protected by executive privilege. Since Trump is a likely presidential candidate for 2024, the suit warns that law enforcement “cannot be used as a weapon for political purposes." DOJ officials say that the search warrant was authorized by a federal court “upon the required finding of probable cause,” and they’ll get their chance to address the lawsuit in court. Meanwhile, the judge who approved the search warrant is still deciding whether to allow the evidence presented as justification for the search to go public.Argentina's VP Cristina Fernández de Kirchner waves at supporters next to President Alberto Fernández at the closing campaign rally before the 2021 midterm elections in Buenos Aires.
War of the Fernandezes in Argentina
Argentina's leftwing government is led by two people named Fernández: President Alberto Fernández and his vice president, the almost equally powerful former President Cristina Fernández de Kirchner.
The two have always been odd bedfellows, and often clash over policy. But lately their disagreements have reached fever pitch, fueling rumors of a split that could hurt the president's reelection odds next year amid a worsening economic crisis: sky-high inflation, a plummeting peso, capital controls, and Argentina's usual piling debt.
Why don't the president and the VP get along, and what does that mean for Argentina's political future? We get some clarity from Eurasia Group's Daniel Kerner and Luciano Sigalov.
Why was the recent resignation of the economy minister such a big deal?
Fernández had no plan to replace now-former Economy Minister Martin Guzmán when he resigned on 2 July via Twitter, while Cristina — popularly known by her first name in Argentina — was delivering a speech.
Guzmán was one of the president's closest advisers and one of the few officials that still stood with him despite increasing pressures to resign from Cristina and her group. Fernández struggled to find a replacement because nobody wanted to take the post unless guaranteed a strong political backing to conduct needed adjustments, and this, of course, was absent.
Just a few weeks before, Economic Development Minister Matías Kulfas also left the cabinet due to infighting with the VP.
Why have tensions been mounting between the president and the VP?
Cristina has been very critical of the $44 billion debt restructuring deal with the IMF signed earlier this year, arguing that Guzman didn’t negotiate hard enough with the IMF as former President Mauricio Macri did in 2018.
In parallel, she resents Fernández and Guzmán for spending cuts mandated by the IMF that in her view led to the Peronistas losing big in last November's midterm elections. On top of this, Cristina thinks that the president and Guzmán have not been tough enough on the private sector to curb rising inflation and protect dwindling US dollar reserves.
Fernandez's attempts to rebut these criticisms have always resulted in more attacks from Cristina and her allies, generating a vicious cycle of ever-escalating attacks within the ruling coalition. Overall, the VP believes the government should borrow and spend more to boost support for the administration, which is risky given high inflation and lack of resources.
Who’s really calling the shots?
Nobody, and that's the problem. Cristina is by far the most influential figure in the ruling coalition, where she has de-facto veto power. A two-time president (2007-2015), she captained the creation of the Everybody’s Front, and it was her idea to field Fernández against Macri in the 2019 presidential election. But she avoids taking responsibility for policy, so we have a government with no plan and driven mostly by inertia.
Who do you think will prevail in the long run?
Tensions will remain high, and likely unresolved. Fernández is unlikely to resign, as he wants to finish his term, while Cristina doesn't want to cause an even deeper crisis if she becomes president. At this point, it's evident that Cristina is the most relevant stakeholder of the ruling coalition and always ultimately prevails. Therefore, she will become more active in the coming months as she tries to influence policy-making and shape who runs for president in 2023.
What is the outlook for the IMF program?
Guzman's replacement, Silvina Batakis, sent a signal of moderation by reaffirming the government's commitment to the IMF agreement, in an effort to play down the perception that she would cave to pressure from Cristina to drive policy into further interventionism. But this was not enough to calm foreign exchange and local debt markets. For the moment, a full renegotiation of the IMF program looks unlikely, though there might be talks to alter some points of the program (Batakis is meeting IMF officials for the first time on Monday). While Cristina is unlikely to push for a quick break, she will resist adjustments — especially as the presidential race approaches, increasing the likelihood that targets won’t be met. In this scenario of a heightened political crisis and weak economic leadership, going into arrears with the IMF will depend much more on the IMF’s flexibility than on how Argentina implements the deal.
How will the split affect next year's election?
Cristina wants to decide who the candidates will be — of course not Fernández, despite his intention to run for re-election. She will be more active in the coming months as she will attempt to shape the ticket, but there are no seriously competitive Peronista candidates. Also, the VP might think twice before settling on a candidate to avoid repeating her mistake of picking a “traitor” in Fernández.
If Macri, who is as polarizing a figure for the left as Cristina is for the right, decides to run, she could feel compelled to compete herself. Nonetheless, Macri’s candidacy could intensify divisions within the opposition coalition Together for Change.
Overall, the administration’s troubles will benefit the opposition. But the real wildcard is growing discontent with the political class as a whole.
Activists demonstrate with a cardboard depicting late President Juan Domingo Peron and Maria Eva Duarte Peron, as Argentines demonstrate in support of Fernandez's administration as they celebrate the Loyalty Day, which commemorates the massive mobilization by supporters of Peron to demand his release after he was imprisoned, in 1945, in Buenos Aires, Argentina October 17, 2021.
The end of Peronismo in Argentina?
Argentina is famous for tango, literary greats like Jorge Luis Borges, and for producing (arguably) the world's two best soccer players of all time in Diego Maradona and Leo Messi. It's the third-largest economy in Latin America, and a global agricultural powerhouse.
Unfortunately, the country is also known for chronic political instability and has long been tagged an economic basket case — the direct result of successive populist governments spending beyond their means, and getting others to foot the bill for their mismanagement.
Messy politics and economic emergencies are all too common in Argentina. But after Sunday's midterm elections, Argentines can expect an especially rocky next two years.
The power brokers now have their backs to the wall. Argentina's ruling coalition, led by the Peronista party — named for nationalist, populist former president Juan Perón — has lost control of both houses of parliament for the first time since the restoration of democracy almost 40 years ago.
Even when the pro-business Mauricio Macri served as president (2015-2019), the Peronistas dominated the legislature, preventing his government from passing most laws they didn't want. Without his parliamentary cushion, Peronist President Alberto Fernández will now face a steep uphill battle in the second half of his four-year term.
This defeat comes at the worst possible time for the already-embattled Fernández. After COVID hit Argentina and its economy hard in 2020, annual inflation rose. It's now hovering above 50 percent despite the government's decision to cap the cost of 1,432 different products. The value of the peso has plummeted against the US dollar in 2021. Four out of 10 Argentines now live in poverty, up five percentage points from the day Fernández took power in December 2019.
Argentines have flooded the streets many times in recent months to protest one of the world's longest pandemic lockdowns. Fernández can expect more such public anger as economic conditions worsen.
The president also has problems within his political family. After the Peronistas were defeated two months ago in the midterm primaries, a dry run for Sunday's election, his powerful VP Cristina Fernández de Kirchner (no relation) forced him to reshuffle the cabinet. Expect the two to fight even more from now on.
But the former president, Argentina's best-known Peronista, is in an awkward position of her own. Many believe she pulls the president's strings and can mobilize large-scale street protests in Buenos Aires. But Fernández de Kirchner also knows that forcing Fernández to step down to advance her own political comeback is risky because Argentines haven't forgotten the corruption scandals that plagued her presidential reign.
The broader question is what will happen in Argentina when the Peronistas can no longer dictate laws. The opposition has long claimed that Peronist big-spending policies have led to crisis-provoking levels of debt, inviting intervention by the deeply resented International Monetary Fund. It's an open secret that Fernández might stiff the IMF on $19 billion due in March 2022, but the opposition could now make him negotiate a compromise against his will.
The consequences of an IMF default, which would be Argentina's third in 20 years, could be catastrophic for the economy. International credit would dry up, possibly provoking a run on local banks similar to the Corralito crisis in the early 2000s, one of the country's worst financial meltdowns ever.
Bottom line: the Peronist stranglehold on Argentine lawmaking has been broken. Argentine voters have made clear what they don't want. They now have two years to decide what they do before heading to the polls to elect a president in 2023.