The death of former Argentine President Nestor Kirchner will most likely make it difficult for current President Cristina Fernández -- his widow -- to govern, and may speed up Argentina's reluctant insertion into the global economy.

Judging from my interviews with the late president, the current president and several of their closest advisers in recent years, Nestor Kirchner pretty much ran the government until the day of his death.

He was the harsh Peronist party leader who maintained union leaders under government control through a mix of intimidation and economic rewards. And he was behind virtually all of his wife's government decisions.

A former top aide to Fernandez told me recently that when she was inaugurated in late 2007, she decided -- apparently with her husband's green light -- to leave her personal mark on government, and not to make it a mere continuation of Kirchner's 2003-2007 rule.

But two crises at the beginning of her presidency -- a rural strike against government export taxes and the disclosure of FBI tapes suggesting that a suitcase with nearly $800,000 in cash smuggled by a Venezuelan government delegation had gone to her presidential campaign coffers -- moved her to rely increasingly on her husband, the former official said.

"She used to tell us that she couldn't even trust us, her closest aides, and that the only one who was truly on her side was Nestor," the former official said. "From then on, her personal initiatives were increasingly overshadowed by Nestor's priorities."

Another former close aide to the president, former chief of staff Alberto Fernández, confirmed to me that "it is true that the rural strike was a tremendous blow to Cristina, and that from then on the government tended to close itself up and turn inwards."

Without her husband at her side, it is unclear how effectively Fernández will be able to maintain social peace, and whether she will have to anticipate the 2011 presidential elections. Making things worse, virtually all economists agree that Argentina's strong economic growth this year will slow down substantially next year.

What will change in Argentina following the former president's death? In the not so distant future, Argentina's government is likely to become less isolationist, and more fully aware that it's not in its best interest to continue antagonizing domestic and foreign investors, the media and other branches of government.

The "presidential couple" -- as the Kirchners are known in Argentina -- has benefited from an economic bonanza thanks to high world commodity prices and low international interest rates, but may have wasted Argentina's biggest opportunity in nearly a century to invest in strengthening democratic institutions, education, innovation and attracting investments that would have set the stage for the country's long-term growth.

When I interviewed Kirchner last in 2004, he struck me as an over-confident leader, who unlike his counterparts in neighboring countries, was little interested in what was happening in the rest of the world. During the interview and in a later conversation, he constantly blamed others -- the United States, world financial institutions and Argentina's previous governments -- for all of his country's problems. After more than an hour of listening to him, I humbly suggested that the countries that grow and reduce poverty more successfully -- whether Chile in South America or China and India in Asia -- are the ones that don't change their economic policies with every new government, attract investments and become more competitive in the global economy. He didn't seem to listen.

He interrupted me, and restarted his discourse about how the free market policies of Argentina's previous government and world financial institutions had led to Argentina's 2001 financial debacle.

The former president made no bones of his lack of interest in foreign affairs. One of his former foreign ministers once told me that "meeting with foreign leaders bores him. It's the part of his job he likes the least. His one and only priority is to get Argentina out of poverty."

During his presidency, Kirchner was reported to have stood up, among others, former Russian President Vladimir Putin and former Hewlett Packard CEO Carly Fiorina, who according to The Financial Times, left the presidential palace after waiting for her scheduled meeting with the president for 45 minutes. Fiorina left for Chile and Brazil, where she received a red-carpet welcome by both countries' presidents.

My opinion: President Fernández not only deserves sympathy following her husband's death, but also political support to help her successfully finish her term. After that, I wouldn't be surprised if Argentina becomes a less inward looking country.

All major contenders for the 2011 elections -- Kirchner-backed Buenos Aires Gov. Daniel Scioli and dissident Peronist leader and former President Eduardo Duhalde among them -- are privately or publicly vowing to get Argentina out of its isolationist mindset. Nestor Kirchhner's death may mark the end of an era.

 

Available at Amazon.com:

The Great Gamble

At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes

 

 

(C) 2010 Andres Oppenheimer