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Do Corruption Scandals Hit Harder When the Economy is in Trouble?

She said 40 percent of the electorate are currently undecided about their vote.

By | [email protected] | September 24, 2018 1:25pm

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As the founding director and partner at Management & Fit – one of the largest political and economic consultants in the country – Mariel Fornoni has access to first hand information about the impression people have of politicians, the state of the economy and the future of the country, among others. It makes sense, her company produces it.

In her office in Retiro, The Bubble talked with Fornoni to get her insight on the impact the main issues currently dominating the Argentine political conversation have, as the country gets closer to the 2019 presidential elections.

Fornoni indicated that by mid September, 60 percent of Argentines were concerned about the economy. When asked if crime – ever present among Argentines’ top concerns – has been relegated by the recent economic trouble and corruption scandals that have dominated the news cycle for the better part of the year, she said it has not.

“Sometimes it’s even above inflation as a concern, but if you add unemployment, hikes in utilities and transportation fares and so on, people are more concerned about the economy than crime. At the same time, although it is always present, it does not play a relevant role in tipping the scale at the time of an election,” she said.

Despite the notable meltdown that the Argentine economy went through during the past few months – the economic output shrank by 4.2 percent and unemployment rose from 8.7 to 9.6 percent in the second quarter of 2018 – no member of the political opposition has so far been able to capitalize the pervasive discontent afflicting a large percentage of the population. The Frente Para la Victoria (FpV) party hasn’t because it has a high level of rejection among Argentine voters and the Partido Justicialista party hasn’t either because it still hasn’t been able to position itself as a firm contender to the Casa Rosada.

Fornoni warned, however, that the feeling of disillusionment is big and even if Cambiemos voters are not likely to migrate – massively or not – to Kirchnerism, many of them are claiming that their economic situation was better when Cristina Kirchner was in office.

“We are talking about the pragmatist voters who voted for Macri because they thought he would bring change but now are experiencing discontent.” Their argument tends to be that they were told the situation was dire, but it wasn’t visible because the economy hadn’t exploded.

“What I do know is that my life conditions are far worse now, they say. ‘My gas bill used to represent 10 percent of my income, now it’s 40 percent.’ Back then, I had enough money to make it until the 25th of every month.’ Now they only make it to the 12th,” she explained.

Social organizations have set up impromptu soup kitchens around the city to make the population’s precarious economic situation visible. Photo via Ámbito

Fornoni also said another argument usually brought up by voters is the contrast between the PRO’s administration of the city of Buenos Aires and how Cambiemos runs the country on a federal level. Because even if the economic variables were not rosy back then, porteños were at least able to observe concrete improvements in their daily lives. That does not happen any more. “They say they don’t see the education levels rising. They don’t see classes starting. The breaking point was about five months ago [when the economic crisis began]. Before then, people said that the situation was complicated but felt they were going down the right path. Now, people aren’t sure this is going anywhere. And that is the biggest concern.”

Just like no one in politics seems to be able to capitalize the economic crisis, no one has so far been able to score political points with the so-called “notebooks scandal” and increase their support ahead of next year’s elections.

“The government is unable to do it, probably because of the economic crisis, but no other opposition party is doing it either. It is not clear who the other opposition parties are,” she explained and warned that it was unlikely that the scandal would affect the former President’s image among her followers in the first place.

“Cristina voters are loyal. The number of supporters has obviously shrank but if you read about other scandals such as the ones involving José López and Lázaro Báez and haven’t changed your mind, this is just another court case. This scandal affects the private sector the most – we asked that specific question in a survey – and most people believe this harms the entire political spectrum, not just Kirchnerism” she explained.

The reason behind this apparent inability by those on both sides of la grieta to exploit their political foe’s weaknesses is simple: they apparently go hand in hand. “There is like a tandem where inflation and corruption go together. When people are concerned about the economy and there is a corruption scandal, it has a much larger impact. When things are going well, it does not matter as much. In fact, when the ‘notebooks scandal’ surfaced, the economy went from being the main concern of 60 percent of the population to 50, and not because the economy was doing better,” she indicated.

Photo via Minuto Uno

Fornoni estimated that “today, if we speak in round numbers, Cristina Kirchner has 30 percent of the vote, Cambiemos has another 30 and the remaining 40 is waiting to see what happens.”

“This does not mean that if an outsider rises they will obtain the support of that 40 percent of the electorate. Some will probably go one way and some to another,” she added.

The Peronist Partido Justicialista, nowadays also known as Peronismo Federal, is trying to position itself as a force able to realistically aspire to the presidency by presenting itself as an opposition that is less staunch, more dialogue-prone and with a viable economic plan. However, the party not only has the uphill challenge of rising above the ideological divide, but also of anointing a candidate: it currently has several senior representatives but no clear leader.

When asked about who it could be, Fornoni said that the highest-profile ones are Salta Governor Juan Manuel Urtubey and Río Negro Senator and PJ caucus leader in the Senate, Miguel Pichetto, but it would be difficult for them to challenge the presidency.

“Urtubey is known by around 70 percent of the population, and Pichetto by around 60, 65 percent. They are not well known to a considerable percentage. It is a hard challenge. Moreover, a candidate’s positioning campaign is extremely costly,” she argued.

Pichetto (center) and Urtubey (right)

When asked why it’s so difficult for new actors to enter the higher strati of Argentine politics, she said it is because the ones who are already there don’t want to leave.

“There are many young people who went back to being in politics with the FpV and Cambiemos, but no one leaves their spot. It is also difficult because, on the other hand, there is a lot of disinterest. We see it in municipalities, when we poll a political leader’s popularity. People don’t know any council members, not even the ones who have been in office for decades. You can’t get someone to sponsor a campaign of yours if you take them a survey saying only 10 percent of the people know who you are.”

Considering that the world has recently seen the rise of unlikely political leaders, it’s intriguing whether the same could happen in Argentina. When discussing the possibility of seeing a disruptive new leader rise to the national stage, Fornoni explained that those chances exist, “but not to the same extent of 2001, when the population demanded for ‘everyone to leave’ Argentine politics.” The Partido Celeste, which was conceived after the debate over the legalization of abortion by its most staunch detractors, came to mind. “It’s hard to know whether it will become a real party,” she said. “In this country, it’s impossible to know how things will evolve or how quickly it will happen.”

“It happened in Spain, for example, with the Indignados party. It seemed like nothing was going to happen but it ended up being a political party,” Fornoni concluded.

Management & Fit was born 28 years ago as a market research company in Mar Del Plata. It opened a public opinion department 10 years ago and throughout the years positioned itself as one of the leaders in its field, to the extent of having reached a partnership with Clarín whereby the news sites publishes its most important reports and, particularly, an exclusive survey about the people’s expectations about the economy and their trust in the government and opposition’s senior politicians.