Daniel Scioli, Argentine presidential candidate, right, greets supporters after delivering a speech during a final campaign rally before the election at Luna Park in Buenos Aires, Argentina, on Thursday, Oct. 22, 2015. Ruling party candidate Scioli said he would raise the threshold at which Argentines begin to pay tax to 30,000 pesos ($3,150) from 15,000 pesos if elected president.Nicolas Janowski/Bloomberg
Argentines vote Sunday to elect a new president, ending the Kirchner epoch and beginning what seems certain to be an era of fiscal reform in one of Latin America's key economies, regardless of who wins.
Polls have Daniel Scioli, a moderate candidate for the populist Peronist party, in the lead, hovering within one point of enough support to clinch the presidency on the first ballot. If he does not win 40 per cent of the votes and a 10-per-cent lead over his nearest challenger, a second round will be held Nov. 22. Argentina has never had a presidential election go to a second round; the candidate leading in the last week has always clinched a first-round vote.
Mr. Scioli, a former vice-president and current Governor of the populous and powerful province of Buenos Aires, is the personal pick of President Cristina Fernandez de Kirchner, who is constitutionally barred from serving a third term. His nearest challenger is Mauricio Macri, the centre-right mayor of the city of Buenos Aires and a Kirchner critic.
The two men, and the trailing third candidate Sergio Massa, a dissident Peronist, have made clear they will significantly alter economic policy if elected. What differentiates them is how fast they likely would act. Mr. Scioli, who has a wide coalition of backers including unions, small business and powerful provincial governors, all of whom have differing demands, has not given a timeline.
"Scioli has been the most opaque, and in that way the most astute," said Maria Esperanza Casullo, a political scientist at the National University of the Rio Negro. "He said, 'I'm going to continue the best policies of this government and I'm going to make some changes,' and a lot of people wanted to hear that message."
Argentina's foreign reserves are critically low and could run out in December. With inflation officially at nearly 15 per cent (and, many economists say, actually much higher), and the black-market exchange rate 1.5 times the official one, a currency devaluation appears inevitable.
Julio Burdman, who heads a political consultancy called the Electoral Observatory in Buenos Aires, said even Mr. Scioli will devaluate. But since this would hit poor Argentines particularly hard, he is unlikely to do it as quickly as Mr. Macri likely would if elected. Similarly, both candidates said they would cut taxes on agricultural exports and cut energy subsidies, but Mr. Scioli would be much more gradual, Mr. Burdman said.
While Mr. Scioli has not made any open pledge to break from the current President's policies, he has given strong signs he intends to repair relations with the United States. He recently tweeted a picture of himself with the U.S. ambassador, for example. Ms. Fernandez de Kirchner has never met with the U.S. envoy and has instead ostentatiously cultivated relationships with Russia and China.
All candidates have emphasized a need to re-enter the global economy and end more than a decade of isolation from capital markets. Ms. Fernandez de Kirchner defied the demand for payment from the so-called "vulture funds" – New York-based hedge funds demanding $1.3-billion (U.S.) repayment for debt bought cheap after the 2001 default. But Mr. Scioli has talked about the need for foreign capital to, for example, develop the country's vast shale gas and oil reserves.
Mr. Scioli has been called the continuity candidate. While he is not as much of a leftist as hard-core Peronists wanted for their candidate, he is expected to keep intact the social safety net the current government has woven. But the economy – which had ridden the commodity cycle, and particularly soy prices, to strong growth rates the past few years – did not grow at all last year, while the inflation rate has eaten away at improved living standards. "So there is a sort of new consensus that says Argentina has already gone through a period of distributional policies and now it is time to create prosperity," said Mr. Burdman.
Ms. Fernandez de Kirchner leaves office with high popularity ratings – a first for Argentina. But she likely won't attempt to pull strings from the shadows, said Prof. Casullo. "Peronism is very vertical. There can be only one boss – plus, she's smart, and she knows that if she challenges [Mr. Scioli] there is a high probability she will lose."
The President has been a divisive figure, as fiercely beloved in some quarters as she is despised in others, and her legacy is mixed. Unemployment in Argentina was at 60 per cent when she was elected, succeeding her husband, Nestor Kirchner. As she leaves, it is 6 per cent. Her pension program and other social-welfare policies have helped raise the living standards of hundreds of thousands of the poorest citizens. She was returned to office four years ago with a huge mandate.
But she waged a bitter war with the country's largest media group; many of her close political associates have been implicated in corruption scandals; and she was tangled up in the strange death of federal prosecutor Alberto Nisman earlier this year.
Argentina's business leaders, in surveys, have tended to express as much or more support for Mr. Scioli than the market-friendly candidate Mr. Macri, apparently out of a belief that because he has more allies he will ultimately be able to achieve more reforms, even if he moves more slowly.
Mr. Scioli, 58, first attracted national attention as a speedboat racer. He lost an arm in an accident and went on to make a living selling appliances.
Editor's note: An earlier version of this article incorrectly stated the black market exchange rate. This version is correct.
A separate version of this article also incorrectly said Nestor Kirchner died in office. In fact, he was out of office when he died.