Kansas Bear

Argentine First Lady and Senator Cristina Fernandez de Kirchner heads into her first day of campaigning for president, pledging to extend the economic agenda of her husband that she said rescued the country.

Fernandez, 54, kicked off her campaign last night before a crowd of 2,000 supporters who watched a video of her featuring U.S. Senator Hillary Clinton, Venezuelan President Hugo Chavez, and the Colombian pop star Shakira. Later, the screen in the La Plata theater displayed her slogan for the Oct. 28 election: ``The Change Has Just Begun.''

President Nestor Kirchner, 57, leaves office Dec. 10 after overseeing more than four years of economic growth following a currency devaluation in early 2002 and a default on $95 billion worth of bonds, the largest ever. His successor will inherit an energy crisis, the second-fastest inflation in South America after Venezuela and slowing economic growth.

``Fernandez's agenda is different than the one Kirchner had in 2003,'' said Joydeep Mukherji, a sovereign ratings director at Standard & Poor's, in an interview from Mexico City. ``While Kirchner had to work on the recovery from the crisis and make Argentina move ahead, the next government will have to stabilize the country towards more sustainable economic growth.''

Fernandez's speech in the city of La Plata, the capital of Buenos Aires province, was her first since the government confirmed her candidacy July 2. She said her husband's policies had improved the quality of life for millions of Argentines and criticized ``neoliberal'' economics that she said Argentina followed in the 1990s, when state-owned companies were sold and unemployment soared.

`No Mystery'

``How did we reduce the unemployment rate?'' she rhetorically asked her supporters. ``How did we raise wages? How did we cut our debt? How did we get rid of the International Monetary Fund? There is no mystery,'' she said. ``It's the economic model, with a clear focus on industry.''

Fernandez leads the polls with 46.2 percent support, followed by Congresswoman Elisa Carrio with 12 percent and Kirchner's former Economy Minister Roberto Lavagna with 11 percent, according to a survey of 800 people conducted by pollster Analogias between June 25 and June 28. The poll has a margin of error of 3.5 percentage points.

Fernandez's support is lower than her husband, whose approval rating has fallen from more than 80 percent in 2004 to 52 percent last month, according to Poliarquia Consultores in Buenos Aires.

Energy Crisis

``Kirchner's government is passing through its worst moment since he took office,'' said Rosenda Fraga, a political analyst who runs the Nueva Mayoria polling company.

He cited the country's energy crisis and inflation among the reasons for the decline.

Energy investments in Argentina have shrunk since a freeze on electricity rates went into effect in 2002, leading to shortages for companies and rolling blackouts. Matthew Festa, an economist at 4Cast Inc. in New York, said he cut his forecast to 6.5 percent this year from 7.5 percent due to the energy crisis.

``We cut our economic growth forecast a few weeks ago as the shortages became more pronounced,'' Festa said. ``The government didn't want inflation so they were pretty strict on the price controls in the energy sector and that dampened investments,'' he added.

Price Controls

In another bid to fight inflation, Kirchner imposed price controls on hundreds of goods in late 2005. Annual inflation was 8.8 percent in June, down from 9.8 percent in 2006, according to official data.

``Inflationary pressures will have to be dealt with,'' said Jimena Zuniga, an economist with Barclays Capital Inc. in New York. ``I think there's a growing acknowledgement among even current officials that ad-hoc measures are temporary and will have to be phased out.''

A third issue Kirchner will hand to his successors is how to deal with debt Argentina has with the Paris Club and bondholders who refused the country's 2005 debt renegotiation, when Kirchner offered holders of defaulted bonds about 30 cents on the dollar. About 25 percent of the bondholders, holding $20 billion in defaulted debt, rejected the country's offer terms.

``Argentina has to normalize its situation to have access to new financing,'' said Miguel Bein, former secretary of economic planning. ``It's in the national interest. No matter who wins the election, the winner should work on this.''

To win the presidency, a candidate must get either 45 percent of the total vote, or take 40 percent and outpace the second place candidate by at least 10 percentage points. Otherwise, there will be a runoff election. Kirchner was elected with about 22 percent of the vote after his second-round opponent, former President Carlos Menem, dropped out.

``Don't believe that you are a hero, you are not,'' Fernandez said, smiling up at her companion of 30 years, who was seated in the mezzanine with Vice President Daniel Scioli and Cabinet Chief Alberto Fernandez. The audience laughed with her.

``But, you are not a common man either,'' she continued, her voice breaking. ``You are an extraordinary man. Mr. President, Argentines will never forget you. I just hope they won't miss you too much.''

Bloomberg.com: Latin America

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