Argentina: social conflict

President Cristina Fernandez de Kirchner has had a spoiled political honeymoon to forget -- and 2008 will be similarly gloomy.

Argentina's year ahead is likely to be marked by rising social conflicts, including strikes over wage demands, and political scandals. The country's growth will remain strong, although unresolved structural problems and excessive dependence on commodities raise doubts over sustainability. Political miscalculations and immutable policy-making may weaken the government without strengthening a largely dormant opposition.

The auguries were not good when Fernandez de Kirchner took power:

• Union pressures. Hugo Moyano, leader of the General Confederation of Labour (CGT), warned that he could pass to the 'opposite side' if she does not respect union demands when wage talks are held early in 2008.
• 'Suitcase scandal'. On December 12, the US Attorney's Office in Miami charged five men in connection with the case of some 800,000 dollars smuggled into Argentina by a Venezuelan businessman in August. The money was allegedly destined for Fernandez de Kirchner's campaign, and further damaging allegations look set to follow after their trial starts on December 28.

In the former case, Moyano has long been an unreliable ally of former President Nestor Kirchner. His own leadership of the CGT is under fire and, with union elections due mid-year, he will be under pressure to be more aggressive in wage negotiations. This points to a rise in social conflicts during 2008.

In the latter case, Fernandez de Kirchner's ill-advised and intemperate reaction has already undermined a key plank of her government -- namely, greater emphasis on foreign policy and improved relations with Washington in particular.