August 8, 2011 / 4:20 AM / 6 years ago

Governor's race in Argentina neutral for Fernandez

4 Min Read

* Cordoba has 2nd most voters after Buenos Aires province

* Attention turns toward August 14 presidential primary

By Hugh Bronstein

BUENOS AIRES, Aug 7 (Reuters) - A Peronist candidate easily won the governorship of the key Argentine farming province of Cordoba on Sunday, after a campaign in which he distanced himself from President Cristina Fernandez.

The president is expected to win a second term in October, but Jose Manuel de la Sota's election in Cordoba was the latest in a string of local votes showing Fernandez might face tough going in rural areas opposed to her interventionist policies.

De la Sota has the same political roots as Fernandez, but the president has broken with many old guard Peronists while embracing a new generation of activists devoted to her and her late husband Nestor Kirchner, who preceded her as president.

Over recent weeks, candidates allied with Fernandez were trounced in the governor's race in Santa Fe province and in the Buenos Aires mayoral election. Following these thrashings, the government did not even have a candidate running in Cordoba.

"This wave of setbacks in local elections has increased the chances of a more competitive scenario in October, but Cristina maintains a great advantage over her competitors," said Ignacio Labaqui, a local analyst with New York-based emerging markets consultancy Medley Global Advisors.

With 2.49 million voters, Cordoba is the country's second most vote-heavy district after the province of Buenos Aires, where Fernandez enjoys wide popularity in the densely-populated suburbs around the capital city.

"The key to October's result," Labaqui said, "lies in next Sunday's primaries."

The Aug. 14 primaries are viewed as a dress rehearsal for October since no party is fielding more than one presidential candidate. [ID:nN1E76A0UR] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Full election campaign coverage: [ID:nARVOTE] Political risks in Argentina: [ID:nRISKAR] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

"Count on us to work to unite, rather than divide," de la Sota said in his victory speech, in which he sent greeting to Fernandez, who is often criticized for divisive rhetoric.

She and her top opponents will likely court de la Sota ahead of October's election. With more than 19 percent of the vote counted in Cordoba he had 45 percent, blowing past his two main competitors, who quickly conceded defeat.

Cordoba is an industrial hub and the No.2 soy producing province in grains exporting powerhouse Argentina.

Farmers often complain about the president's policies, such as corn and wheat export curbs which are intended to keep local food prices down but which also hurt growers' profits.

Fernandez's re-election bid is being helped by brisk economic growth in Argentina. She vows to "deepen the model" of her government if she wins a second term, which the farm sector worries may mean more interventionist policies.

"The fact that de la Sota felt he had to distance himself from the president in order to win shows a cumulative weakness for the government after the results in Buenos Aires and Santa Fe," said Gary Kleiman, head of Kleiman International, a Washington-based emerging markets consultancy.

"Investors are starting to incorporate a scenario in which there may be a competitive race in October," he said. "A new government would be welcomed by Argentina's sovereign bondholders. If the opposition polls well ahead of October, watch for bond prices to rise." (Additional reporting by Maximiliano Rizzi; Editing by Vicki Allen)

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