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Children react during an event of the "We're Here" Argentine government program in San Miguel, Argentina, June 2, 2017. REUTERS/Marcos Brindicci

(reuters_tickers)

By Nicolás Misculin

SAN MIGUEL, Argentina (Reuters) - Argentina's centre-right government is trying to improve its image among the poor ahead of October's mid-term election by paying young supporters to do social work in shantytowns surrounding the capital of Buenos Aires.

The youthful activists in their signature blue jackets are struggling to gain traction, however, in areas where the opposition Peronists have painstakingly built community networks since their founder Juan Peron governed in the 1940s.

Residents like Jorgelina Cardozo, who runs a free food pantry in the southern suburb of Florencio Varela, complain that Macri's welfare workers are looking for quick photo opportunities rather than long-term improvement.

"They said they would keep coming but then, nothing. Nobody from the government calls any more," she said.

Macri's allies need a strong showing in mid-term elections to convince investors he can win a second term and execute an ambitious agenda of economic reform. The province of Buenos Aires surrounding the capital city of the same name is particularly important as it is home to a quarter of the national electorate, much of it either working class or without work.

Macri was elected in late 2015 on promises to dismantle the heavy-handed trade and currency controls favoured by his predecessor Cristina Fernandez, a free-spending Peronist who financed her government's deficit by printing pesos.

Macri, scion of one of Argentina's wealthiest families, eked out a surprise win in Buenos Aires province in 2015. But he has cut popular energy and transportation subsidies to get Argentina's finances in order, earning some enemies in low-income towns.

Looking to strengthen ties to the hardscrabble communities, Macri's "We're Here" programme pays about $500 per month to 250 young people supporting independent organizations that provide food and social services and organise sport and cultural events.

'DOING THINGS DIFFERENTLY'

Fernandez's opponents say she and her fellow Peronists bought votes with generous government spending in the poor and heavily populated circle of suburbs around the capital.

Macri's government, composed of many former bankers and executives, says they are more genuinely concerned with social welfare and with fighting corruption.

"The policy under the previous administration was clearly understood: you scratch my back, I scratch yours," Pedro Robledo, the 25-year-old head of the "We're Here" programme, told Reuters.

"Social workers under the Macri government are doing things differently."

People like Maria Canete, who runs a food kitchen providing for 340 children up from 200 in 2015 in the suburb of Quilmes, remain sceptical.

"With the previous government I did not want for anything. It's more difficult now. The food we distribute is not arriving like it used to," said Canete, adding that she sometimes dips into her own pension to buy the food.

A third of the Senate and half the lower House of Congress are up for election in October. Macri's Cambiemos, or "Let's Change", coalition is not expected to win a majority in either chamber.

But if his allies beat candidates affiliated with Fernandez, who may run for a Senate seat in Buenos Aires province herself, investors will take heart in Macri's 2019 prospects.

"If Macri's allies gain ground in the October election, he will start looking like a two-term president," said political analyst Rosendo Fraga.

EVITA LEGACY

While his supporters are mostly upper and middle class, Macri says he would like his mandate to be judged on his ability to lower Argentina's poverty rate, now above 30 percent.

Macri's government formed alliances with moderate Peronists and passed legislation early in his term, ending a decade-long dispute with hold-out creditors and passing a budget aimed at cutting the deficit.

But the government was forced to moderate its proposal for an income tax reform last year and a capital markets reform eagerly awaited by investors has lulled.

For a government bent on modernizing the economy, nostalgia for the old days can be a formidable foe.

Fernandez, who succeeded her late husband Nestor, won two presidential elections thanks in part to comparisons to Peron's wife Evita who is still adored by many working class Argentines 64 years after her death because of her charity work and founding of hospitals and orphanages.

"Things were better when Fernandez was president," said Micaela Benitez, an unemployed 22-year old attending a government-sponsored event in the suburb of San Miguel.

(Writing by Hugh Bronstein; Editing by Caroline Stauffer and Mary Milliken)

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