Category Archives: Argentina

Argentinian Releases Olympic Propaganda

Over the last few days there has been some controversy over an advert that the Argentinian government has put out on national television to commemorate the thirtieth anniversary of the Falklands/Malvinas war. The advert is also strangely promoting the Argentinian olympic team at the same time.

See the advert here:

I am not usually a fan of using loaded words such as propaganda, but I feel that in this case it is justified because of the nature of the content of this advert. While I definitely sympathise with the issue, this kind of trite nationalism turns my stomach. How this type of action will help in Kirchner’s fight to regain the islands, I have no idea. I would think that her constant bashing on about the issue will only raise expectations in Argentina, and they are expectations that she has no realistic chance of fulfuling.

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O Globo Reveals Brazilian Participation in Falklands/Malvinas War

Source: Fox

The Brazilian newspaper O Globo has revealed that Brazil actively supported the Argentinian military dictatorship during the 1982 Falklands/Malvinas war, despite the fact that the Brazilian government has consistently denied that it took part in the conflict. The newspaper revealed that Brazil was involved in an operation to supply the military junta with large quantities of military hardware. Brazil’s role was to serve as a trafficking point for arms, most of which came from the Libyan capital Tripoli. The operation was organised by the Soviet Union in conjunction with the governments of Brazil, Cuba, Peru, Libya and Angola.

Brazil has been a strong supporter of Argentina’s claim over the islands in recent years, but it seems unlikely that Brazil would give Argentina similar support in a future conflict over the islands. Brazil has close links with Argentina and together they form the backbone of Mercosur, but Brazil is now fully inserted into the world economy, and has too much to lose by siding with an increasingly marginalised country.

There is more information here in Spanish, or here in English.

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Argentinian Government Begs Petrobras For Investment in YPF

After the severe backlash that followed the announcement of the nationalisation of YPF last Monday, the Argentinian government has asked that Petrobras – the energy company that is part owned by the Brazilian state – to invest more money in the Argentinian energy sector. The Argentinian planning minister Julio de Vido asked for the money while visiting the Brazilian capital Brasilia. He stated that ‘we are not asking that Petrobras replace Repsol,’ but that ‘we would like them to increase their participation in the sector.’ The Brazilian energy minister Edison Lobao said that that Petrobras ‘will invest as much as it can,’ but in actual fact the $500 million that it plans to invest this year is no higher than what it spent last year.

The agreement between the Argentinian government and Petrobras is an excellent sign for regional development. Latin American governments have traditionally relied on partnerships with North American and European companies to exploit their natural resources, but now Brazilian companies especially are starting to develop the financial muscle and know-how to make their own investments. Both Argentinian President Cristina Férnandez de Kirchner and her late husband found a close ally in former Brazilian President Lula, but the current Brazilian President Dilma Rousseff’s attitude toward left-leaning governments in the hemisphere has been a little more luke-warm. Although the agreement is a promising sign of things to come, it is still only a sign, and is not the answer to Argentina’s energy problems.

North American and European oil companies and investors that have the necessary knowledge and capital are now very unlikely to make significant investments in Argentina, and the appeal to Petrobras appears to be an attempt to find alternative sources of investment. The fact of the matter is that to fully exploit its reserves of shale oil and gas Argentina needs huge amounts of investment, which Petrobras alone is not capable of providing.

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Kirchner and YPF: Why She Was Wrong

Source: BBC

On 16th April Kirchner announced that the Argentinian government was taking control of 51% of Yacimientos Petrolíferos Fiscales (YPF), and said that it would pay the compensation that it deemed to be approriate. Argentinian President Cristina Férnandez de Kirchner justified the move by accusing the Spanish company Repsol, who owned the majority of YPF, of failing to invest enough in domestic production. She framed the nationalisation in nationalistic and emotional terms, stating that her late husband Néstor Kirchner had ‘always dreamed of recovering YPF for the country.’ Although the nationalisation might buy Kirchner some cheap political points domestically, it is likely to make worse, rather than solve, the problems that Argentina faces.

The nationalisation of YPF was the wrong move for four reasons. First, Argentina does not have the expertise or the capacity to exploit the potentially huge reserves of oil and gas that have been discovered in the past few years. Argentina currently spends more than 7% of GDP on the importation of energy, a figure that is now unlikely to improve. Second, Argentina already struggles to get international credit as a result of the huge 2002 default, and the arbitrary and sudden nationalisation of a branch of a large multinational company is likely to make that harder. Third, the nationalisation comes at an especially bad time for the Spanish government; just this week Spanish debt rose to 430 basis points above German debt. As Spain leads European Union policy toward Latin America, Kirchner’s actions could have potentially severe consequences for Argentinian-EU trade. Fourth, the nationalisation of the postal service in 2003, water in 2006, and of Aerolíneas Argentinas in 2008, already discouraged foreign direct investment in the country, and the nationalisation of YPF is likely to be a further disincentive to investors. The Financial Times wrote that ‘Argentina can kiss goodbye being treated seriously again by investors for another generation.’

I support the Argentinian state’s right to take control of its natural resources, but I question the manner in which Kirchner chose to carry it out. If Argentina is to prosper then it must play by the rules of the international community; if it does not then it will be consigned to insignificance while other Latin American countries take their rightful place on the world stage.

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The Big Mac Index and Argentinian Inflation

Source: McDonalds

That there is a current controversy over inflation in Argentina is not new news, but I found the use of the Big Mac Index to be a fairly light-hearted and interesting way to shed light on the issue. The Big Mac Index is a (very rough) measure of purchasing-power parity compiled by The Economist, supposed to be a tongue-in-cheek way for the lay (wo)man to understand the relative value of world currencies. According to the index Argentina is the seventh most expensive country in the world, but that is only after the Argentinian government has fiddled the numbers.

According to Daniel Politi writing for the New York Herald Tribune, the price of the Big Mac is not displayed anywhere in McDonalds restaurants in Argentina. Although it is somewhat unclear, it appears that the Kirchner government has struck a deal with McDonalds in order to keep the price of a Big Mac artificially low, and thus make the performance of the Argentinian economy look better. Sometimes the Kirchner government appears so farcical that it is difficult to remember that its policies are seriously impacting on the Argentinian poor.

For more details see the Big Mac Index for 2011 published by the economist. Interestingly the figures suggest that the Brazilian real is the most overvalued currency in the world, when compared to the US Dollar.

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Understanding the Falklands/Malvinas Conflict From the Argentinian Perspective

Sometimes it is easy to forget that there are two sides in any conflict. We in Britain celebrate the bravery of our soldiers in the Second World War, but we forget that hundreds of thousands of Germans lost their lives in bombing raids. The current dispute over the Falklands/Malvinas is a case in point. The BBC, for example, has shown considerable bias in its reporting, as another blogger has pointed out. Being British I try my best to understand the the Argentinian side of the conflict, but I still find it difficult to understand the sentiments and emotions at play, although I do not doubt that they are genuine. Two things have helped me to understand the Argentinian side of the conflict a little better.

The first link is from Spanish national television, from a programme called Informe Semanal. The segment follows some Argentinian veterans of the war as they revisit the island 30 years after the end of the 1982 war.

http://www.rtve.es/alacarta/videos/informe-semanal/informe-semanal-malvinas-30-anos-despues/1364646/

The second link is from the Argentinian newspaper La Nacion. The page has many different videos and news stories about the conflict.

http://www.lanacion.com.ar/a-30-anos-de-malvinas-t48007

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Top Argentinian Judge Forced Out by Kirchner Government

Esteban Righi
Source: mercopress

The Esteban Righi, head of the Argentinian judicial system, has left his post after Argentinian Vice-President Amado Boudou accussed him of trading in influence. In the letter in which he renounced his post, he said that he was ‘aggravated,’ and that Boudou had neglected ‘the interests of the nation’ in favour of his own. Whether or not Righi is guilty of the crimes that Boudou accusses him of is still unclear, and will not be clear until a future trail takes place (if it ever does). Nevertheless, this is yet another worrying sign for the state of Argentinian politics.

Argentinian President Cristina Fernandez de Kirchner has already confirmed Daniel Reposo as Righi’s replacement. Reposo allegedly has close ties with Boudou and has shown strong bias toward the Kirchner government in the past.  Kirchner has already manipulated the Instituto Nacional de Estadística y Censo and forced them to undereport inflation. Now, it seems that her government is taking a stab at asserting its control over the judiciary. With each day that passes the label of  ‘authoritarian’ becomes a little more apt for the Kirchner government.

 

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Thatcher, the Liberator of Argentina(?)

I read this article today in El País, entitled Thatcher, la libertadora argentina. For those of you that don’t read Spanish, or cannot be bothered to read the article, John Carlin (a Brit) argues that Argentinians should thank Thatcher, as her actions  humiliated the military dictatorship and helped to bring about its demise. While he has a point that the passing of the dictatorship was beneficial for Argentina, and that Thatcher played an important role in it, he fails to see the complexity of the situation. The war humiliated not only the military junta, but the Argentinian people too. Many of the Argentinian veterans that returned from the conflict were isolated from society and could not find jobs. The fact that the Argentinians remember the humiliation of their country, and forget the role of Thatcher in ending the dictatorship is not surprising. The British are not guilt free of selective memory themselves. We often claim that we ‘won’ the Second World War, and and fail to mention the role of the USSR, or revile Chuchill, while forgetting that he aggressively supported the British Empire.

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Kirchner Under Fire From the WTO

Source: El Porvenir

More than 40 members of the World Trade Orgnaization (WTO) have supported a report calling for Argentina to reconsider its import restrictions. The report said that the WTO had ‘continuing and deepening concerns regarding the nature and application of trade-restrictive measures taken by Argentina,’ and that, ‘we members who support this joint statement request that Argentina take immediate steps to address the concerns we have raised today.’ Argentina now has significant import restrictions on more than 600 products, ranging from computers to paper.

The Argentinian Government has tried to justify its policies in nationalistic terms. Vice-President Amado Boudou (@boudouamado) commented that, ‘this is a policy that serves all Argentinians; when we restrict the entry of some prodcucts on the border it is because we are looking out for the work of all Argentinians.’ The real reason that the government is trying to limit imports, however, is because Argentina must maintain its balance of payments. Argentina still cannot obtain international credit after the huge default in 2002 and so Kirchner is doing everything she can to maintain a trade surplus.

Argentinian President Cristina Fernández de Kirchner‘s decision to steadily increase import restrictions is part of a worrying trend that also includes the doctoring of the inflation rates and strong arm tactics against business. It does not appear that such policies are sustainable even in the medium-term, and that in a worse-case-scenario they might lead to another crisis similar to that which occurred in 2001. Although Argentina is in a difficult position, Kirchner’s neo-populist style and economic mismanagement are only making the situation worse. Argentina needs to restore confidence in the Argentinian economy, which would go a long way to restoring the country’s international credit. Imposing arbitrary import restrictions and hiding the true rate of inflation is not the best way to achieve that.

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Six Nobel Peace Prize winners speak out on Malvinas/Falklands

Source: The Week

 

In a letter published today, six nobel peace prize laureates have called for the British Government to reconsider its stance on the issue of the Malvinas/Falklands dispute. The letter called for the British Government to cease ‘refusing to dialogue on this matter,’ and that, the British military buildup in the area is ‘seriously threatening peace and harmony in this part of the world.’ David Cameron’s government, however, looks unlikely to budge on the issue.

Nick Clegg commented today, while at the 2012 Nuclear Security Summit, that the Argentinians are ‘keen to rattle cages in any way they can,’ but that ‘the issue of sovereignty, as far as the Falklands is concerned, is settled.’ His opinion, which is shared by Cameron, is that the wishes of the islanders override all other considerations. The emphasis on auto-determination plays well with the British public, and attempts to counter charges of neo-imperialism, but ultimately ignores other important areas. The British Government must recognise that the Argentinian Government has legitimate grievances that go far beyond the desires of 3,000 islanders.

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