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October 22, 2014
Friday, July 11, 2014

From Russia with energy

A red-letter weekend for Argentina approaches — not only Sunday’s World Cup final but the visit of the leader of the planet’s largest country on the previous day (albeit a brief stay, given Russian President Vladimir Putin’s anxiety not to miss the soccer showdown in Rio). Yet even though occupying only a few weekend hours, Putin’s agenda will have rather more substance than a token courtesy visit. Energy will be writ large, although not the sector drawing the liveliest speculation recently — intriguing as the prospect of Gazprom teaming up with YPF to develop Vaca Muerta shale might be, this world-class deposit remains a long shot here while Russia will enjoy ample oil and gas reserves of its own for years to come. Instead a nuclear energy agreement with Rosatom is expected to be on the front-burner, thus consolidating a relationship which could be extended to military purchases. The Cristina Fernández de Kirchner administration smiles on deepening this relationship (with Argentina one of the countries responding most positively to Moscow’s worldwide quest for allies this year in the wake of its clash with Ukraine over Crimea) but there is less enthusiasm over the trade gap widening as the ties expand (close to a billion dollars within a bilateral volume of almost US$2.5 billion) — Argentina’s currency restrictions and balance of payment problems do not permit this luxury and the case for a better commercial balance might well be presented.

Putin will, of course, be here tomorrow en route to the BRICS summit in Fortaleza and that event also supplies an interesting subtext to his visit in the form of his alleged invitation to Argentina to join the bloc. A flattering offer indeed but one which needs to be clarified and approached cautiously. Firstly, does the invitation mean full-scale membership to turn BRICS into BRICSA or is it merely for the observer status already enjoyed by dozens of countries? Secondly, if the offer is indeed ambitious, Putin (never one to be circumspect with formalities) risks overreaching himself because such an offer should properly come from the summit host — a Brazil especially sensitive these days after its World Cup misfortunes. Nothing should be more important to Argentina than Brazil, not even Russia — any mirage of BRICS membership should be subordinated to the relationship with our giant neighbour.

Whatever the views about the Kremlin’s geopolitics, top-level visits here have been so few and far between in recent years that the presence of the leader of the world’s largest country must be seen as a positive and welcome development.

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