Flights from reality

Homer Simpson anticipated the key issue in the South Atlantic dispute at the start of the week in the sketch where he says: “Didn’t you hear, Marge, they have no bananas” (his reaction to that inane Broadway ditty of 90 years ago “Yes, we have no bananas”). The lack of bananas on the Malvinas gave most of the edge to the build-up to President Cristina Fernández de Kirchner’s Tuesday announcement — great expectations of a major escalation in the economic blockade of the islands rather than either war or peace.

But that blockade never materialized — the announcements amounted to little more than declassification of the Rattenbach Report (already leaked to the media the year after the 1982 war and published as a book in 1988) and yet another presentation of Argentina’s case to the United Nations on Friday. So was it all much ado about nothing — a damp squib after so much grandstanding?

Yes and no. Assuming that Chile failed to play ball in cutting LAN flights to the islands, CFK presumably felt frustrated and was close to sheepish at times on Tuesday but if intensifying blockade was her intention, failure probably helps her cause more than success. Charges of military aggression against Britain are rendered less credible by the aggression of a commercial blockade — CFK retains the moral high ground while she continues to respect the mainland links to the islands under the 1999 Madrid Accords (her administration’s position continues to be that cutting these links is for Chile to offer rather than for Argentina to demand). The stunt was also extremely successful in co-opting opposition — both CGT Secretary-General Hugo Moyano and the opposing parties showed up (with perhaps the Radicals the least keen).

In fact Plan B seems better than Plan A at every level. Not only does the maximum aspiration of a blockade seem undesirable (as well as dubiously feasible with only 3,000 mouths to be fed by long-distance airlift, not the population of Berlin) — within the changes mooted, there is a much more interesting variant than simple interruption (with LAN compensated by the Buenos Aires-London flight). This would be to hand over the island flights to Aerolíneas Argentinas (again compensating LAN with Heathrow) and even multiply them, supplying the islanders with everything they want (including bananas) — a fascinating new example of the famous Kirchner political culture of dependence. Shades of Steve Hanke’s suggestion of buying up island votes in a self-determination referendum calling Britain’s bluff — but why should schemes to advance Argentine sovereignty have to exclude the islanders?

By the same token, the denunciation of British “militarization” in New York was probably a mistake — far better to keep the pebble rattling in the shoe than to throw stones. Nor does it make much sense to try and corner a Britain with a UN Security Council veto if the intention is to bring it to the negotiating table. Even when throwing in nuclear submarines (courtesy of the Daily Mail), routine movements to Britain’s own bases and Prince Williams search-and-rescue training in ideally rough South Atlantic waters are not going to impress the Security Council as hyper-aggressive in today’s world — despite all Foreign Minister Héctor Timerman’s maps showing Britain’s South Atlantic empire menacing the Amazon basin and Africa. The islands have, of course, been militarized since 1982 — nothing new there.

Nothing new either with the Rattenbach Report or the mental health facilities for veterans with post-traumatic stress disorder (these already exist) but that report — the post-war junta’s enquiry which was promptly shelved — does at least have the virtue of Argentina looking critically at its own sins in the war before pointing a finger at Britain, even if the media typically received much of the blame from CFK for whipping up the initial enthusiasm for the war in 1982. The declassfication is somewhat spurious because the report will be vetted for a month by a commission for anything hazardous to national security — is that code for anything which might irk Chile by highlighting its collusion with Britain in 1982?

Evidently there was a miscalculation in overestimating Chilean willingness to isolate the islands — if Chilean President Sebastián Piñera’s original claim to fame was his LAN airline and if his coalition is replete with surnames like Chadwick, Golborne and Ward Edwards, it was perhaps irrationally optimistic to expect him to assent to announcements concerning that airline made by another capital. Earlier in the week British Foreign Secretary William Hague was rushing to Santiago to avert the dreaded blockade but now it will be Foreign Office underling Jeremy Browne at some time in the next few weeks.

But perhaps Chile’s real beef with Argentina is the rising protectionism here when Argentine exports to Chile treble the imports — in general, Chile is too globalized an economy not to subscribe to free trade (consistently resisting full Mercosur membership because its Common External Tariff is too high).

This commercial aspect is not just limited to Chile — a regional crusade on behalf of South Atlantic sovereignty is not compatible with import controls crimping the sales of neighbours here. Brazil is staying mum and while Uruguay is not backing away from the regional port ban on vessels flying the Falklands/Malvinas flag (the main reason for the shortages on the islands), President José Mujica was critical of the blockade concept — and no wonder if a 19-strong mission is in Stanley negotiating mostly food sales (including bananas?). An ALBA American Bolivarian Alliance summit in Caracas last weekend (where Timerman was more restrained than in New York) was more supportive but even two Caribbean countries attending that have backed off the port ban. And it did not help Timerman in New York that neither of the Security Council’s two Latin American members, Colombia and Guatemala, belong to ALBA.

Yet none of the CFK administration’s gesture politics spell any danger of war, which opinion polls show only three percent of the population to consider as an option — sensible enough if the British defence budget is 59 billion dollars as against 2.5 billion dollars here. Indeed so feeble is the Argentine defence capacity that any British buildup might seem militarization — British Prime Minister David Cameron’s verbosity also lends credence.

One footnote on Tuesday — the attack on Peronist deputy José María Díaz Bancalari by war veterans apparently infuriated by a previous bill of his to give 1982 “mainland combatants” equal benefits to front-line troops.

This whole Malvinas hype is understood more widely than the government perhaps realizes as a distraction from the various cutbacks (including subsidies). It also fits into a Kirchner syndrome of dwelling on the past — even if it is now the 1982 war rather than the 1976 military coup. But rather than look to the past and the dregs of British colonialism, why not look to the present (still dominated by the United States) and the future with emerging markets in Latin America as well as Asia?

ELSEWHERE. That present was present in this city last week in the person of Washington’s Deputy Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson, who met Timerman just before he shot off to New York. No evidence of Jacobson sharing the one-track mind over the Malvinas. Instead her priorities were putting the relationship back on track after a rocky 2011 and Argentina’s various debts (especially two US companies favoured by rulings of the International Centre for Settlement of Investment Disputes or CIADI) while the Middle East commands the attention of her State Department far more than the South Atlantic.

A meeting between Buenos Aires Governor (and also national party chairman) Daniel Scioli and Moyano went almost unnoticed when last month was rife with speculation about a a potential anti-CFK alliance from such a huddle. Moyano confirmed resignation from the Buenos Aires provincial party chairmanship even though his CGT term ends in midyear (an heir from the “productive sector” is mooted).

Yet another meeting last week was between YPF oilman Antonio Brufau and ministers Hernán Lorenzino (Economy) and Julio De Vido (Federal Planning) amid nationalization rumours swirling around the company. If some people are convinced that the Malvinas conflict is all about oil, this issue is lively enough on the mainland — in many ways the offensive against YPF is parallel nationalism to the Malvinas. Vice-President Amado Boudou accused YPF of financial rather than productive vision (for example, speculating with shale oil discoveries instead of developing them) while at the end of the week the federal card of the oil-producing provinces under Chubut Governor Martín Buzzi was played against YPF. Anguished by reports that this year’s fuel import bill could reach 13 billion dollars, the government blames YPF for the 35-40 percent sag in oil and gas reserves rather than its own policies. But more will be needed than trying to jawbone oil out of the ground in the style of Domestic Trade Secretary Guillermo Moreno.

In other economic news, an official inflation figure of 0.9 percent was posted for January as against the independent estimate of 1.9 percent via Congress. But public spending was only rising 20 percent at the end of last year, as against a steady 35-40 percent throughout the Kirchner years (capital flight explains why inflation only averaged 25 percent in that period).

Finally, issue of the SUBE electronic top-up card for public transport was extended to March 2 — evidently the government is hoping that eliminating bus company subsidy deceit via these cards will do the trick before raising fares. Last and perhaps not least, rain continued last week but too late to save the harvest from losing several billion dollars.