SOFT POWER AT WORK

Pope Francis illustrates how to approach UN resolutions

On September 9, the United Nations General Assembly (UNGA) voted in favour of an Argentine initiative establishing basic principles to be followed in cases of debt restructuring. The principles — nine in total — are designed to protect debtor countries in default from illegitimate pressures or reprisals from creditors.

Of the 183 votes cast at UNGA, 135 nations voted in favour, 42 abstained and six said nay.

The government was ecstatic. President Cristina Fernández de Kirchner was quoted by this newspaper saying: “After the vultures preyed on Argentina and tried to prey on the world, an absolute majority of countries ended up supporting these basic principles.”

CFK is not alone in her views.

Last Friday, Pope Francis also referred to the IMF and similar agencies. He told the UNGA that the “international financial agencies should care for the sustainable development of countries and should ensure that they are not subjected to oppressive lending systems which, far from promoting progress, subject people to mechanisms that generate greater poverty, exclusion and dependence.”

The bad news is that, despite the majority vote, the UNGA resolutions are not binding. And the six countries that voted against the “principles” include the US, the UK, Germany and Japan. In other words, the world’s key financial markets, which are unlikely to give in to the moral pressure of a non-binding list of principles. As the pope told the UNGA, referring to multilateral organizations: “We must avoid every temptation to fall into a declarationist nominalism which would assuage our consciences. We need to ensure that our institutions are truly effective.”

The UNGA vote does not guarantee the “true effectiveness” demanded by His Holiness, but it might be a step in the right direction.

True, neither the pope, let alone Argentina, have the political, military or financial power to enforce the UNGA-approved principles. But they can exercise their “soft power,” which is the ability of a country — or, in this case, the Vatican — to persuade others to do what it wants without force or coercion, be it (again, in this case) financial or political. In fact, soft power, a given for important states, is a must for those nations lacking such attributes.

Pope Francis’ visit to the US was a perfect example of soft power at work. A case in point was his defence of immigration, delivered to a gathering of some 40,000 Latinos, which took place in Philadelphia. It was a strong message from the spiritual leader of 1.2 billion Roman Catholics, that is, 17 percent of the world’s population. Seventy million of them live — and vote — in the US. These figures should encourage Donald Trump and his followers to think twice about building walls at the borders and expelling millions of people.

Soft power is about credibility, legitimacy and picking the right fights. In the US, His Holiness got full marks on these three items.

Argentina has a sound case to put forward, based on its own experience, one that underscores its legitimacy and credibility. Its very advocacy for a solution to an issue that affects — or that may affect — many other countries is definitely a legitimate battle in which to engage.

While it’s true the government presented the UNGA victory to the Argentine people in a manner that was overly enthusiastic, and although it exaggerated the real effects of the vote — perhaps linked to enthusiasm or the needs of an election campaign — such a position is more than compensated for with the good work involved in actually securing the UNGA vote. It surely took long hours of research and legwork, as well as similarly long hours of quiet negotiating and lobbying.

The government invested a good deal of resources to get to this point. Continuity is the necessary condition to validate such an investment. If the nine principles are going to be something more than a mere statement, both the Economy and the Foreign ministries must keep working and negotiating. On the one hand, there is the need to strengthen the commitment of the nations that voted in favour of the principles. Additionally, it is necessary to use the UNGA vote as leverage to start negotiating with the four countries that voted against the principles. Some lobbying by means of lectures and public discussions, as well as press action, could prove to be quite useful.

The main bone of contention with the four negative votes is that these countries argue that the international financial institutions, and not the UN, are adequate agents with which to negotiate the issue of sovereign debt. It is indispensable to convince them that times are changing.

Given the imbalance of financial power in their favour, persuasion and negotiation seem to be a more realistic option than a shouting match. Pope Francis’ actions and speeches in his recent visit to the US seem to present the model that should be followed.

But before even considering any of this, it is important to note that on December 10 there will be a change of government in Argentina. It would be important for CFK’ successor — especially if it is not Daniel Scioli — to commit to continuity on this issue. If not, all that was done so far will have been wasted.

@andresfederman

CREDITS: BUENOS AIRES HERALD

BRICS OR BRICSA?

CFK’s desire to join the group, in vain or in vanity?

At an event which took place on September 10, President Cristina Fernández de Kirchner voiced — once again — her hopes that Argentina can join Brazil, Russia, India, China and South Africa as part of the BRICS. This rather loose association of emerging countries triggers — among many Kirchnerites — a vision of a strong alliance that will challenge the existing international economic order.

A further proof of the importance that CFK assigns to joining the BRICS, is that she made a public display of handing the job of advocating for Argentina’s admittance into the group to former Brazilian president Luiz Inácio Lula da Silva, who was visiting the country and present at last week’s event. In her speech, CFK told Lula that she hoped that BRICS acronym would turn into BRICSA, marking Argentina’s membership of the club.

However, although it might be seen as an exercise in nitpicking, it is worth noting some objections to CFK’s initiative.

BRICSA NO WAY

Last year, Russia invited the Argentine president to attend the BRICS’ summit that took place in Brazil. This triggered the expectation that Argentina would be invited to join the group. But it turned out that it was a mere invitation to visit the club and not a membership offer. At the time, Putin’s initiative seemed to have created some discomfort amongst Russia’s partners (Brazil?) because — in the end — the guest list was hastily expanded to include other UNASUR guests. In addition, CFK did not have the satisfaction of seeing the issue of holdout/vulture funds, which was the main focus of her speech, reflected in the meeting’s closing statement. Many saw this as a bit of a dismissive gesture in terms of summit etiquette.

Last year's speculations (illusions?) about a possible invitation to Argentina to join the club were politely but clearly rejected by several BRICS representatives, including Putin himself. The message of this year’s summit was quite similar.

The Russian Deputy Foreign Minister Sergei Ryabkov, told the press that “BRICS is not an organization, it is a collection of countries that are united by national interests. We think that the current format is an optimal one … After South Africa became participating state, the leaders decided to declare a moratorium for accepting new members.” True, he did include in his statement the line “we do not exclude anything. What will happen should be driven by national interest.” However, this last phrase seems to be an expression of diplomatic politeness more than a statement about the near future.

In fact, the original BRICS were born as BRIC, because they did not include South Africa. The four founding members, Brazil, Russia, India and China have a number of things in common. Possibly the most relevant ones are these countries’ large populations and the fact that — together — they account for a significant proportion of the world’s GDP. But, say many commentators, there was something missing. Only four of the five continents were represented. Africa was absent. And this encouraged the inclusion of South Africa in 2010.

South Africa — like Argentina — is not in the big league in terms of GDP or population. Its membership derived from the political need of having all five continents represented.

CFK’s illusions

Unfortunately for Argentina, the Latin American place is already covered by Brazil. Accepting Argentina into the club would force the BRICS to include four more members, one from each non-Latin American continent. Whilst four big partners plus a South African “smaller brother” make the group relatively easy to manage, ten members of different size in terms of both GDP and population would complicate — and perhaps paralyze — the group. This is perhaps the main reason that thwarts CFK’s illusions.

But this is not the only reason that makes the president’s push rather useless and untimely. There is also a local politics angle.

The president is almost at the end of her mandate. And joining the BRICS or, for that matter, any other international group or organization seems to be a decision that should be left for the next president to make. True, Daniel Scioli has a very good chance to be elected as Cristina’s successor and he is the FPV candidate, which she blessed. But, even if Scioli is totally in agreement with her views, she is undermining his future presidential authority by making commitments in his name.

If joining the BRICS is such an FPV priority, then it would have been a better idea to allow Scioli to voice the request to Lula, especially because he happened to be present at the event. In fact it might have provided Scioli with a good opportunity to publicize what he plans to do when he becomes president. Moreover, this might have offered him a competitive advantage given the fact that clear definitions are conspicuously absent from the messages of the three main presidential

candidates.

CREDITS: BUENOS AIRES HERALD

PUZZLES FOR THE NEWCOMER

Relationships will be far from simple and straightforward for the new administration

Frequently, foreign policy is not a key agenda issue at election time, and the forthcoming presidential elections are no exception. However, foreign policy advisers to the three key candidates have offered some clues in several talks and press interviews. There seems to be a confluence of opinion with regard to rapprochement with the United States (US) and the European Union (EU). However, there also seems to be agreement among the advisers about protecting current relations with China as well as Russia.

And while it’s true that there are differences in the level of priority that each candidate assigns to these objectives, in all cases they are at the top of their agendas. And they all ascribe great importance to the relationship with Brazil in particular.

This is very good news, especially given the politicians’ harsh controversies about the national agenda, partly due to the needs of political campaigning but mainly reflecting the profound rift in Argentina’s society. Continuity, predictability and rational players are always a welcome asset in foreign policy.

The bad news for those that will sit inside the Casa Rosada and the Palacio San Martín after 10 December, is that existing and, perhaps, future close relations with the above named countries will be far from simple or straightforward.

Close to home, Brazil, our next door neighbour, is stomaching an explosive mix. The country’s very poor economic performance of late, which is widening its deficit gap, combined with the saga of the corruption scandals — in which a number of government officials and lawmakers are involved — has resulted in a dramatic drop in the president’s public-approval rating. She is also weathering strong political pressures from different — and often opposing — sectors ranging from the São Paulo industrialist lobby, to citizens indignant with corruption, in addition to the social pressures derived from increasing unemployment.

It is in this context that Argentina has to reach agreements on bilateral trade, as well as the way in which Buenos Aires and Brasilia will go about negotiating on the EU and Mercosur fronts. Whilst everybody agrees that both foreign ministries have very adept officials, the fact is that both governments might be forced, in the near future, to prioritize their own internal interlocutors at the time of negotiating with each other. This sort of scenario can be very frustrating for all parties involved.

The China question

Overseas, China, has recently been in the news because of the weakness of its financial markets. But this is only part of the problem, and perhaps the least significant part. The way in which China commemorated the recent Victory Day holiday (against the Japanese), with a very impressive military parade, is sending out the clear signal that — despite the headlines in the global press — its aspirations of being a major power remain intact. Moreover, some observers have voiced suspicions about the possibility that the excessive fall of the Chinese currency was self-inflicted and perhaps a deliberate move aimed at showing off its ability to be a financial nuisance.

As I’ve stated previously in this column, China’s real objective is to increase pressure on the IMF in order for the Yuan to be admitted as part of that organization’s basket of currencies. The SDR, which stands for Special Drawing Rights, now includes the US dollar, the Euro, the Swiss Franc, the Japanese Yen and the Pound Sterling. The IMF says that it will only accept China into that club when the Yuan is traded on the free market, without any government intervention. This looks unlikely to happen very soon.

In addition, China continues to confront the US through quite unsubtle gestures. The guest list for the Victory Day military parade was a roll-call of heads of state that are unfriendly toward the US. Predictably, Russia’s Vladimir Putin and Venezuela’s Nicolás Maduro were quite prominent guests. They are also part of this country’s current circle of friends. Less prominent was Argentina’s Amado Boudou. Please note that it is up to the reader to decipher whatever message may be gleaned from this last reference.

Another Chinese gesture is the recent opening of a Yuan clearing bank in South Africa, thus giving Beijing a somewhat privileged position. This happens at the same time when Nelson Mandela’s original party, the African National Congress (ANC), has increased the volume of its anti-US rhetoric. Next month, the ANC is expected to issue a foreign policy statement blaming Washington for about everything which was and is going wrong in the world, from the Tiananmen massacre in Beijing 26 years ago to the current conflict involving Russia in Kiev.

Argentina’s foreign policy after 10 December will be to pursue a double objective of rapprochement with the West and maintaining and strengthening ties with the East, all set against this very complicated background. While relations with Brazil do not imply geopolitical choices between two sides, current and planned ties with the different players definitely does.

Optimists will call this scenario a challenge for the new administration. Pessimists (or realists?) will call it bad news. Make your choice.

CREDITS: BUENOS AIRES HERALD