OPTIONS MIGHT BE NEEDED

Macri heads to Davos summit as major BRIC partners exhibit economic clouds ahead

Neither supporters nor detractors are surprised by President Mauricio Macri’s planned attendance of the World Economic Forum in Davos later this month. Both sides will agree that his views have many points of contact with the free market credo of the meeting, which was not the case for his two predecessors that made a point of giving Davos a miss.

However, it would be wrong to place too much emphasis on the politics of Davos. The last Argentine president to attend the summit was Eduardo Duhalde back in 2003, and his visit had less to do with political affinities (possibly not too strong) than with the main purpose of delivering the message that Argentina had put the 2001 crisis behind. Duhalde tried then to emphasize that the country was, once again, an attractive option for investors. Today’s Argentina is a far cry from 2003, but foreign investment remains a top priority.

There is something else which is likely to be among the Government’s priorities — having more options in terms of international partnerships, something which was clearly explained by Foreign Minister Susana Malcorra. To this end, the government is working hard in repairing the bridges with the EU and the US, but — at the same time — it continues sending friendly messages to the partners it inherited from the Kirchner presidencies. In short, speaking about options, the more the better, which seems a wise decision in view of the not-too-optimistic forecasts for 2016.

A very recent World Bank report expressed concern about this year’s global economy. Much of the concern is focussed on the performance of the biggest emerging economies, namely Brazil, Russia, India, China and South Africa. Should these five countries, also known by the acronym BRICS, suffer a slowdown in their economies, the impact on the rest of the emerging markets would be immediate. And this, in turn, would have negative consequences on the financial markets, creating the conditions for “a perfect storm.” Cristina Fernández de Kirchner invested heavily in the partnership with the biggest emerging economies, particularly Brazil, China and Russia. But, currently, the particular circumstances of each of these countries make the partnerships less promising than years ago. This does not mean that they are over, but it clearly makes the search of more options quite advisable. Davos seems a good place to find such options.

Brazil is one of the obvious priorities in terms of partnerships. Nevertheless, things are not looking good for the big neighbour. Its economy is expected to shrink by eight percent in 2016. And the price of the country’s commodity exports has dropped by 41 percent in the last four years. As a result, two credit rating agencies have drastically dropped Brazil’s debt issues to the lowest category, leading to “junk” bonds. In addition to its economic woes, Brazil is in the midst of a serious political crisis triggered by mega-corruption scandals and general dissatisfaction. Meanwhile, Dilma Rousseff’s approval rating in the opinion polls reaches a meagre 12 percent.

None of this means that Argentina’s partnership with Brazil is over, but it does hint at a likely drop in its bilateral trade and investment.

China is another one of Argentina’s important partners which also seems to be in trouble. Last week, the Chinese stock exchange suffered another dramatic drop, which had an immediate impact on the rest of the world’s markets. Additionally, more devaluations of the Yuan are expected. The international financial institutions are keeping a careful eye on China. Especially because many observers agree that the most worrying aspect of it economy is not what is known but what is not known. They do not trust China’s data about its growth rate which, they argue, has been exaggerated. Again, a partnership with question marks.

Soon after being sworn in, President Macri had a phone conversation with Russia’s Putin. They exchanged commitments of continued cooperation. But Russia has big problems of its own. First and foremost, the drop in the price of oil is hitting the Russian economy very hard. In spite of this, Vladimir Putin seems determined to restore Russia to its old glory, which may be making matters worse. Part of this determination shows in the country’s current conflicts, Crimea being the best example. The US sanctions in terms of food exports are a big problem for Moscow and the same can be said of the sanctions imposed by the EU. All this could affect Russia’s value as a partner.

At this point, this writer would like to correct a mistake which slipped into the column published on January 4. Unlike the US, the EU sanctions do not include an embargo on food exports to Russia as reported. Instead, the EU’s sanctions include the ban on imports of products originating in Crimea into the EU as well as exports of certain goods and technologies to Crimean companies.

@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

CRISTINA, VLADIMIR AND FRANCIS

Embracing the pope and the new world order

It was back in 1944. In the midst of a meeting about the post-war world, Winston Churchill was explaining his views about the moral power of the Roman Catholic Church. Joseph Stalin interrupted him with a sarcastic comment disguised as a question: “How many divisions does the Pope of Rome have?” Stalin asked , making it clear that he only believed in military might as a source of power.

More than 70 years later, it is quite clear that those who succeeded Stalin at the Kremlin — especially after the fall of the Soviet Union — have different views about the power of the Vatican. Last Wednesday, Vladimir Putin visited the pope in Rome. It was their second meeting, and the situation in Ukraine was at the top of their agenda. Putin was not the first Kremlin leader to visit the pope.

Quite often, Argentines are said to be too self-centred and always ready to be convinced that whenever anything happens in the world, it must have some kind of link to Argentina. This writer believes that — perhaps in most occasions — it is a fair assessment. But, at the same time, in view of some of last week’s news, a look at the links that associate President Cristina Fernández de Kirchner, Pope Francis and Vladimir Putin might show some unexpected developments. There are several facts as well as some indicators, which stem from educated speculation, that seem to underpin this view.

Some facts: Russia and Argentina have publicly announced their strategic alliance. The alliance encompasses technological cooperation in areas like the generation of nuclear power that is needed by Argentina. Argentina in turn provides food exports to Russia that are quite important at a time when the EU and the US are sanctioning Moscow because of Ukraine, especially since there seem to be plans to extend the enforcement of these sanctions. Also, in political terms, Argentina supports Russia’s position in its conflict with Ukraine. And Moscow reciprocates by supporting Argentina’s sovereignty claim over the South Atlantic Islands. The alliance also implies a shared and critical view of the United States and of some its important EU partners.

It is also a fact that, when Jorge Bergoglio became Pope Francis, the Argentine president was quick to send friendly signals to Rome, putting an end to the several years of confrontation between the Kirchners and Bergoglio. These signals were acknowledged and reciprocated in terms of offering quick and quite frequent access to the Vatican, not only for Cristina, but also for several members of her inner circle.

Pope Francis has also made friendly gestures toward Putin. He has not condemned Russia’s policy on Ukraine, limiting his messages to a call for peace, asking Christians not to kill each other. And this message had some clearly identified addressees, including the Russian Orthodox and the Eastern Catholic Churches — permanently at loggerheads with each other.

Then there is the informed speculation. First, there is the fact that many top brains in the government are seriously convinced that the world is quickly changing its geopolitical shape. They point out at several indicators that range from China’s new role in the world to the emergence of the BRICS, the association of Brazil, Russia, India, China and South Africa. The economic problems in Europe underpin the Kirchnerites’ view, who remark that the end of US hegemony is here or just around the corner. Which, in turn, shows that the way forward is for strong states that, under regional associations, regulate their economies and manage — within this framework — their trade and investment relations .

Those who follow the Vatican closely emphasize the Pope’s activism which he has applied to hands-on conflict resolution, global in scope from Eastern Europe to the Middle East. They also insist on assigning a Peronist DNA to Francis, explaining such identity in terms of a geopolitical view of the world in which countries should not accept the place pre-assigned to them by the great powers.

As for the style, it implies the ability to find the adequate political task for each political leader, which can be determined by the possibility of assigning specific and appropriate roles to each of them. The obvious resemblance is to Perón who, from his Madrid exile, managed to be a more than significant player in Argentina’s politics. The observers speculate that Bergoglio has exactly the same ability. And that the future he envisages for Ms. Kirchner is that of being his informal ambassador, operating as a unifier and trouble-shooter in Latin America. It should be noted that this view, which many will see as a mere pipedream, was put forward by serious and non-Peronist operators.

@andresfederman

CREDITS: BUENOS AIRES HERALD

THE RUSSIAN QUESTION

On October 9, President Cristina Fernández de Kirchner surprised many by exchanging niceties on TV with her Russian counterpart, Vladimir Putin. In fact, they did not only share niceties but also a hefty dose of criticism of the dominant media which, they agreed, tend to shape public opinion by hiding the truth.

Earlier, there had been other signals that Argentina and Russia were getting closer to one another. There was Putin’s planned visit to Argentina and the invitation for Cristina to attend the BRICS (Brazil, Russia, India, China and South Africa) meeting in Brazil. Although the significance of such an invitation was then toned down and diluted when other members of UNASUR were also invited.

Above and beyond gestures, there were some hard policy decisions as well. Argentina defied the trade sanctions imposed on Russia by the EU and the US in reprisal for its annexation of Crimea from Ukraine. The country announced it would increase food exports to Russia to mitigate the impact of the sanctions. For some old timers with a good memory, this sounded like an echo of the attitude of the Argentine Military Junta back in 1980 when it defied Jimmy Carter’s embargo on grain sales to Russia, which were imposed as a sanction for Moscow’s invasion of Afghanistan.

But Argentina does not have a tradition of close relations with Russia. Distance and cultural differences are only part of the explanation. During the Cold War, Argentina was aligned with the US. And some very powerful sectors in Argentina were rabidly anti-communist and had the US as a role model. The pro-Soviet Communist Party in Argentina was banned for years. Even having a Soviet Union stamp in one’s passport was considered suspicious.

True, the world has changed and the Cold War is over. So improved relations with Russia do not raise any eyebrows. But in terms of consumer trends — from technology to TV series and films as well as tourism and many other day-to-day goods and services — the US still seems to be a major reference point for Argentine society. Not to mention the fact that over 400 US companies are established here. And — until Griesa appeared in Argentina’s life — New York used to be the financial port of call for the Argentine government and the country’s businesses. Moreover, many argue that on sensitive issues like enforcement of anti-drug and anti-terrorism measures, both countries’ security agencies continue to cooperate actively, albeit with a low profile.

Despite it all, it is quite clear that Argentina’s relationship with the US is far from optimal. It is not a new occurrence since there have been periods of tension before. And quite naturally given that the Argentine government has often made it a point to look at other options in terms of its own international alliances. These recent moves could be interpreted as a repeat tactic.

But there is a new element that calls for an additional perspective. And it is that both Putin and CFK have gone on the record with very similar lines of criticism of the United States. What they criticized was not a specific event or a particular policy. This time, both presidents targeted the entirety of the US foreign policy and its institutional context which dates back to the end of World War II.

The first shot was fired by Cristina at the last meeting of the United Nations General Assembly on September 24. She questioned the veto powers of the Security Council and called on the General Assembly to recover such powers. She firmly denounced current peace-keeping provisions and accused the US of backing rebel movements in the Middle East which then became new enemies, in a policy of endless confrontation.

The president also denounced US unilateralism and called for a complete reorganization of the international institutional arrangements that emerged post WWII, suggesting that the existing bodies only served the interests of a few powerful countries led by the US.

Curiously, last week, Vladimir Putin chose a high-profile event to deliver a speech along very similar lines. He chose the annual gathering of the Valdai Club in Sochi, one of the top local and international Russian policy forums. Qualified observers suggested that this was Putin’s most important foreign policy speech since 2007.

The theme chosen for the international conference speaks for itself: “New Rules or a Game without Rules.” He bluntly asserted his view that there is no certainty “that the current system of global and regional security is able to protect us from upheavals.” Even more bluntly, he placed the full blame for the situation on the US. He pointed out that “the so-called “victors” in the Cold War had decided to stoke events and reshape the world to suit their own needs and interests.”

The similarities between Cristina’s and Putin’s discourses are quite striking.

Their criticism of the dominant media could be attributed to frustration at domestic political problems, while Putin inviting Argentina to the BRICS meeting as the guest of honour — at least, to begin with — might be attributed to low-cost gesturing.

When it comes to Argentina’s defiance of the EU-US embargo on food exports, this can be explained in terms of commercial opportunism in difficult economic times. But these kinds of solid policy statements, as well as the possibility of Russia becoming a permanent arms supplier to Argentina and Argentina’s alignment with Russia on a number of international issues, beg questions about the government possibly making some drastic changes in Argentina’s international allegiances. This is not necessarily good or bad. But definitely worth some reflection. Especially from opposition politicians who seem quite silent on the matter.

@andresfederman

CREDITS: BUENOS AIRES HERALD

BAD TIMING

The tussle with the holdout “vulture” funds is at the top of the government’s foreign affairs agenda. And its diplomats have scored some important points in terms of rallying relevant international support for Argentina’s position even within the United States.

In many ways, it was a classical public diplomacy effort aimed not only at governments but also at qualified and influential players and opinion makers.

However, one of the president’s last moves might backfire in as much at it provided ammunition to the holdout “vulture” funds for their own lobbying effort targeted at discrediting the Argentine position and standing.

On October 9, Cristina Fernández de Kirchner shared a broadcast videoconference to announce that a Russian government television signal will now be available to the Argentine public. They exchanged niceties about the bilateral relation and criticisms to unfriendly media both local and international. A day later, the following two paragraphs were posted by ATFA on its website factcheckargentina.org.

“President Kirchner held a videoconference with Russian President Vladimir Putin, trumpeting the countries’ growing ties. The two leaders jointly announced the launch of a Spanish language version of Russian state-owned TV channel ‘Russia Today’ in Argentina. Radio Free Europe reported, State-run satellite channel ’Russia Today,’ a major platform for getting the Kremlin’s message to audiences abroad, has extended its reach with the inauguration of Spanish-language programming in Argentina.’”

Reminder: ATFA stands for American Task Force Argentina and is the very active lobby organization of the holdouts “vulture” funds headquartered in Arlington, Virginia, across the river from Washington, DC.

As for Radio Free Europe, it might ring some bells with readers born before 1970. It was one of the minor icons of the Cold War, based in West Germany, and broadcast to the then existing Soviet Union and its Eastern Europe satellites, financed by the US government. Nowadays, it is based in Prague and it describes its mission as reporting the news “in 21 countries where a free press is banned by the government or not fully established.” One of these 21 countries is Russia. The radio station explains that it “is funded by the US Congress through the Broadcasting Board of Governors” which is “a bipartisan federal agency overseeing all US international broadcasting services.”

It is easy to dismiss ATFA’s relevance if one looks at its lobbying efforts in Argentina. The actions included the publication — in several dailies — of two paid advertisements and a short visit to Buenos Aires in order to meet local journalists. It seems fair to say that they did not cut any ice.

Locally, there is an almost unanimous negative view of the “vulture” funds, even among those who think that the government should try to reach an agreement with them as soon as possible. But, unfortunately, Argentina is fighting this battle in the US. And ATFA can find there a significant sector of relevant players which is receptive to its lobbying. More so if it can associate it with values and views like those espoused by Radio Free Europe. These include a quite negative opinion about Putin.

Last week’s videoconference showed the president supporting the Russian president. A view which is reinforced by the fact that Argentina is exporting foodstuffs to Russia in direct opposition to the US and the EU’s sanctions on account of the Kremlin’s policy on Crimea. Nothing of this goes down well with many US movers and shakers and is being smartly used by ATFA to add more ammunition to its lobbying against Argentina. And it would be a mistake not to realize that Argentina already collects a number of negative points in the eyes of a sizeable portion of US public opinion. The presidential criticism of the US government are an obvious liability. The fact that some of them were voiced at the UN does not help. In addition, the non compliance with Judge Griesa’s rulings — however justified that might sound in Argentina — is not easily digestible for the US political culture. Not to mention the fact that the well-informed North American politicians, analysts and journalists are aware that Argentina is near the top of the list of countries where the people have anti-US feelings.

In addition, it was made quite clear by State Department spokespersons that Argentina is not the flavour of the month within the United States government.

True, it could be argued that the previous paragraph explains the public appearance with Putin. And that such a signal is aimed at underpinning the luring of more investments like that of Gazprom, the objective of increasing Argentine exports to Russia and even using Russia’s influence to tighten up relations with the coveted BRICS, the loose association of Brazil, Russia, India, China and South Africa.

Unfortunately the issue of the holdouts “vultures”, and its impact on Argentina’s access to the international financial markets seems to be too urgent to be compensated in terms of both volume and timing with the — undoubtedly positive — developments of more exports to and investments from Russia. And the BRICS connection — if it ever happens — is far from immediate. So, however smart the Putin move is, it definitely seems badly timed.

@andresfederman

CREDITS: BUENOS AIRES HERALD

WELCOME TO BUSY TIMES

On September 25 the US Embassy’s Chargé d’Affaires Kevin Sullivan welcomed two recently arrived members of his staff: Public Affairs Officer Thomas Mesa and Assistant Cultural Affairs Officer Katherine Ordóñez. In all likelihood, their posting in Buenos Aires (by the way, a coveted destination in many diplomatic services) was decided months ago. But new circumstances might mean that their workload will be heavier than that of their predecessors.

It is quite obvious that the bilateral relation is far from excellent or even good. And that — while the US is trying to tone down the disagreements — the Argentine government is trying to be as vocal as possible about them. Moreover, it does not seem likely that this state of affairs will change in the near future. Even if it does, the damage done to the US image and prestige in Argentine society will last longer than the intergovernmental spat that caused it in the first place. Controlling the damage and (ideally) reverting it, is a public diplomacy job. While traditional diplomacy is usually a government-to-government affair, public diplomacy is about engaging with the society of the host country, delivering messages, clearing misperceptions and fostering cooperation. Despite their individual efforts, this is not the day to day job of commercial or military attachés or even political councillors.

This is the job of people like Mr Mesa and Ms Ordóñez. Both their jobs are at the core of any public diplomacy effort. So let us meet them both with some bad news. For openers, anti-US feelings run quite high in Argentina, despite the local craze to visit Miami and New York. According to a recent opinion poll carried out by the Pew Research Centre only 36 percent of Argentines have a favourable view of the US.

Then there is the fact that they have arrived at the home of conspiracy theories. Many people find it difficult to accept that most things happen without being masterminded by “hidden powers.” And — unfortunately for the two recent arrivals — the US tops the league of those “hidden powers.”

The saga of Judge Griesa’s rulings in favour of the holdout / vulture funds is a good example of this. Many in the Argentine government continue to accuse the White House and the State Department of being in collusion against Argentina with Griesa and the plaintiffs. The fact that the US government is on record trying to help Argentina, albeit respecting the independence of the US judiciary, seems not to be registering. Never let facts get in the way of a good conspiracy theory.

Although this environment might seem discouraging, the bright side of public diplomacy work is that it is not about winning elections. And that only in very rare occasions it is required to deliver messages or influence the sum total of the population. In a world of scarce resources, Embassies tend to target their audiences and their messages quite carefully. And try to obtain results which are measurable in terms of quality and quantity. One interesting example is the above mentioned matter of the alleged collusion between the US Government and Judge Griesa. It is the kind of misperception which, if allowed to survive, could harm the US image as a business partner. Or harm the credibility of the US judiciary’s rulings in matters affecting global politics. Especially in a country like Argentina, where the independence of judges is such a sensitive issue. The target of messages about this is quite specific, and includes the local judiciary as well as current and future leaderships.

Another point in which the US Government is likely to have to deliver clear messages is that of sovereign states’ debt restructuring. Together with a number of countries, the US is opposing Argentina’s view that the issue of debt restructuring should be regulated by the UN. The US view is that international finance contains enough specialised elements so as to need the intervention of technical organizations like the IMF rather than a simple aye or nay at the UN. And because the IMF is many people’s demon of choice, to deliver positive messages about the US position will not be easy. Again here, there are specific audiences to be reached.

Finally, a note of colour to add to the newcomers’ concerns. Not-so-young people will recall that the late Juan Domingo Perón, the most important (not necessarily the best) political leader in twentieth century Argentina, was firmly convinced during many years that the world was governed by a “synarchy” collectively ruled by The Vatican, Zionism, Communism, Capitalism and — last but not least — the Freemasons. Fortunately for Argentina, in the last years of his life he seemed to have abandoned this theory. And today’s picture shows us that Moscow is not communist any more but a coveted member of the BRICS, the association of Brazil, Russia, India, China and South Africa which (in the mind of some of Argentine government followers) is called to replace the US as a world power. And the Vatican now has an Argentine pope so the pilgrimage of Argentine politicians seeking family photos with Francis seems unstoppable. As for the Freemasons, they seem to have faded away from conspiracies.

So this is a point to celebrate. Possibly over some good beef and wine, another of the privileges of being posted in Argentina. Provided, of course, you are not a vegetarian.

@andresfederman

CREDITS: BUENOS AIRES HERALD

INTERMESTIC

Some experts say that “all politics are domestic,” including those involving foreign affairs. So — at first glance — the “intermesticity” of our foreign affairs should not cause concern. However, this begs the question about how much impact of domestic politics on foreign policy is acceptable and normal, even if it is a bit of nuisance. Like the noise coming from our neighbours’ flat, beyond a certain level, the intermestic mixture ceases to be “a bit of nuisance” and turns into a big problem. And it may be worth considering if we are not already reaching that limit.

The Donnelley printing company flare-up might well be the signal that intermesticity has gone beyond acceptable limits. Regardless of the company’s sins — which vary, or even exist, depending on the eyes of the beholder — the fact is that they do not seem to be worse than those of other companies in other industries. However, Donnelley attracted the wrath of Cristina Fernández de Kirchner, who devoted a significant portion of a national broadcast to explain in detail her views about the conduct of the company, its possible associations, and the announcement that the government will try to throw the anti-terrorist law at Donnelley. To be more precise, a criminal prosecution which would be against some of its executives. And — in line with the speech — we then had a modest dose of anti-US demonstrations. Suddenly, the printing company was made to sit in the same dock as the holdouts/vultures.

The problem is that, in the current context, when lay-offs — temporary or permanent — are part of the daily agenda, singling out a company for presidential public chiding and anti-terrorist prosecution instead of normal bankruptcy law treatment, seems a bit over the top. But if — in addition — the company is from the US, then you are on your way toward a new level of politicization of the issue. And this might not be such a good tactic. Or — to put it bluntly — it might be a mistake in terms of choice of enemy. And what — to a certain extent — worked in the case of the holdouts/vultures might not function in this case.

The problem is that — in terms of politicians, media and public views abroad — the two cases seem to differ substantially. It is relatively easy to barrage the holdouts. There is sufficient testimony from highly respected non-Argentine observers so as to support the case against them. Moreover, due to the damage that they can inflict on Argentina, the priority in the attention of the president is more than justified.

But a printing company with a payroll of approximately 400 is — in comparison — small fry. Not to mention the fact that its trade is much more palatable than that of the holdouts/vultures. And that, whatever sins they have committed seem to be within the realm of normal bankruptcy laws, including the provisions for criminal prosecution in case a fraud attempt is detected.

It has been argued that Cristina’s attitude was aimed at sending a signal to unfriendly, or unhelpful, or even hostile, Argentine business sectors. This might be the case and it might even be justified. Local politics are highly acrimonious with the country divided in two apparently irreconcilable sectors. And neither of them are using kids’ gloves. So right now, we have a land with no saints, and should not expect constructive attitudes from any of the players. However, it is desirable over none of the players trying to use the intermestic factor to up the ante beyond the borders and against the national, general and non partisan, interest.

Whatever the short term poetical gains, attacking a US company might, in this context, backfire. And the same players that support Argentina’s case against the vultures might raise their eyebrows in this new case. Moreover, many sensitive US skins might start to look — once again — into the resilient, whether justified or not, anti-US feelings attributed to Argentines. This could backfire at a time when reserves are thin. Important as the currency swap agreement with China can be in terms of short term needs, or even of geopolitics, its size is far from enough to offer a long term reserve solution. And the BRICS’ development fund which might at some stage offer Argentina financial facilities, is still a project. In short, perhaps we do not want to send the Yankees home so quickly. We might still need them.

@andresfederman

CREDITS: BUENOS AIRES HERALD