MINDING THE FORT

Reforming the intelligence services has consequences that are not just domestic

If the controversial law replacing in the Intelligence Secretariat (SIDE) with the new Federal Intelligence Agency (AFI) is approved by the Lower House, then — perhaps — the government will begin a much needed reform of what became, a long time ago, a synonym for scandal and the abuse of power. As many have said, one of democracy’s outstanding debts.

Opinions are divided. Many in the opposition argue that the new AFI will be nothing more than a cosmetic change to the old agency. However, some pro-government commentators are moderately optimistic and say that the proposed changes are far from complete, but that the new law is a small step in the right direction. And they point out that that the AFI will be under much stricter control that its predecessor.

Even if that is the case — and democratic control would be a welcome change — there are a number of urgent issues which still seem to be pending.

Perhaps the most critical is about “who is minding the fort.” As useless and corrupt as the old SIDE might be, one wishes to think that it actually discharged at least a fraction of its real responsibilities. Although the plan is to have the new AFI fully functioning in four months time, it is doubtful that it will be fully operational that quickly. Unless, of course, the opposition is right and the only change is the letterhead on the stationery.

But — if that is not the case — one hopes that there are some stop-gaps, threat detection mechanisms in place. After all, Iran is, right now at least, at the top of the local political agenda. And matters concerning Iran are obscure enough so as to make it unwise to drop the ball. Especially after the discovery a few days ago of what seemed to be a terrorist presence in neighbouring Uruguay. Not to mention the fact that, at the time of writing this, it is not clear if late prosecutor Alberto Nisman was murdered and, if that was the case, by whom.

If, for the sake of optimism, one assumes that interim provisions are in place, as promised by the government’s legislators, there are other vital questions that cannot wait until a new and more comprehensive law is discussed and voted on.

A quite pressing one concerns alliances. Quite obviously, the priority threat to this country is global terrorism. The sad experience is that, in Latin American terms, Argentina seems to be a likely target. And there is no evidence that this will change in the near future. Consequently, it is worth asking just how solid the relations are with the traditional international partners of the Argentine intelligence services, namely the Americans and the Israelis. Have they been hurt by the recent turmoil in this country’s intelligence agency? If so, can they be fixed? In fact, the question transcends the spies’ world, and becomes political.

Lately, Argentina has made quite a lot of noise about its new strategic partnerships, namely China and Russia. How does this go down with politicians in the United States and Israel who, at the end of the day, are in charge of controlling their intelligence services’ alliances? In all likelihood, Argentina’s new strategic partners have intelligence priorities which do not coincide with this country’s. So, if the old links have deteriorated too much, it could end up being quite a lonely world out there.

Unfortunately, the new intelligence reform law was discussed in a hurry and without the involvement of the opposition. Both the government and its opponents are blaming each other for this. Perhaps they should share the blame? Or even worse — and even more frightening — it is not their fault and the problem is that the rift in Argentine society is by now so wide and so deep that both sides cannot even sit down and discuss something in a civilized way. In this case, a law which is strategic and has an enormous potential to create some very serious trouble, should something goes wrong.

A case in point: due to haste and the lack of dialogue, the role of the new intelligence apparatus in combating crimes that travel beyond borders, like drugs and people-trafficking or money-laundering, seems not to be totally clear. The new law says that the AFI cannot engage in topics against the intelligence activities unless they are so asked by “a specific judge for a specific case.” Sounds good in terms of democratic guarantees. But it also sounds unclear and is likely to be used by the bad guys to thwart efforts against them which originate in the AFI and are put forward by the prosecutors.

Beyond these urgencies, there are strategic questions which should be addressed. The first is, if this country wants its intelligence service to help its foreign affairs efforts, as well as contributing in areas like international financial or science and technology issues. It is quite clear that other countries’ intelligence services do, in addition to their cloak and dagger duties.

Take for example the holdouts/“vultures.” Over and above the legal action in Judge Griesa’s Court, the chaps from ATFA (American Task Force Argentina) got quite aggressive and abandoned the Queensbury rules. So Argentina was entitled to some — equally aggressive and impolite — retaliation.

In reply to the column published last week, “US politics and Nisman,” a Herald reader who lives in the US, Mr J (name withheld because it was a private email) kindly sent a message to this writer for which I am very grateful.

Mr J wrote: “I offer the suggestion that Senator (Marco) Rubio may have another reason for attacking the current government of Argentina. Perhaps he is satisfying his number two campaign contributor, Elliott Management. They have given him US$117,620 in the current campaign cycle. See https://www.opensecrets.org/politicians/summary.php?cid=N00030612. Love your country. You have suffered enough US interference.

True, several Argentine government officials have mentioned Elliot Management’s relations with the Republican party. And the information was probably provided by the Argentine Embassy in Washington. But perhaps, the level of detail offered by Mr J would have been useful to counter AFTA’s actions in the US. It’s not James Bond stuff. But it’s quite useful. Especially if an intelligence service has good enough “desk researchers,” a must in any modern intelligence service.

Perhaps a totally reorganized AFI could use some of them as well.

@andresfederman

CREDITS: BUENOS AIRES HERALD

US POLITICS AND NISMAN

Senator Marco Rubio, Republican and presidential hopeful decides to intervene in Argentina’s affairs — but why?

Meet US Senator Marco Rubio, a through and through Republican.

He decided to get involved in the Nisman affair. So he wrote to the US Secretary of State, John Kerry, a rather strong letter, which he immediately made public. Most of it contained criticism of the Argentine government which seemed to be a cut and paste job from local opposition media press reports. And it offered a rather undiplomatic comment: “It is difficult to see how such a government can be trusted to conduct a complete and impartial investigation into these allegations.” And, for good measure, he added: “I thus urge the administration to support the establishment of an independent, internationally assisted investigation into Mr Nisman’s suspicious death.”

Other US lawmakers expressed their concerns about the circumstances of Alberto Nisman’s death and sent their condolences to his family. Some were not too Argentine-friendly. But no one was as aggressive as Rubio.

Immediately, rumours started to circulate about a forthcoming visit of US lawmakers to Argentina, in order to inspect the government’s handling of the case. Then the rumours were toned down. And instead of the lawmakers, it would be their staffers who would be visiting Argentina.

In turn, the message from Buenos Aires was a letter from Argentine Ambassador Cecilia Nahón, addressed to all US lawmakers in which she rejected Nisman’s initial accusations and emphasized the Government’s “constant search for memory, truth and justice” and its “commitment to the fight against terrorism and international impunity.” So as to make the message more authoritative, President Cristina Fernández de Kirchner published it via her Twitter account.

Interestingly, there were several (unconfirmed) press reports about Nahón telling a US Congressional staffer that Argentina “will not tolerate any invervention from the United States into the investigation of prosecutor Alberto Nisman’s death, and will consider any such attempt be an interference in the country’s domestic affairs and a violation of Argentine sovereignty.”

Even more interesting, a number of press commentators were convinced that the harsh message about Argentina’s sovereignty had been included in Nahón’s letter. Which was not the case.

Facts and rumours

So far then, facts and some rumours. Which pose some questions about Marco Rubio’s statements and compel some comments to be written about the Argentine reaction.

Rubio is an opposition politician. So he tells his government to organize “an independent investigation.” A quite provocative suggestion for — an already very susceptible — Argentine government. And seemingly more than unfeasible in practical terms. Something that Rubio knows perfectly well.

A diplomatic — and discreet — offer of cooperation on, say, forensics would have been much more effective. Either to help the Argentine government if it wants to be helped or to show its lack of interest if the offer of cooperation is refused. Moreover, if the senator is convinced that President Fernández de Kirchner is so untrustworthy, then a quiet word to increase US intelligence efforts in Argentina would have been more effective. In any case, the odds are that this is happening already. And that the Republicans are been kept well informed about progress and developments. The North Americans are well known to depose bipartisan confrontations on foreign policy, defence and intelligence matters when vital issues are at stake.

So why the noise and provocation?

2016 in his sights

It so happens that Rubio is very critical of US President Barack Obama’s policy on Iran which, he argues, is too soft and detrimental to US interests. In addition — and perhaps more importantly — he is a competitor for the Republican presidential candidacy in 2016.

Rubio is already talking to donors, asking them to support his campaign. And he recently said in an interview: “The decision I have to make is: where is the best place for me to serve America to carry out this agenda that I have to restore the American dream given the dramatic economic changes we’ve had in the 21st century? Where is the best place for me to achieve that? Is it in the Republican majority in the Senate or is it as a candidate, and ultimately as president of the United States? If I decide it’s as president, then that’s what I’m going to do, irrespective of who else might be running.”

It looks as if the senator and likely candidate is using the Nisman case as a tool for his own political ambitions. It is no secret that many members of the US Jewish Community are worried after Nisman’s death, and quite unhappy with the Argentine government on account of the memorandum signed with Iran. Consequently, making noises about Iran and Nisman seems to be a good way of attracting their votes and support. Currently, the senator’s way of doing politics, nasty as it may be, causes limited damage. But, if he ever makes it to the presidency, there will be cause for serious concern.

As for Argentina’s reaction to Rubio and his colleagues’ statements and actions, they seem to be quite adequate. The government has made many mistakes in its handling of the Nisman case, but on this particular point: chapeau! Ambassador Nahon’s letter was friendly but politely firm.

If the reference to the “United States’ intervention” would have been included, it could have triggered some sort of reply and possible escalation. Instead, a non-attributable rumour or leak, delivers the same message and, possibly quite important in the government’s eyes, sends a clear message about sovereignty — and a militant message to the Argentine public.

CREDITS: BUENOS AIRES HERALD

THE CHINA SYNDROME

The implications of Argentina’s ‘strategic alliance’

President Cristina Fernández de Kirchner seemed quite enthusiastic about her current visit to China and the prospect of consolidating a strategic alliance with the biggest economy in the world. Even if some argue that China has not yet surpassed the US economically, this fact makes no difference to Argentina.

This strategic alliance seems to be a quite sensible decision on the side of the current Argentine government. China comes immediately after Brazil in the list of this country’s major export markets. And lately, China has become, if not Argentina’s lender of last resort, at least a friendlier door for Argentina to knock at when in need for cash, than, say, the IMF, let alone the private markets.

In addition, this new strategic alliance is consistent with the president’s foreign policy of distancing Argentina from the US and — possibly — from the EU as well. The increased links with Russia, to include support of that country’s policy on Ukraine, not to mention Fernández de Kirchner’s public chiding of the US last September at the UN, are more than clear signals that this country is changing its international profile and alliances. So finding powerful new partners looks like the smart thing to do.

Even China’s political processes seem to make it an adequate choice at this point in time. Because the power is concentrated in the Communist Party, interlocutors are quite clear. And there is no need to lobby lawmakers — including those in the opposition — like is the case in the US.

In addition, Beijing would never dream of publicly chiding Argentina over an issue like the death of AMIA Special Prosecutor Alberto Nisman. That was not the case with the US.

There are, however, some risks worth taking into account. Many observers agree that the days of China’s two digits growth rate are gone forever. And that the current six or seven percent annual growth rate that seems marvellous by EU or US standards, might not be enough in the case of the Chinese economy, which seems to suffer some dark spots, especially in the (very) delicate public and private financial sectors.

Her hosts will possibly not mention this to the president, and it would not be polite to ask. But there is plenty of information available which shows that the largest or second largest economy in the world, is dangerously close to a real estate bubble burst similar to those which hit several Western countries a few years ago.

The signals are all there. Many empty buildings that do not find purchasers or tenants. And there are big bank loans that financed the over-building and which now have to be paid from a tighter cash flow than what was initially expected. Everything is big in China. So — if it happens — it will be a memorable burst.

True, the Chinese government might be able to avoid such a scenario. But there is still another threat. That country’s local governments seem to have gone quite wild in terms of borrowing. And have offered as collateral land which they own. Moreover, rumour has it that (in some cases) such collateral has been grossly overvalued. Should there be a problem in a couple of those local governments, the contagion effect could be fast and powerful, throwing even more real estate into an already saturated market. And banks would find themselves with devalued collaterals backing risky loans. Definitely not a good scenario.

Fortunately, Murphy’s Law does not always apply. So, although some observers describe a disaster scenario, others believe that there is much room for damage control, although there will be adjustments to be made. This is unlikely to affect Argentina’s soya related exports. After all, the Chinese government will want to keep its population’s current standards of consumption.

However, even if the possible crisis is limited, China’s usefulness as a strategic partner would be seriously affected. Especially in terms of financial assistance.

And this could be made worst if relations with the US continue to deteriorate. Angering the US (Democrats or Republicans) means angering a country which can make Argentina’s life difficult in those international organisations which — at a certain stage — could or would be necessary for Argentina.

The IMF is a clear example of this. Currently, this government does not want to have anything to do with the Fund. But it is not certain that this will be the case in the future. After all, the government will change on December 10 this year. And even if the next government shares the negative views on the US and the IMF, the fact is that need triggers pragmatism.

In any democracy, foreign policy is the exclusive bailiwick of the executive with the aid of Congress. Given the Victory Front’s legislative majority, the president has every right to enter any strategic alliance which she deems useful for the country.

But — in modern democracies — the opposition is consulted before making strategic decisions. Surely, such consultations are not binding, but the exchange of views is, more often than not, useful to all sides. This government can argue that the opposition is very fragmented. Or that it could use the consultations to play cheap political tricks. Unfortunately, this is not unimaginable.

We all know that a deep rift is currently hurting Argentina. And the decision making process which led to this — somewhat risky — strategic alliance with China is another example of the need for both government and opposition to make a serious effort to close that rift. Or, at least, to seriously commit themselves not to make things worse in this crucial election year.

@andresfederman

CREDITS: BUENOS AIRES HERALD

BRING IN THE CIA

Intelligence services are vital, but ours needs serious reform

A tip for students, journalists et al. If you need reliable and — normally updated — information on the “history, people, government, economy, geography, communications, transportation, military, and transnational issues” of any country in the world, visit https://www.cia.gov/library/publications/the-world-factbook/. It might not suffice for a thesis, but it covers a bit more than the basics, which is often enough.

And — if you have some spare time — you can navigate through other sections of the website.

It offers information that could prove useful at a time when the tragic death of prosecutor Alberto Nisman and the frightening experience of the now-exiled Damián Pachter are showing — in fact, confirming — the need of a much delayed profound and extensive overhaul of this country’s intelligence service. Starting, given the current state of affairs, with the control of its activities, governance and use of funds.

The CIA’s website explains that “the 1980 Intelligence Oversight Act charged the Senate Select Committee on Intelligence (SSCI) and the House Permanent Select Committee on Intelligence (HPSCI) with authorizing the programmes of the intelligence agencies and overseeing their activities.”

In contrast, as reported yesterday in the Herald, “two serious organizations, the Association for Civil Rights (ADC) and the Centre for Legal and Social Studies (CELS), made their positions on the intelligence services known this week. Both agree on highlighting the relative autonomy that Argentine spies enjoy.”

Currently, the government, rather than controlling the Secretariat, seems limited to footing the political bill of the messy activities of its intelligence officers. Some of which seem to be performed on the government’s service and others seem to be “independent.” But in both cases, they are turning into a political liability — witness Damián Pachter’s case.

By the way, it should be noted that, while CELS can be considered close to Kirchnerite views, that is not the case with ADC. So it can be safely assumed that both the government and the opposition agree on the particular point of making the intelligence service answerable to somebody other than itself.

In a perfect world, reform should not be limited to controlling the country’s spooks. Once the political authorities secure effective control over the intelligence service, it would be vital to define precisely its mission.

It would be an extraordinary — and currently much needed — sign of political maturity if Congress could meet, sooner rather than later, and reach a consensus on the control and mission of the intelligence services. A law on this matter, voted for by a significant majority, including the main opposition parties, would send a positive internal and external message.

A number of foreign governments have, quite explicitly, voiced their concern about the Nisman affair. The fact that the list includes Uruguay and the United States, as well as France, shows that they might not be triggered (at least exclusively) by anti-Argentine or anti-Kirchnerite motives. The message seems to be “listen chaps, get your act together.” And before complaining about supposed meddling in our internal affairs, it should be noted that intelligence activities are a vital foreign policy issue.

One of the main reasons, and of great concern to Argentina’s partners, is that many of the threats to every country’s security are global and non-state. They range from terrorism to human and drug-trafficking and include other major crimes and money-laundering. International cooperation over these matters is the norm rather than the exception. Unfortunately, incidents like the killing of “Lauchón” Viale —an Intelligence Secretariat’s official — in 2013 suggests that the organization’s links with the criminal world are, to say the least, questionable. And consequently, the credibility of the country’s intelligence agnecy in the eyes of its counterparts becomes equally questionable.

Over and above fighting international crime, modern intelligence services provide other things to their countries. Looking again at the US case, it becomes clear that, contrary to popular perceptions, much of the CIA’s activity is far from the world of cloak and dagger and close to the world of academia, libraries and research. In fact, you will find CIA staffers on post-graduate courses and at annual meetings on foreign affairs.

In its own words, “CIA analysts monitor and assess foreign political developments, leadership, economic issues, military threats and science and technology.”

Quite clearly, no foreign policy can be effective without serious input from research. And there is nothing to indicate that Argentina’s Intelligence Secretariat is even close to providing any such thing. It seems that,at most, the Intelligence Secretariat is good at receiving — selected and selective — information from its US and Israeli colleagues.

@andresfederman

CREDITS: BUENOS AIRES HERALD

WE ARE IN SERIOUS TROUBLE

The credibility of the judicial system is damaged

Perhaps you are one of those who believe that Prosecutor Nisman’s is right in accusing President Cristina Fernández de Kirchner, Foreign Minister Héctor Timerman and others, of conspiring to cover up Iran’s responsibility in the AMIA bombing. If you are right, then Argentina is in serious trouble. Alternatively, you might be among those who believe that Nisman is lying in association with — or encouraged by — Jaime Stiusso and the other victims of the recent purge at the Intelligence Secretariat (SI). Once again, if you are right, then Argentina is in serious trouble. And in both cases, the trouble will have a quite negative impact on the workings of this country’s foreign policy and security.

Unfortunately, the current scandal is not about corruption or similar issues which cynics associate with the conduct of governments in many countries around the world. The biblical “let he who is without sin cast the first stone” often applies in those cases.

But global terrorism is and has been a major concern in this 21st century. And the AMIA bombing falls exactly in that category. So, associating the Argentine president in any way to that outrageous crime, is likely to raise many more eyebrows than, say, the ownership of hotels in Calafate. Even if, come February, a judge dismisses Prosecutor Nisman’s accusations. Which links to the complicated issue of the Argentine judiciary and its impact on foreign affairs.

The deep divide within those in charge of administering justice in this country seems to be quite unique. The fact that a Judge (Servini de Cubría) rules against a Special Prosecutor’s request to interrupt the yearly recess in order to deal with a serious matter, like an alleged presidential association with terrorism, looks quite strange by international standards. If the ruling is right, then the quality of Argentine prosecutors is called into question. Alternatively, others might wonder why a relevant Argentine judge like Servini shows so little concern about terrorism. In any case, the credibility of the system is damaged. And — because many local political controversies end up in court —this has a direct impact on the credibility of this country’s foreign policy.

In fact, the Memorandum of Understanding which Argentina entered with Iran on January 2013 and which is at the centre of the current controversy is a good case in point. For the record: this writer believes it was a total and absolute mistake. But, when the Argentine judiciary ruled the Memorandum unconstitutional, despite the fact that it was ratified by Congress, it called into question the credibility of any international agreement which this country may subscribe to in the future, regardless of who is in government. Especially because such judiciary seems to be very politicized, deeply divided and, consequently, highly unpredictable.

Unfortunately, the same can be said about the country’s intelligence service. The spy-trade has changed quite a bit in the last decades. Countries continue to spy on each other, but currently, much of the intelligence service’s efforts focus on terrorism. And because this is a global threat, international intelligence cooperation tends to be the norm among countries which, although not close allies, share anti-terrorist policies. One imagines that such change somewhat lowers some previous ultra-secrecy standards. But exaggerated exposure continues to be unwelcome. The quite public spat between the government and the former head of counterintelligence, Mr. Stiusso, is definitely not the thing to do in such circles. Especially because it included prolific mentions and details about Stiusso’s contacts with foreign counterparts. In all likelihood, his international interlocutors are less than happy. And it would not be surprising if — in their eyes — this makes further contacts and intelligence sharing with Argentina much less attractive.

True, currently Argentina does not seem to be an immediate terrorist target. But taking comfort from this assertion could be quite short-sighted. First, because terrorism is quite unpredictable. Second, because nowadays terrorist activity is not only linked to shooting or bombing people: the financial side of the activity is increasingly important. And this implies money laundering at global level. An area in which this country seems to be quite vulnerable. In addition, terrorism is increasingly being linked to drug trafficking. Another area in which Argentina has a recent history of lost battles. In both cases, the cooperation of foreign intelligence services can be invaluable. Losing it puts the country in a more vulnerable position. Especially because the current scandal has also involved the other mechanism of international cooperation in law enforcement: Interpol.

Over the past few days, Foreign Minister Timerman has, time and again, gone public using his exchanges with Interpol to show that the government had not asked the international requests for the arrest of the Iranian suspects to be cancelled. One can imagine foreign police officers asking themselves why does the Foreign Minister of a democratic nation need an international organization to vouch for him in his own country. It sounds strange and does not help Argentina’s credibility. The obvious explanation — internal politics are complicated for Mr Timerman — might not be good enough. The job of these international police officers is to fight international crime. Not to get involved in the petty local politics of a member country. In all likelihood, there will be credibility prices to be paid here as well.

In short, regardless of the end of this saga, Argentina’s foreign relations and credibility as well as its international links in quite sensitive areas have suffered significant damage.

@andresfederman

CREDITS: BUENOS AIRES HERALD

BEYOND PARIS TERRORISM

Challenges extend to differences between allies

Many people argue that, despite imperfections, black spots and contradictions, Western Europe’s democracy is the best, most advanced and humane political system on earth. This writer agrees completely with that view.

The march that took place yesterday in Paris shows that — despite differences — the main leaders of these countries stand by that way of life and perceive last week’s terrorist attacks in Paris as a very serious threat. The question is if the threats faced by European democracy are limited to terrorist attacks from specific fundamentalist groups. Or if it might be under both internal and external pressures, not necessarily as violent as terrorism but clearly challenging.

Right now, the spotlight is on the Muslim population. A conservative estimate is that six percent of the EU population adheres to Islam. The problem is that in some EU member states, the popular perception is that such proportion is much higher. In France, the eight percent Muslim population is perceived to be 31 percent. In the UK, the real figure of five percent turns into 21 percent in people’s imagination. The German psyche is more moderate. It thinks in terms of 19 percent of Muslims where there are only six percent. Consequently, it comes as no surprise that ultra-right parties like France’s Front National or Great Britain’s UK Independence Party are growing. And — in both cases — the Western European way of life would be a primal target if those politicians came into power.

To be realistic, security agencies will have to increase their surveillance over Islamist-related groups in the search of terrorists hiding in their midst. This is never comfortable and mistakes will happen. With luck, they will be limited to unnecessary harassment. But there could be — as has been the case already — nastier incidents. It is a vicious circle where the search for the few irritates the many, who, in turn, become more alienated from the authorities. The management of surveillance and investigation on Muslim groups without incurring in serious mistakes is — right now — a major challenge for European governments.

But the challenges are not only internal and limited to fighting terrorism.

The Western European model is quite unique. Could it become isolated? Some will take comfort from the presence of many non-European political leaders at yesterday’s march. But cynics (realists?) will argue that some of the non-European leaders who attended yesterday’s mass tribute in Paris, did so not because of their commitment to this particular — and refined — type of democracy, but because EU countries are still very relevant players, which merits positive signals in critical situations like the one faced by France last week. And cynics will further argue that, in spite of the global expressions of solidarity, realism demands that the optimism triggered by the support offered by a number of non-European countries’ heads of government or their ministers, is submitted to some critical analysis.

Those enamoured with EU main partners’ vision of democracy are, in global terms, a minority, and have different levels of disagreement with rather important countries. Take the case of China. Human Rights in China are a serious concern for the EU. In a meeting which took place last month, the European side raised issues like “the rights of persons belonging to minorities, especially in Tibet and Xinjiang, freedom of religion or belief, freedom of expression (off-line and on-line), freedom of peaceful assembly and association, the due process of law, arbitrary detention, and the death penalty.” A list unlikely to make the Chinese happy.

Then there is Russia. European democracy goes well beyond using elections to choose governments, so it is easy to add Russia to the list of countries which do not share the values of Western Europe. The current confrontation over the Ukraine crisis only makes matters worse.

In addition, and risking strong controversy, even democratic US has strong differences with the Europeans. Witness the espionage scandal leading to the CIA station chief being kicked out of Germany last July. Not to mention the fact that the US government’s pragmatism at the time of dealing with Islamist fundamentalist groups which then boomerang as enemies makes some European Governments quite unhappy.

In short, the other big powers show various levels of difference from the Europeans’ democratic ideal. Which, in light of all this, seems to be a rare commodity. So rare in fact, that it might need to take a new look at these other realities and find a way to manage the differences.

@andresfederman

CREDITS: BUENOS AIRES HERALD

FOREIGN POLICY CHALLENGES

Uncertain outlook before the presidential election

This year, Argentine foreign policy will be facing a number of challenges. One of them will be posed by the country’s own domestic politics, on account of the presidential election.

The opinion pollsters’ client list will include those foreigners who deal with this country as diplomats, investors or trading partners. Argentina has never been a model of foreign policy continuity like, say, Brazil. But, what adds to the foreigners’ uncertainty is the fact that government and opposition send different — and quite contradictory — signals about their views and plans.

True, foreign policy is not at the top of the local political agenda. But the gap between the two sides seems to be exceptionally wide. And as ever, the opposition is quite vocal in its criticisms of the Government’s policies. This increases the foreign players’ uncertainties. In some cases, this will send to the “wait and see” freezer some issues which should be sorted out sooner rather than later.

In terms of timing, the most immediate issue is that of the holdouts — vultures. The expiry of the RUFO clause triggers expectations. The government’s message so far seems to be “no policy changes.” But some think that this statement is more cosmetic than real and that — using an equally cosmetic mechanism — the government plans to solve the issue. Over and above these funds, which are the direct players, a number of possible investors and/or lenders are waiting to see the outcome of this story before making decisions about their future relations with Argentina. Given the state of the country’s kitty, this seems to be quite important. The problem is that the opposition seems to be in total disagreement with the government over this matter. Which adds to the foreigners’ sense of uncertainty.

Then there is the trade and investment agreement with China, voted last week by the Senate. It still has to go through the Lower House but — given the FPV’s majority — there is little doubt about the outcome.

Opposition politicians, commentators and business leaders are up in arms against the agreement. They argue that this deal will trigger an invasion of Chinese manufactures. And that it gives China an unfair advantage in terms of infrastructure projects. In addition, there are claims that Argentina is ceding sovereignty.

The general claim is that the agreement is asymmetric. Which might be true. It should be noted that — given the size of the two countries’ economies — asymmetry is a fact of life. Realpolitik rather than a sense of ideal fairness is the norm in international relations. In addition, the asymmetric relation is not new. In the last five years, Argentina has accumulated a trade deficit of more than U$S 20 billion. But then, the soybean exports to China have been vital for the Argentine economy. And the world economy is not generous in terms of offering foreign trade options.

Precisely because of this, it is unlikely that the Chinese foreign affairs officials will lose any sleep over Argentina’s future policy, regardless of the result of the October elections. But here again, the controversy sends signals to decision-makers in third countries in terms of expectations about Argentina’s policies and alignments.

This seems to be particularly so in the case of Mercosur. Opposition politicians have stated that Argentina should negotiate with China in association with its Mercosur partners. Does this imply that — if and when in government — the opposition will be more active in strengthening Mercosur? Surely Mr. Mauro Vieira, Brazil’ new Foreign Minister has Argentina’s policy on Mercosur and — more specifically — on Brazil as one of the items which he will be following carefully. In fact this goes two ways. The possible changes in Argentina’s main trading partner’s foreign policy is — or should be — one of the items that intrigue the Argentine government. And, the first evidence about this might appear in a few months. One of the key elements in the bilateral commercial relation, the agreement on auto’ trade is due to be renegotiated by mid-year.

Argentina wants changes in the agreement in order to reduce its trade deficit on this particular item. This view is not necessarily shared by the Brazilian industrial sector. It so happens that the car and auto parts industry has a strong impact not only on this country’s economy but also on local politics.

Any increase in unemployment in the industry has a strong impact, not least because of the political — and media — muscle of the trade unions involved.

In this particular case, the outcome of this negotiation will offer some evidence about the future dealings with Brazil’s new Minister for Development, Industry and Trade Armando Monteiro Neto. He used to be the President of the Brazilian equivalent of the Argentine Industrial Union. It will be interesting to watch how he manages the balance between his industrialist allegiances and his new diplomatic role. Or if he decides to postpone the renewal of the agreement for a one-year period, signalling his view that Cristina Kirchner’s is a lame duck presidency.

The list of challenges includes Russia. The heavily publicized strategic partnership comes at a time when Russia — which is in very serious economic trouble — is engaging in a quite aggressive attitude toward the United States and the European Union. Perhaps not the best of strategic partners for Argentina at this moment in time. Not least because Argentina already raises many eyebrows in Washington. And this is likely to get more serious if the Republican Party wins the next presidential election.

@andresfederman

CREDITS: BUENOS AIRES HERALD