Hot air and hyperbole; Argentina’s claim to the Falklands

Rhetoric from the Argentine President Cristina Kirchner regarding Argentina’s long-standing claim to the Falkland, South Georgia and South Sandwich Islands, has heated up across the past year.  Often attributed to speculation of significant oil deposits surrounding the Falkland Islands, the Argentine government appears to have made the issue of sovereignty over the islands it’s foreign policy center piece.  It would be unfair to label the Argentine governments increased zeal towards the islands a simple oil grab.  After all, Cristina Kirchner has questions to answer regarding reports of significant increases in her personal wealth since coming to power, in part due to what appears to be preferential treatment relating to land purchases.  Explanations over Argentina’s economic performance will also be needed.  If not to satisfy the Argentine public, then to answer concerns held by the International Monetary Fund relating to the quality of reported economic data.  An issue such as sovereignty over the Falkland Islands is a useful tool of distraction and a welcome one no doubt during 2011, Argentina’s General election year.  Shrieks of colonialism and militarization are rife, unfortunately substance and reasoning remains sparse.

It has been mentioned that Britain’s proximity to the Falkland Islands, relative to Argentina’s, makes a good case for transfer of sovereignty.  There is however no apparent stipulation in International law that defines proximity as a factor of sovereignty.  Although countries have exclusive economic zones reaching 200 nautical miles from their coastlines, the Falklands are situated well beyond this.  Argentina’s claim to have had sovereignty over the islands in 1833 also appears dubious.  Only 5 years earlier had the United Provinces of the River Plate (later to become Argentina), ironically in a bid for colonial expansion and against protest by the British Consulate, attempted to begin settling the islands.  Britain, who had made claim to the islands in 1765, requested in 1833 that the administration leave, which they did, albeit unwillingly in the face of a significant military disadvantage.  Prior to the involvement of the United Provinces of the River Plate the islands had been claimed by France, Spain and Britain.  These territorial disputes had however been resolved without war and there appeared to be no remaining disputes regarding the islands.  This may in large part be due to the major powers of the time having other matters of national interest to attend to, as demonstrated by both the British and the Spanish vacating the islands, but leaving plaques to signal ownership of their respected share of the islands.  Knowingly having attempted to settle the Falkland Islands, in spite of recognizing Britain’s territorial claim as indicated by requests made to the British Consulate in Buenos Aires prior to travel, does little for Argentina’s argument of sovereignty.  Further harmed is Argentina’s endeavor to make itself out as a victim of colonialism in light of its own ambitions at the time.

Indeed, it would seem that Argentina’s own behavior may be the undermining factor in its arguments.  The UK discussed passing sovereignty to Argentina during the 1960s and 70s as part of the United Nations committee of 24 on decolonization.  During this time both Argentina and the UK pursued a program of increasing reliance of the Falkland Islanders on Argentina in a bid to pass sovereignty quietly, due to objections by Falkland residents who wished to remain under UK sovereignty.  In spite of a paper published to the British government in the late 70s, demonstrating the economic benefits and potential growth of the Falklands, it was decided that acting on the information might hurt relations with Argentina.  As a result the paper was ignored.  In 1982 the Argentine junta of the time invaded the Falkland Islands, starting a war that lasted 74 days and cost the lives of over 900 British and Argentine servicemen as well as 3 islanders.  Following the war the UK changed its stance towards the islands.  Previously there had been little military presence, but this quickly changed leading to the deployment of marines, fighter aircraft and naval vessels.  It also began to consider the possibility for economic expansion, such as oil exploration.

Today, the Argentine government protests Britain’s military presence in the area and claims it is militarizing the South Atlantic.  Evidence suggests however that while the technology deployed in the region has advanced, demonstrated by the recent arrival of a type 45 destroyer, Britain’s actual military presence has changed little across the past 3 decades.  The recent assertion by the Argentine foreign minister, without evidence, that the UK had deployed nuclear weapons to the area and poses a military threat to Brazil, adds credence to the belief that in lieu of logic and reason the Argentine government is using hot air and hyperbole to distract from domestic issues and push other nations to pressure the UK into engaging in talks on sovereignty.  This is something that the British government refuses to do and is in fact incapable of doing.  To negotiate sovereignty with Argentina while the Falklands war is still a recent memory and amid the torrent of hostile language and actions flowing from Buenos Aires would be political suicide for David Cameron.

On the issue of colonialism, Argentina would do well to remember that since 1945 Britain has overseen the transfer of independence to 45 former territories.  Britain’s argument for maintaining sovereignty regards the right of the residents to self-determination, a key concept and driving force behind the decolonization process.  Here in lies the real downfall of the Argentine argument.  Demanding control over land inhabited by a group of people who identify themselves with a different culture and nationality, and who strongly oppose such change, is itself colonialism.  Admittedly, should significant oil deposits exist and become economically viable to extract then the principle of self-determination could be seen as a convenience for the British government.  Nevertheless, Britain maintains the legal and moral high ground.  Provided Britain continues to deal firmly and fairly, avoiding the Argentine trap of appearing to bully an economically and militarily weaker nation, this position will not change.  As long as Argentina continues its current political posturing and fails to recognize that oil wealth in the South Atlantic would likely mean an economic windfall for businesses in Argentina, it will continue to harm its economy and reputation on the world stage.

The sum of the whole is greater than the sum of its parts

The road to a referendum on Scotland’s membership to the 305-year union of the United Kingdom is now being paved.  Aggressively pursued by Scotland’s First Minister, Alex Salmond, the referendum appears set for autumn 2014.  That is at least according to the most recent snippet of spin to come from Alex Salmond, who is determined to defer the referendum to a later date than that wished for by Westminster.  The desire of Alex Salmond to push the date of the referendum into the politically distant future, and that of Westminster to have any such referendum held as soon as plausibly possible revolves around the same pivotal point.  That is, the majority of people in Scotland, according to a number of recent polls, do not actually wish to secede from the UK.  The reality however is that Westminster will likely agree to an autumn 2014 referendum in exchange for concessions on the design of the referendum, including the question being asked and allowing 16 and 17 year olds to vote.

A read through of the Scottish National Party’s “Your Scotland, Your Future” brochure on the benefits of Scottish independence would, initially at least, have you believing that Scotland will be the 21st century frontier of prosperity.  Once finally freed from the “Tories down South” grip of tyranny, Scotland will enter a golden age of economic and social development and be granted a seat at the top table of the World’s governing bodies. There is however a difference between optimism and half truths and Mr Salmond is a proponent of the prior, but a dealer in the latter.

Scotland has a history of innovation, among a phlethora of other achievements, and as a result is an international leader in a number of industries and home to world renouned Universities. This provides Scotland with a pool of potential for the future.  Maximizing that potential is the holy grail of many governments and yet Alex Salmond and his party are surprisingly light on the details.  Since Scotland already has many devolved powers, the crux of the argument relates to a want of fiscal autonomy.  Scotland cannot be blamed for this, particularly given the mismanagement of the UK economy over past decade.  Independence would allow a Scottish parliament complete control over taxation, from value added tax to income and corporation tax.  It could set and collect levies on tobacco and alcohol should it wish and could provide attractive government subsidies to support and attract industry.  These are all trademarks of fiscal autonomy, but one large component is missing…currency.  The SNP has proposed to keep the British pound sterling for the sake of continuity.  This presents two immediate problems.  Firstly, it is the Bank of England that sets interest rates and prints money, leaving the Bank of England with significant control over how Scots spend and save as well as the value of their money.  The ongoing European crisis is an example of how surrendering these levers of the economy to an outside bank can have devastating consequences.  For now, the economies of the UK home nations are reasonably well aligned so such a situation would seem unlikely in this instance.

The second problem relates to Alex Salmond’s desire to have an independent Scotland join the EU.  The Lisbon Treaty requires all newly joining nations to accept the euro as its currency, something Alex Salmond apparently does not want.  If the euro were forced upon Scotland in exchange for membership then Scotland would still be without control of its currency, but with the added impact of the already existing imbalances between the eurozone economies.  The UK, through Westminster agreed a number of opt outs from the EU, one of which included joining the euro.  Whether an independent Scotland would still be covered by the original UK opt outs is a question for the lawyers, but my guess would be no.  Brussels is currently and will continue in the future to seek further powers from member states, which could, ironically, leave Scotland with less independence that it currently has.

Many questions regarding North Sea energy reserves, defense and the national debt remain to be answered.  On these issues Alex Salmond acts like a disgruntled spouse who wants the house but not the mortgage.  His belief that an independent Scotland should not take a share of the of the debt accumulated in bailing out the banks rest upon his claim that the losses made by the banks were made by their London branches and Scotland should not therefore have a hand in paying for it.  This begs the question as to what Alex Salmond would say if the UK government were to announce that Scotland would not see a penny of the money received in tax from any of the financial institutes based in London or from the eventual resale of the nationalized banks, of which the Royal Bank of Scotland is one.

Claims that an independent Scotland would have a seat at the top table are also flawed.  Scotland would certainly gain an independent voice with the EU and UN, but a seat at the top table it would not have.  Power in the EU has tended to reside between the Germany, France and the UK, as these are the biggest contributors to the EU budget.  Increasingly Germany and France have become the controlling nations with Germany the senior partner.  Alex Salmond is sorely mistaken if he believes an independent Scotland would have a significant say in the future of the EU or the eurozone, should Scotland join.  Further still, the UK is one of 5 permanent members of the UN Security Council with decisions coming from Westminster.  Should Scotland leave the UK, it should not expect to have continued representation at this particular top table.  Scottish ministers are currently heard in Westminster and vote in parliament on issues affecting the UK.  Scotland therefore has a voice that is heard around the world through organizations like the EU, the UN, the WHO and WTO.  The voice of an independent Scotland would not be so loud, nor for that matter would the rest of the UK’s.  The sum of the whole is definitely greater the sum of its parts.