American Abroad

Argentina caught between a rock and a hard place

The British exploration group Desire Petroleum has started drilling for oil off the Falklands coast, despite repeat attempts by Buenos Aires to thwart its progress.

According to the Guardian, UK defence minister Bill Grammell has said he will take “whatever steps are necessary” to protect the hydrocarbon industry on its waters, following recent moves by Argentina to control traffic between its ports and the Falkland Islands.

Argentina’s president Cristina Kirchner issued a decree last week requiring vessels using the country’s ports to have a permit when departing or entering British-controlled waters. The government says that the exploration mission is illegal and Kirchner has petitioned the UN to mediate talks over the Falklands’ sovereignty, as well as blocking a cargo ship that the government suspected was carrying oil-drilling materials to the islands.

But Britain and the Falklands have brushed off the retaliation, saying shipping will not be affected as drilling supplies coming from Aberdeen will have little need for contact with Argentina. Many critics view Kirchner’s decree as a show of bravado intended to distract the country from growing domestic concerns and the government’s decreasing popularity. But if an oil bonanza is discovered, as Thatcher surmised in the 1980s, insult will be added to historic injury.

Argentina still claims sovereignty over its former territory lost in the 1982 Falklands war to Britian, and views the UK’s presence as an occupation. The issue is a matter of national pride for the South American country, with pupils taught in school from an early age that the islands are Argentine.

Geological surveys indicate there could be up to 60 billion barrels of oil underneath the seabed. But to date, searches for oil in and around the Falklands have proved disappointing, with exploratory projects in the late 1990s finding no reserves. Business analysts believe that the costly expedition also represents a high financial risk for investors. And equally, the preventative move by Kirchner is considered a potential business liability as it reduces opportunities in the country for companies that are also working in the Falklands.

The decree could increase the cost of exploration not only in the Falklands, but also in Argentina; as the permit requirements limit the number of investors and service providers in the industry, prices are likely to rise due to decreased competition.

When it comes to this historic dispute, there is no doubt that Argentina is caught between a rock and a hard place. Argentines may feel strong historic ties, but most readily admit that the islanders, if given the option, will choose either independence or British support over Argentine rule. And Buenos Aires is by no means gunning for a rematch, as diplomacy (however flaccid) appears to be its weapon of choice. In the long-run, Argentina has little to gain by continuing its claim to the islands, bar a highly successful irritation campaign against Britain. It appears that cutting the country’s losses and adding a footnote to the history books may yet be the best option.

Iceland joins forces with Wikileaks to become world hub for media freedom

The country worst hit by the global financial crisis is making a comeback that is certain to get great press. Iceland plans to become the media freedom hub of the world, having received consultation on media law(suits) from the infamous whistleblower website Wikileaks.

A group of opposition MPs suggested the proposal, the Icelandic Modern Media initiative, which will encourage freedom of speech, protect journalistic sources and wage a war against libel tourism-a common practice in the UK, where libel laws are infamously weighted in favour of the plaintiff.

The initiative has widespread backing among all parties, and is due to come before Parliament on 16 February. If it is accepted and made into law, this tiny country of 350,000, known for its fishing and (once-upon-a time) its financial services may have hit upon a new market. Iceland could become the world centre for investigative journalism, which has suffered continuing decline in the face of costly lawsuits.

Co-founder of Wikileaks Julian Assange writes, “I have been in Iceland the past few weeks advising parliamentarians here on a cross-party proposal to turn Iceland into an international ‘journalism haven’ – a jurisdiction designed to attract organisations into publishing online from Iceland, by adopting the strongest press and source protection laws from around the world.”

As Annabel Symington notes in her Wired expose on Wikileaks, the site is a veteran of fighting off sustained legal attacks, and Wikileaks plans to use its vast experience to help Iceland produce fool-proof legislation.

Iceland became a global pity-case when Landsbanki and its online savings bank Icesave crashed and burned during the credit crunch, leaving tax payers responsible to foreign creditors as the government proved unable to pay off the bank’s debts to the UK and the Netherlands.

As mentioned in the Guardian, Wikileaks first became involved in Iceland during this tumultuous period, when a TV broadcaster published a list of bank creditors on the site, after it was prevented from doing so on national television. Afterward, Wikileaks’ founders went to Iceland to discuss the idea of building a journalism haven in Iceland on a talk show.

Icelandic MP Birgitta Jónsdóttir believes that the initiative, which will take a stand on freedom of speech, may help Iceland recreate itself with a positive new image following the country’s economic collapse. “There are still very many Icelanders who feel ashamed. I think it is part of the self-recovery we have to go through,” she told the BBC on Friday.

Supporters of the proposal, which will also protect publishers, internet hosts and other intermediaries, say that it will encourage media outlets to set up shop in Iceland.

“If it then has these additional media and publishing law protections then it is likely to encourage the international press and internet start-ups to locate their services here,” explains Assange.

As a journalist in a country with some of the toughest libel laws, I can certainly see the appeal. Its high time journalism was given some priority over the rights and sensitivities of corporations and politicians. Had the UK acknowledged the need for fair libel legislation, it is unlikely that the Trafigura super injunction debacle would ever have gotten so out of hand. If Assange and his Icelandic compatriots do succeed in getting the proposal passed, my next travel plans just might include a parka, fishing rod, and a brief case full of classified documents.

Chinchilla wins Costa Rica in resounding victory for the right

Costa Rica has elected its first woman president, with the former vice president Laura Chinchilla winning a landslide victory as exit polls were counted this morning.

Chinchilla garnered nearly half the vote at 47 per cent, while opposition candidates Otton Solis from Citizen Action and Otto Guevara from the Libertarian Movement mustered just over a fifth of the electorate each, at 25 and 21 per cent respectively. The outcome sends a resounding message that Costa Rica’s pro-business policies are here to stay, no matter how many leftist governments succeed in winning over the rest of Latin America.

Chinchilla will continue the reign of Costa Rica’s centrist right National Liberation party when she takes office in May, becoming Latin America’s fifth-ever female president. The social conservative who opposes gay marriage and abortion campaigned on the platform of maintaining incumbent president Oscar Arias’s free market policies, which the country’s business community is celebrating as a victory for continued stability in a tumultuous region.

Costa Rica has been hailed as the “Switzerland of the Americas” with one of the most prosperous and stable economies in Latin America. The country abandoned its military completely in 1949, avoiding the region’s cold war conflicts, and has since invested heavily in tourism and environmental sustainability.

In recent years Costa Rica has unanimously embraced the neoliberal right. As the Christian Science Monitor, CSM, notes, out of the four main competitors for the presidency only one was leftward leaning. Libertarian candidate Guevara, who surged in the polls, called for the privatization of Costa Rica’s popular public health system, while the once flourishing leftist party Citizen Action barely won 24 per cent of the vote after losing the last election in 2006 by only two percentage points.

So why has Costa Rica so successfully left the Left behind?

Part of the reason can be pinned down to the popularity of outgoing president Oscar Arias, a Nobel laureate winner who ushered in the Central American Free Trade Agreement, CAFTA, and gained acclaim for his role in brokering the political standoff following the coup in neighbouring Honduras.

And the growth in popularity of Harvard-trained attorney Guevara, who intended on replacing the local currency with US dollars, certainly stole a fair share of the vote away from Solis. Many saw Guevara as an alternative to the traditional parties, but his success at the polls only served to weaken the opposition against Chinchilla.

Other analysts say that the rule of the right comes down to the fact that Costa Rica has never been ideologically motivated; the far-left in countries like Nicaragua and El Salvador has never taken hold in Costa Rica.

As the previous Costa Rican vice president under Arias, Kevin Casas-Zamora, told the CSM: “For most voters, the decision is between more traditional options and emerging ones. It’s the established politics versus those who are critical of the current administration. You can’t see Costa Rican politics through the lens of left and right.”

And as the Huffington Post points out, “Costa Ricans are reluctant to shake up the status quo when the country maintains relatively high salaries, the longest life expectancy in Latin America and near-universal literacy”.

But not everyone is happy with the outcome. According to the Guardian one candidate, Luis Fishman, ran under the slogan that of all the presidential hopefuls, he was the “lesser evil”.

Critics say that Chinchilla’s policies will encourage economic development above the needs of the nation’s ecosystem and workers. Environmentalists oppose the president-elect’s promotion of open-pit mining, while labour unions dislike her pro-US trade policies. Having failed to secure a majority in Congress, Chinchilla will have to take a more conciliatory approach in her economic and energy policies.

But while some say that Chinchilla is in for a difficult ride, there is no doubt that she has a clear mandate to govern the country as she sees fit. And as all indicators suggest, for Costa Rica, this means more of the same.

IMF loan hits Haiti

If there was any chance that the IMF’s one-size-fits-all policy toward developing nations has changed over the past 30 years, the emergency loan granted to Haiti has buried all hope under the rubble.

The IMF agreed last week to lend Haiti up to US $114 million after the seven magnitude earthquake devastated the small Caribbean country last month. While theoretically the IMF says debt relief will follow, historically loans granted by the international financial institution have always come at a hefty price.

Developing nations are forced to comply with a three-pronged prescription before they are granted much-needed assistance: privatisation, liberalisation, and public spending cuts.

The IMF has made such demands on the Haitian government in the past, bringing the country’s economy to ruin long before the earthquake hit. In 1995 the Fund forced Haiti to cut tariffs on rice from 35 percent to 3 percent, leading to a massive influx of cheap rice from the US. Having once been a net exporter of rice, Haiti now imports 75 per cent of its rice from America.

Meanwhile USAID invested extensively in Haiti, though none of the money went toward developing the country’s infrastructure. Instead the non-profit organization injected food aid into the country, ensuring Haiti’s long term dependence on foreign hand outs rather than agricultural self-sufficiency.

Already owing a debt of $US 165 million to the IMF, Haiti has been forced to raise electricity tariffs and freeze public-sector wages. Many predict that Haiti’s current debt conditions will continue to apply to the new loan.

As Richard Kim writes in the Nation: “In the face of this latest tragedy, the IMF is still using crisis and debt as leverage to compel neoliberal reforms.”

Charities say that new loans will bring Haiti’s total debts close to the $US1.3 billion level the country was at five years ago, when it qualified for the cancellation of $US 1.2 billion. Even before factoring in the most recent loans, Haiti still owes $US 891 million, of which $US 429 million is due to the Inter-American Development Bank.

Haiti is scheduled to make $10 million in payments to the bank next year, and to date there has been no agreement among the international community on debt relief.

The United Nations’ trade and development body Unctad told the Observer: “Considering the large direct costs of the earthquake, in the absence of further international action a new debt crisis is all but assured.”

Britain and the US support the IMF stance on cash first, debt-relief later. The IMF says that it could not issue a grant because of the lengthy waiting process, while a loan would fit the emergency time-scale. Few have questioned the IMF’s logic, as debt repayments are low on the priority list while people are still being pulled from the rubble.

But in reality, this quick-fix loan is likely to lead to long-term debt bondage. Haiti is not due to make any repayments to the IMF for two years, leaving plenty of time for political will to fade as Haiti drifts away from the media spotlight.