Skip to comments.Argentina's dangerous direction
Posted on 02/11/2005 7:48:12 AM PST by CitadelArmyJag
Argentina's dangerous direction February 11th, 2005
Buried deep in the appalling announcement of Cuba's new place on the UN's Human Rights Commission was the name of the country that nominated that outpost of tyranny for the honor: Argentina.
It's not the first time the southernmost country in the New World has done the bidding of Cuban dictator Fidel Castro. Last December, a Cuban dissident who sought de-facto asylum in Havana's Argentine embassy was unexpectedly denied an exit visa and forced back into the hands of Castro's waiting agents. Such events underline Argentina's political direction.
A few years ago, Argentina was one of the U.S.'s major non-NATO allies. Now, Argentina is undermining the U.S. and its agenda of freedom, in favor of strengthening Castro. Tragically for itself, for America, and for the cause of liberty, Argentina is rapidly emerging as an enemy.
Argentina's descent into the orbit of Castro has unusual roots. It's anti-American alright, with most Argentine voters falsely blaming the U.S. for their country's economic mismanagement. But unlike most run-of-the-mill anti-American states, there's no refuge in the arms of countries like France. In fact, Argentina's estrangement from Europe is far more bitter than its alienation from America. That is why Castro and his fellow pariah states are so attractive to Argentina as political allies now, and why Argentina is gathering momentum to undermine the US.
This ominous state of affairs is complicated. It derives from Argentina's catastrophic economic collapse three years ago. Argentina defaulted on $100 billion in debt in December 2001, amounting to the biggest sovereign default in history. It was a huge ripoff of anyone who had purchased Argentine bonds. Most of the stiffed debt holders were individual investors from countries like Italy, Germany, and Japan - small savers who had trusted in the good faith and good name of Argentina. Although of no interest to the American press, these debt holders are also a powerful political force in Europe, rightly pressuring their governments to force Argentina to make good on its obligations.
But Argentina has no intention of doing so. It wants to sweep the whole matter under the rug and settle the issue with them for 25 or 30 cents on the dollar, an offer so low and so unprecedented as to be insulting. Minus debt servicing, this is a country that posted 9% economic growth in 2004 and enjoys rising tax receipts. It has plenty of money to pay. It just doesn't want to. This week, its offer to swap debt on these fire-sale terms won the approval of only 35% of bondholders. Of these, over half were local Argentine banks who'd been strong-armed into accepting the terms - or else. The remainder, a mere 15%, considered the offer acceptable. The rest were livid.
America has been strangely aloof to this drama, not sticking up for these mostly European bondholders, who bought the Argentine bonds partly because they were issued under U.S. law and in U.S. currency. The Treasury Department instead has been urging Argentina to 'settle' with its creditors on any terms, so that the IMF aid spigot can return to business as usual and the matter no longer be America's problem. It's no pleasure to be critical of Treasury in this unenviable task: their idea is probably to get Argentina back into the Western system of capital and credit as fast as possible.
But there's a difference between 'settling' and 'settling fairly.' The Treasury's desire to close the books on this mess any old way is why Argentina has put forward such 'take it or leave it' nonnegotiable offers to its aghast creditors. It's potentially strong enough as an issue to destroy our critical alliance with Italy. Even more dangerously, Argentina is taking this U.S. impatient indifference as a sign of U.S. weakness and a cue to move boldly into the Castro orbit. The Argentina problem is no longer just a matter of finance, it is becoming a matter of national security.
The U.N. human-rights fiasco is not the only sign of the deterioration in Argentinas stance.
Italian investors have noted that Argentina's government is now continuously hurling insults at Washington. It's sent government-financed piqueteros (violent leftist vigilantes) to blackmail McDonalds restaurants. It's stalled the investigation of a brutal and deadly Iranian terror bombing of a Buenos Aires Jewish Community Center in 1994, and has let key suspects walk. Meanwhile, synogogue attacks and bombings of U.S. banks are on the rise.
Argentinas relations with dictator Hugo Chavez of Venezuela, meanwhile, have never been more cordial. "We are on the same team," Chavez told Argentina's president on his visit last week. The Argentine government also has targeted Argentina's only pro-American ex-president, Carlos Menem, a good friend and ally for his entire ten years in office, for repeated prosecutions. Not one of these actions is that of a friend of the U.S, but they all serve Fidel Castro's destructive agenda.
The case of the Cuban dissident denied the visa last December is particularly disturbing. The dissident was a Cuban doctor who objected to fetal stem-cell research on moral conscience grounds. She sought a visa to visit her grandchildren in Argentina. Castro knew very well what that was about and demanded Argentina reject her request. A showdown followed and the doctor took refuge in the Argentine embassy. But suddenly, Argentina declined to issue her the visa and unexpectedly forced the woman back to Castro's henchmen.
To get Argentina out of its Castro orbit, (and save our alliance with Italy) the U.S. needs to be more forcefully hands-on in resolving fairly Argentina's debt issue. It also must unequivocally warn Argentina about its growing ties to Castro. Otherwise, we will watch an anti-American alliance strengthen, with Castro the kingpin.
Argentina is choosing sides, and it's not choosing ours.
A.M. Mora y Leon
I loved going down there. Loved the people, the food, the culture.
They have such a wealth of natural resources and a relatively low population, but they just can't ever seem to get it together. Under Menim, they apeeared to be tentatively headed in the right direction, but then it all fell apart when the peso crashed.
Huh? The US gets treated worse than this all the time.
Russia, Britain, France, Germany, Japan, etc., all owe us money from WW2. And what do the Europeans owe us from bailing them out in Serbia and Kosovo?
I know what you mean my friend... I was there for two months in the July and August of 2003, and the people there are so misguided. Along with the poverty that accompanied the peso's crash, came the socialists, the communists, the isolationists, and every other backward political group. To see that they are aligning themselves now with Castro and Chavez doesn't speak well to their future, nor does it point towards a vacation spot hospitable towards Americans. I guess I will have to try Montevideo, though Uruguay doesnt look to be much better these days. Cheers!
If you earned it here...$$$ spend it here...$$$. Screw them!
Sorry for the double post... damn that is annoying.
That's one of the big problems right there. Not mentioned is the fact that the visit last week was for a meeting of Latin American socialist nations, a sort of summit, which was attended by everyone you would expect. And the person who came to South America two weeks ago to meet all the participants was Spain's hard-left socialist PM, Zapatero, who announced the formation of an "axis" of Spain and Latin American socialists, including Brazil, Argentina, Chile and the newly socialist Ecuador. This, of course, is essentially led by Castro and the "Bolivarian revolution" of Chavez (to whom Spain is supplying naval vessels).
Kirchner seemed to get a lot of praise, although Lula got booed for not being populist enough. Poor thing.
Actually, IMHO their problems started during Mr. Menem's 1992 re-election campaign, when he engaged in a drunken orgy of government spending to buy votes, undoing four years of tight fiscal discipline. That would've been forgivable if he had resumed discipline after re-election, but government spending never went back down. After several years investors decided (not without reason) that Argentina was reverting to form, and began to exit. You could see the writing on the wall by the late 1990s.
With the exception of Chile and maybe a handful of other countries, S. America is going Chavez. They'll regret it in ten years, but they feel right now like globalization burned them. I wonder what the chances are of the lefty Mexican part (PRD? I can't remember) winning their next election, and bringing Chavezonomics right to the Rio Grande.
The Argentines have always seemed to be distressing, but then that may be a more Brasilian perspective. Isn't their economy (Arg's) rather drastically pegged to the dollar ("dollarized")?
Always an interesting spot on the globe...
Well, there go my plans to visit Buenos Aires. Rio might still be fun. You think?
As for alignment with Castro, something else is in the wind IMHO. Everyone thinks Fidel is going to die soon so it seems that others are jockeying for his international position and reputation. We'll see what happens after Fidel's funeral and a general revolution against tyrany in Cuba begins. I've been to Havana and know how those people yearn for freedom.
I wouldnt abandon your plans to go to Buenos Aires just yet. It still is an amazing place, which I plan to go back to as soon as possible. Brazil has a lot of crime, whereas B.A., despite their poor economy and related poverty, is still much cleaner, safer, modernized, etc.
No! Go ahead to Argentina and avoid Rio. It's the most dangerous place to visit on the continent! My buddy just returned from Rio and was told to look out for muggings. He was mugged anyway. Brazil is a violent place and dangerous for Americans.
Thanks for the travel advice. Safety is a big concern, as I like to travel alone.
I don't know if that has deteriorated since the peso crashed, though.
Thanks, Allegra. You certainly do get around!
I met a fellow at church who works for NASA and is on loan to the Argentine Space Program. Yes, they have one and will soon launch a satellite. He says that BA is still pretty much a sure bet for a delightful and safe vacation but declined to predict the future.
I've traveled quite a bit in Europe, Asia and Turkey, which is as much Middle East as I'm up for, but have never been to South America. Have any other suggestions? I tend to like cities better than scenery.
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