The Falklands are once more set to be the centre of a dispute between Argentina and the United Kingdom if Argentina does not recover from its economic woes. Fears of possible new tensions rise with a president that is seeking to divert attention and use the Falklands to refocus the Argentine mindset.
The Falkland Islands, a long standing source of historical tensions between Argentina and the international community, are once again poised to be the centre of disputes, owing to Argentina’s growing economic troubles. The economic stagnation present echoes the same troubles that led to the 1982 conflict, and its purpose as a means of distracting the Argentine people from the economic stagnation. Today’s Argentina may once again be digging up old disputes in the region, to distract from the economy, and access the region’s resources to repair its economy.
The 1982 Falklands War failed to quell long-term Argentine ambitions, and these have once again resurfaced since lying dormant. Recently, President Alberto Fernandez announced policies relating to the strengthening of claims towards the sovereignty of the Falkland Islands. At the 75th UN General Assembly, he called on the UK to resume negotiations that have gathered dust for 55 years. This action represents Fernandez’s peaceful intentions for the Falklands, but this has elicited little response from British MP’s but garnered praise by domestic campaigns of anti-occupation especially in the Tierra del Fuego region. Fernandez has made clear his intention to advance claims of sovereignty over the Falklands, tweeting “(we will) claim our sovereignty and shout forever, Argentine Malvinas”. On the surface 1982 and 2020, share many of the same key factors for Argentina, but this comparison must be taken less literally. This analysis will avoid the pessimistic prognosis that 2020 will result in the invasion of the Falklands, instead it is more likely that Argentina will seek a peaceful solution. The desires within Argentina to once again dispute the Falklands is evident; and key to understanding the potential results of these claims are comparative economics.
1982 and Argentina’s Great Depression
To understand today’s situation, it is worth illustrating the context in which the 1982 war was fought. Economic stagnation in the previous decade created a slump in the Argentinian economy resulting in hyperinflation. By 1982, the economic depression resulted in a massivebanking crisis, leading to defaults on the foreign debt. Employment declined by 36%, and Argentina saw the decline of its currency resulting in higher taxes and soaring foreign debt. The Argentine government saw subsequent declines in its approval ratings and civil unrest. This resulted in the ‘dirty wars’, where the government hunted down political dissidents, and some 30,000 people disappeared.
The military government led by Leopoldo Galtieri attempted to divert the Argentine people away from the growing economic depression and attempt to stem the issue by reclaiming the Falkland Islands. The internal instability meant that the government was on the verge of being toppled; the Falklands acted as a unifying factor that diverted people’s attention away from the economy and the acts of the government. Galtieri presumed there would be little international intervention if Argentina did attempt to occupy the disputed territory and therefore the risk was perceived as low. However, the international community reacted against, and subsequently repelled the Argentine occupation of the Falklands, causing the eventual end of the Galtieri regime. The occupation did little to resolve the issues faced by Argentina and resulted in a further loss of faith in the government, and Galtieri’s fall.
2020 and Argentina’s Economic Slump
Today’s Argentina has a strong economic resemblance to that of 1982. Financial turbulence in 2018 decreased the value of the Argentine Peso and saw annual inflation rise over 50%; one estimate suggests up to 45% of the nation will be in poverty by the end of 2020. The country was headed towards its ninth sovereign debt default before creating a $65 billion restructuring program, but the economy is still predicted to contract a further 12.5%. Since nationalistic tendencies towards the Falklands still exist, the economic and political situation in 2020 appears markedly similar to the context which produced the 1982 invasion. However, one key difference in today’s rhetoric is the centrality of resources in the area, serving as an economic lifeline.
Reports of an estimated 60 billion barrels of oil in the area evidently provide a potential economic carrot for Argentina; and the stick of possible unrest due to economic pressures continues to push Fernandez towards taking a serious stance towards the Falklands. He has thus already sought to reopen negotiations surrounding the sovereignty of the islands.
The unrest in Argentina is currently limited to minor protests and a 20% drop in government approval ratings. Approval ratings will play its part in the policy towards the Falklands, if there continues to be a sustained decline in the approval of the government then the situation is likely to worsen, however at this stage this situation remains distant. As people become more disgruntled with the economic downturn, the government is likely to seek the refocusing of discontent towards something other than itself.
A non-military solution
The developments within Argentina’s economy means that the Falklands will likely be more important for the Argentine government to survive the economic and social fallout of a recession, compounded by the global pandemic. The chances of an invasion are so far unlikely, due to the existing UN Resolution on the issue. The Fernandez regime is therefore looking to restart negotiations, but this approach currently lacks any international backing or interest from the UK. It seems that in the meantime, Argentina will seek alternative avenues to push the issue. The developments thus far have focused on fisheries and the maritime space around the Falklands, such as the introduction of sanctions on illegal fishing in Argentine maritime space, specifically targeting parts of the Falklands maritime space. The islands rely heavily on the export of squid, therefore the sanctions aim to disrupt this economy and curtail the profits of Falklands fishing. This has resulted in no major response from the UK government in relation to the sanctions and may be signs towards Fernandez testing the waters for a UK reaction. Further sanctions could be placed around the region to gauge the reaction of the UK and its international partners.
In the event that Argentina pursues a more direct policy towards the Falklands, the United Kingdom is likely to defend its territory. One way it would retaliate against Argentina would be with sanctions on soybeans and similar products that make up the majority of Argentine/UK relations. Additionally, the $3 billion investment in Argentina, that was designed to support trade and the Argentinian shale industry would be retracted by the UK, further damaging production in Argentina. The introduction of sanctions and the removal of foreign investment would see further damage to the Argentine economy, resulting in further issues in its GDP and levels of poverty.
It has been made clear by the UK that it would rely on the opinion and defend the rights of the people of the Falklands. This has been upheld through referendums on nationality and sovereignty, and sentiment between the Falklands and the UK does not seem to have changed in nearly 40 years. The UK is more likely therefore to retaliate to bold advancements made by the Argentine government towards the Falklands, because it believes it is upholding the will of the people – 99.8% of whom voted to remain a British Territory.
Risks?
The similarities between 1982 and 2020 are remarkable; further economic decline risks further damaging of Fernandez’s approval ratings, and as current rhetoric suggests, he may seek to right this through once again contesting the Falkland Islands. The outcome from the Argentine government will more likely focus on a more peaceful stance than its 1982 counterpart. The continuing economic decline will only harden Fernandez’s stance on the issue, while remaining on the positive side of peace. A hardened stance from Argentina will likely be felt across Latin America as sanctions from the UK ripple outwards from Argentina.
Fernandez has seemingly learnt from the mistakes of the Galtieri government despite facing similar economic troubles. He has claimed that it would be impossible for Argentina to militarily retake the Falklands and suggested he would review the 2016 UK-Argentine joint agreement, during the electoral campaigns in 2019. The renegotiations of the agreement would likely focus on the demilitarisation of the Falklands and developments in joint access to the oil reserves.
It is likely that if the reopening of negotiations fail through disinterest by the UK and UN, Argentina will continue to roll out new policies seeking the inclusion of the Falklands into Argentine sovereignty. These would likely take the form of sanctions on the region and continued international campaigning. These campaigns are likely to provide Fernandez with domestic support, and possibly regional support from post-colonial states such as Venezuela and Bolivia who are inhabited by anti-colonial governments.
A renewed interest in the region is unsurprising, and it is likely from the events in Argentina that Fernandez will seek peaceful diplomatic negotiations to the Falklands issue before seeking more aggressive policies. In 1982, the solution that the government sought after was distraction and the military occupation of the Falklands. Today’s government is primarily focused on a solution that relates to peace, and economic recovery.
