March 15, 2012 7:38 pm

Future of the Falklands: Remote prospects

As Argentina reasserts its claim, a big discovery of oil would rapidly alter the stakes

As an 18-year-old marine, Mario Puente was one of the first to disembark in the Falklands when his native Argentina invaded in 1982. This month he is going back to the islands – to fight his ghosts.

He will return to the battlefields he still has nightmares about, 30 years on, armed this time with running shoes, not a rifle. The war, he says, “scarred me for life” and the Standard Chartered Stanley marathon he is to run on Sunday – in a T-shirt with Argentina’s blue-and-white flag on one half, the Union Jack on the other and a symbol of peace in the centre – is an attempt to close old wounds.

Falkland Islands map Thumbnail

Falkland Islands map Thumbnail

Far from healing, however, the rift over the Falklands is as wide as it has been since that brief but bitter clash claimed the lives of 649 Argentine and 255 British troops. Fuelled by patriotism ahead of the conflict’s 30th anniversary on April 2, Cristina Fernández, Argentina’s president, has exerted its almost 200-year-old claim with ever increasing vigour.

While eschewing the use of force, she has redoubled diplomatic efforts at the UN, tightened the economic screws on the islands and won unprecedented regional support in her bid to embarrass Britain for what she calls its “anachronistic colonialism”.

Over the past three decades, the Falklands have been transformed from an impoverished outpost into a prosperous, self-governed settlement that posted a budget surplus last year. Apart from thriving fishing and tourist industries, the islands potentially offer large offshore oil riches too – giving their future a significance that transcends a mere bilateral squabble over a small scrap of territory.

Britain, while sensitive to the colonialist jibe as it tries to expand trade ties with booming South America, has stoutly dismissed Argentina’s claims; the idea of giving ground is unthinkable. London maintains a prominent military presence on the islands, which it describes as a UK dependency. David Cameron, prime minister – who came of age during the era of Margaret Thatcher, his predecessor who had waged the battle – insists on the right to self-determination for the Falklands’ 3,000 islanders, many of whom trace their ancestry back to the establishment of a British colony there in 1833.

The view from Port Stanley: Dream scenario as an emergent nation

What might the Falkland Islands be like in 30 years’ time? It is an increasingly relevant question for the 3,000 or so inhabitants of the windswept South Atlantic archipelago, writes John Fowler.

Once again, they find themselves in the thick of a battle – although fortunately, it is only diplomatic salvoes that are exploding over their heads this time, unlike the rockets and rifle fire that followed the Argentine invasion and subsequent British liberation 30 years ago.

There is a worst-case scenario. Despite British protests, international opinion in that eventuality accepts the Argentine view that the islanders do not qualify for the right to self-determination, although this entitlement is enshrined in the UN charter. Egged on by persistently shrill claims from Argentina, the Falklands then become forever Las Islas Malvinas. All this happens without a shot being fired. But the original, largely British inhabitants soon leave. Few Argentine citizens can be found to live there and the colony falls quickly into neglect.

Alternatively, there is a dream scenario. The islands’ government petitions successfully for independence at the UN. The new official status as an emergent nation rather than a “colonial anomaly” allows both London and Buenos Aires to bow out of their long-running battle and accept a draw without loss of face.

The two governments sign a binding agreement to protect the rights of the new country – which will already have proved its administrative mettle thanks to sound management of new oil revenues and a well-regulated population expansion.

To avoid reopening historic wounds, the Falklands’ legislative assembly decides, after public consultation, to rename the islands South Atlantica. Also after public consultation, and in acknowledgement of historic roots, the British monarch, now perhaps King William, remains titular head of state as in Australia, New Zealand and Canada. (To make this easier for Argentina to stomach, it is agreed that the national flag will contain some pale blue and white stripes).

Neighbourly co-operation with Argentina over issues of mutual interest, such as fish stocks and the exploitation of hydrocarbons, then allows Argentina many profitable opportunities for direct participation and partnership in the exploitation of the region’s resources. Everybody lives happily ever after.

The writer is deputy editor of Penguin News, a Falklands weekly

The issue has ricocheted between the two countries and up to UN level, where Ban Ki-moon, secretary general, says he is “concerned about the increasingly strong exchanges” between London and Buenos Aires. In one December incident, after Ms Fernández rallied neighbours to deny port access to Falklands-flagged ships, Mr Cameron jeered back from the House of Commons: “So who is being colonialist now?”

To many outsiders, all this is an absurd escalation of a squabble between people who rubbed along quite nicely before the conflict. Though Falklanders drive on the left and visitors often find the islands a quaint, windy bit of seaside Britain complete with red telephone boxes and fish-and-chip shops, it was YPF, Argentina’s former oil monopoly, that built the runway at Port Stanley airport. Lade, the Argentine state airline, once flew to the Falklands. Sick Falklanders used to go to hospital in Patagonia. Buenos Aires sent in teachers.

Argentina’s resurgent patriotism can also seem especially perplexing given how some veterans complain they have been treated. Adrián Marroni and Gustavo Sekula are among the 400-odd former servicemen who man a makeshift camp in Plaza de Mayo in front of the capital’s government palace to demand war veteran pensions they are currently denied because during the conflict they were deployed within Argentina rather than on the islands.

“I just want them to give me back the honour I had when I was 18 and went off to defend my country,” says Mr Sekula. “We thought we were going to make history,” adds Mr Marroni. “But when we came back, no one would employ us. They blamed us for losing the war.”

Banging the nationalist drum may help Ms Fernández to divert attention from the deteriorating domestic economy (a charge that can also be levied at Mr Cameron). But Argentina’s claim is also enshrined in the constitution, taught in kindergarten, emblazoned on road and shop signs, commemorated on postage stamps and widely supported without question. The symbolism runs deep.

“There is a belief in Argentina that after so many years of getting nothing, exerting pressure now might at last get them something – even if it is only British embarrassment,” says Hal Klepak, a professor at the Royal Military College of Canada.

Ms Fernández, a skilful politician re-elected by a landslide in 2011, also has little to lose, and possibly much to gain, from pursuing the issue. In 1982, Latin America was economically on its knees, beholden to conditional western aid and reluctant to support an attack by Argentina’s military dictatorship. Today, Argentina is a democracy, South America’s economies are surging and neighbourly support has been more forthcoming from a region that feels increasingly assertive on the world stage.

Such solidarity pays domestic dividends too. Only last month, when Ms Fernández summoned lawmakers to a Falklands speech held in the symbolic Hall of Latin American Patriots, she was applauded by leading opposition politicians – and promptly vowed to take them with her to a UN decolonisation committee meeting on June 14, ironically the anniversary of Argentina’s Falklands surrender.

“Her government is at the height of its power now,” says Laurence Allan, Argentina analyst for IHS Global Insight, a risk consultancy. “But it no doubt has its eyes on 2013 midterm elections, aware that afterwards the political balance could change.”

Interactive map: the Falkland Islands

Falkland Island

Explore the economic and political set-up of the islands

Most importantly, there is the increasing attractiveness of the South Atlantic islands themselves. The dream of finding significant reserves – a “North Sea in the South” – is central to why the issue has flared up again, says Jorge Taiana, an Argentine former foreign minister. “That’s the obstacle.”

Rockhopper of the UK says it may have found 500m barrels of recoverable reserves to the north of the island cluster. Two other British companies are exploring more speculative but potentially more rewarding geological formations to the south. A big oil discovery would bring in substantial revenues. For Argentina, where a capricious energy policy has deterred investment and crude output is sinking despite its own untapped oil riches, co-operation should on the face of it be of benefit. Instead: “I think Argentina will do all in its power to hinder this oil development,” says Mr Taiana.

Indeed, Ms Fernández has blacklisted groups involved in oil exploration around the islands from working in Argentina. Débora Giorgi, industry minister, this year called on Argentine companies to stop importing British goods. Two cruise liners were refused permission to dock after visiting the Falklands.

Though Ms Fernández has stopped openly threatening to bar from Argentine airspace the weekly commercial flight by Lan from Punta Arenas in Chile, she wants to replace it with scheduled flights from Buenos Aires. That would be a first since the conflict, but would leave the islands’ sole air link under Argentine control.

Argentina defends its restrictions as a response to what it calls Britain’s “militarisation” of the South Atlantic and the provocative dispatch there last month in military garb of Prince William, the Queen’s grandson. London, some 8,000 miles away, says the prince is on a routine six-week tour of duty and the only reason for the military presence is because Argentina invaded in 1982. The result is a stalemate – with little help offered by the ambiguous history of the islands, which were intermittently settled by France, Britain and Spain.

The essence of Argentina’s claim is that it inherited the islands, which it calls the Malvinas, from its own colonial master, Spain. The basis of the UK claim lies in the regular British colony flag that set up in 1833 and the right of the community that has lived there ever since to determine its fate.

London spends £75m a year, or 0.5 of its defence budget, to uphold this principle. Militarily it fears it would be hard to retake the islands after a surprise attack. Yet analysts also agree Argentina’s military is in no shape to mount a successful invasion. “If British projection of its armed forces has fallen over the past 30 years, in Argentina it has virtually disappeared,” says Prof Klepak.

To Buenos Aires, Britain’s attitude seems that of a fading power clinging to the vestiges of empire. The islands, say Ms Fernández, are not “an Argentine cause but a global cause, because they [in Britain] are taking our oil and food resources”.

A big oil discovery could shift attitudes in a region imbued with resource nationalism. But until that happens, UK officials insist trade prospects remain unharmed – though they concede there is a growing opportunity cost. “We have to spend a lot of time, effort and scarce resources explaining our position,” says one.

Argentina’s neighbours meanwhile “zigzag” around the issue, as a Chilean newspaper editorial puts it. José Mujica, Uruguay’s president, backs island visits by businessmen, saying that while he respects Argentina’s “historic rights” he does not like “to isolate people, and doing that commercially achieves nothing”. Brazil offers token support to Argentina while eyeing the main prize: a permanent seat on the UN Security Council, which the UK backs.

Ms Fernández speaks eloquently of the importance of UK-Argentine negotiations. Yet Argentina has walked away from areas of practical co-operation, such as fishing or charter flight connections, and insists sovereignty talks must come first.

So the stalemate looks set to continue – a headache for the UK, an unrequited cri de coeur for Argentina and an irritant for stoic Falklanders, who resist being squeezed out of attempts to carve up their fate. “We are very British and we are very independent,” says Barry Elsby, a member of the local legislative assembly.

Mr Puente, the marathon runner, says his government is making a mistake. “You get further with seduction than confrontation,” he says. “You can’t keep quarrelling for 30 years. One day you have to shake hands.”

Additional reporting by Arash Massoudi

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