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 Argentina steps up pressure on UK over Falklands 

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 As the 30th anniversary of the Falklands War approaches, Argentina has adopted an increasinglyassertive strategy of regional diplomacy and economic pressure to draw attention to its long-running rowwith the United Kingdom over the islands. The dispute over the desolate archipelago in the South Atlantic,

inhabited by about 3,000 people and 600,000 sheep, is no longer just a matter of national pride over avestige of empire. It is being cast by Buenos Aires as a high-stakes scramble for substantial oil reservesthat are believed to lie beneath the waters surrounding the islands.

The government of President Cristina Kirchner is seeking to pressure the UK government into acceptingnegotiations over the sovereignty of the islands. But unlike 1982, when invading troops were driven out bya British task force, Argentina's current strategy is focused not on military deployments but on diplomaticand economic initiatives. Buenos Aires hopes to harness the emerging global clout of Latin Americancountries to strengthen its position. However, the steps it has taken so far to embarrass the UK have hadlittle impact.

Las Malvinas, as the islands are called in Argentina, have long been a nationalist cause for Argentineleaders seeking to bolster their domestic political positions. This has been particularly true of the Kirchner era, especially under Cristina, who was elected in 2007 to succeed her husband Nestor (who later died). As the 30th anniversary approaches, she has made a series of speeches and diplomatic manoeuvres in aneffort to draw attention to the issue. Calling Britain a 'crude colonial power in decline', Kirchner said shewould take Britain's 'militarisation' of the dispute to the United Nations after the new destroyer HMS Dauntless was deployed in 2012 as part of a regular South Atlantic naval patrol. Also fanning the populistflames was the routine posting to the Falklands of Prince William, a Royal Air Force search-and-rescuehelicopter pilot who is second in line to Queen Elizabeth's throne.

Oil prospects

In 2010, British company Rockhopper announced the discovery of the Sea Lion oil field 80 miles offshorein the North Falkland Basin, and other companies showed renewed interest in exploring the surroundingwaters. Argentina responded by insisting that ships wishing to transit i ts waters to the islands must obtainits authorisation. In 2011, new evidence reinforced the potential of the oil fields. Rockhopper announcedplans to start production in 2016, with a planned output of up to 120,000 barrels per day. Rockhopper  now projects that almost 450 million barrels can be recovered from its Sea Lion find.

Further exploration projects set for this year will focus on the areas to the south and east of the islands,enabled by the arrival of the Leiv Eiriksson harsh environment rig in January. The waters are deeper hereand the maritime conditions more difficult, meaning that exploring these reserves is more challenging andexpensive, but the prize is even larger. According to a report by Edison Investment Research, the drilltarget for the Southern Basin alone is approximately 8bn barrels.

The Loligo well, currently being explored by Falkland Oil and Gas Limited east of the islands, is expectedto contain 4.7bn barrels, which makes it one of the largest drill targets in the world.

The Leiv Eiriksson rig will also drill two wells for Borders & Southern Petroleum plc in the Southern Basin.The Darwin project, which the company believes holds as much as 760m barrels, is already being dri lled. Afterwards, the rig will move to Stebbing, which has a target of 1.2bn barrels.

These explorations are already raising tensions in the region. On 16 February, citing 'irrefutable satellite

images', Argentine newspaper  Ámbito Financiero said that the Leiv Eiriksson rig along with three supportships had violated Argentine territorial waters by entering its exclusive economic zone.

Until 2007, Argentina and the UK had an agreement under which they pledged to cooperate in exploringthe region's oil resources. The Joint Declaration on Cooperation in Offshore Activities in the Southwest Atlantic was signed on 27 September 1995. The government of Carlos Menem signed the agreement inthe belief that it was central to a peaceful solution to the dispute, but Buenos Aires withdrew in March 2007as the 25th anniversary of the war approached, and as the UK government moved to grant licences for oilexploration around the Falklands.

Diplomatic sparring

 As the economic prospects of the Falklands grew, Argentina launched a regional diplomatic offensive topressure the UK into sovereignty negotiations. It sought to draw neighbouring countries into the dispute byarguing that the British presence was aimed at extracting the South Atlantic's resources and was,therefore, of concern to the entire region. At a December 2011 meeting of the Mercosur  trade bloc (which

includes Argentina, Brazil, Paraguay and Uruguay), Kirchner  said: 'Malvinas is not an Argentine issue, it isa global issue because they are taking energy and fishing resources out of the Malvinas.'

Buenos Aires gained support in the form of public statements during summits of heads of state not onlyfrom Mercosur, but also from the 12-member Unasur (Union of South American Nations), the 8-member 

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 Alba (Bolivarian Alliance for the Peoples of Our America) and the 33 members of the newly formedCommunity of Latin American and Caribbean States. The 34-nation Organisation of American Statesreleased a statement in February reiterating its call for negotiations, and its secretary-general, Jose MiguelInsulza, criticised the UK for adopting a 'bellicose tone' by sending the HMS Dauntless.

Kirchner is not only drawing on a traditional aversion to colonialism, but also on recent advances towardsregional integration. There has been a flurry of summits and trade agreements, and a regionaldevelopment bank, the Bank of the South, has been established. These moves towards a regionalcommunity and identity were spurred on to a large extent by former Brazilian President Luis Inacio Lula daSilva, who forecast that 'South America, united, will move the board game of power in the world.'

Though the measures taken so far by regional organisations have little practical impact, they constitute thestrongest signals of support for Argentina in decades. Individual governments have also taken symbolicsteps: in January 2011, Brazil denied permission for the HMS Clyde patrol ship to dock at Rio de Janeiroduring a Falklands mission, the first time that Brazil had closed its ports to a British ship. However, theClyde was the offshore patrol ship with specific responsibility for the Falklands, and Brazil has continued toaccept port visits from other Royal Navy vessels and is also purchasing three UK-built patrol vessels. InDecember, Brazil and Uruguay agreed to ban from their ports ships bearing the flag of the FalklandIslands, a decision that was followed by Chile and Venezuela. However, this affects only 25 vessels,mostly fishing boats, and the islanders plan to circumvent the ban by adopting the Red Ensign flown by theUK merchant navy. Buenos Aires has also sought to persuade its neighbours to end military-to-militarylinks with the United Kingdom, but has not succeeded in doing so.

On the domestic front, Argentina has taken further steps to isolate the UK. In February, Industry Minister Debora Giorgi asked 20 companies dealing with the UK to replace British imports with goods from 'nations

that respect the territorial integrity' of Argentina. Even if all companies complied, this would cause littleharm to the UK economy, since Argentina accounts for 0.3% of UK non-EU exports.  Argentina also deniedpermission for two cruise ships flying British flags to dock at Ushuaia, because they had previously been toPort Stanley in the Falklands. In addition, islanders complain that the Argentine government is puttingpressure on freight-container companies by threatening to deny them lucrative deals if they continue to dobusiness in the Falklands. According to Falkland islanders, these measures amount to a de factoeconomic blockade.

Expressions of support for Argentina's cause by regional leaders such as Hugo Chavez of Venezuela andRafael Correa of Ecuador (who suggested that the Bolivarian Alliance bloc should impose sanctions on the UK) were important in prompting Brazil – the region's biggest power and a traditional leader of South American integration – to back the diplomatic offensive, even if this risked cooling relations with the UK.Even Chile, which had previously resisted pressure to isolate the islands, joined practically all regionaldemonstrations of support for Argentina, which resulted in a phone call from UK Prime Minister DavidCameron to Chilean President Sebastian Pinera. The head of the Chilean Senate's Foreign Relations

Committee, Eugenio Tuma, said legislators would 'continue to support any action with the aim of persuading the United Kingdom to solve the conflict'.

While evoking its old colonialism argument, deploying the geopolitics of oil and drawing on regionalcooperation, Buenos Aires is seeking to raise the political and economic cost of the UK's presence in thearea. Jorge Arguello,  Argentina's ambassador to Washington, said in an interview: 'We have an objectivewhich is to reduce the margin of British resistance to comply with UN resolutions. We want them [the UK]to become alone and isolated.' While this goal is far from being achieved, diplomatic difficulties have beencreated for London just at a time when it has elevated relations with the region to priority status. ForeignSecretary William Hague announced in January the start of 'Britain's most ambitious effort to strengthenties with Latin America in 200 years.'

The UK has begun what Hague calls a 'strategic dialogue' with Brazil and has set the goal of  doubling bilateral trade by 2015. During a visit in January, Hague reiterated the UK's support for Brazil as a

prospective permanent member of the UN Security Council. However, the rapid pace of regionalintegration means that Brazil and other regional powers are under greater pressure to factor Argentineinterests into their strategic calculations.

Peru is the latest country to give in to such pressures – on 19 March it cancelled a scheduled visit by theType 23 frigate HMS Montrose, which had been taking part in a regular patrol of the South Atlantic.President Ollanta Humala had risked regional isolation if he accepted the frigate, since his position wasseen as contradicting recent agreements and statements on the issue. He also declined an invitation totravel to the UK in April, a visit bound to cause tension because of the anniversary of the 1982 war.

Military assets

 Argentina has been careful to avoid making threats to capture the islands by force, and another militaryconfrontation remains unlikely. Though it has capable special-operations teams, the majority of its heavymilitary equipment still dates back to the 1970s and 1980s. The navy constructed ten new surfacecombatants, as well as two new submarines, in the mid-1980s, all based on German designs, but therehave been few changes to its inventory since then. The air force and naval aviation combat inventories arein even worse shape, with the only major acquisition post-1982 being 36 modernised versions of the 1950svintage A-4 Skyhawk .

If any hostilities did take place, the Argentine military would find the British military garrison – as well ascivil security capabilities – far  stronger  than they were in 1982. The Falklands is now home to an army

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infantry company, a Rapier surface-to-air missile battery, four Typhoon fighter aircraft and a significantlyimproved air-surveillance capability. At sea, in addition to the resident patrol vessel HMS Clyde, the RoyalNavy also has the auxiliary tanker RFA Gold Rover and the Type 45 destroyer HMS Dauntless in theSouth Atlantic. As well as superior heavy equipment, the British armed forces have surveillance assets,precision-guided weapons and substantial recent experience of combat that would have a significantimpact against Argentina's outdated capabilities. This presence is intended to reassure the Falklandislanders – who have clearly signalled their intent to remain part of UK overseas territories – as well as todeter Argentina.

The UK, however, is in the midst of a programme of defence spending cuts that have deprived it of maritime patrol aircraft and, for the next decade, an aircraft carrier. A number of former top military officers

have expressed concern that, if Argentina were to capture the Falklands, Britain's weakened armed forceswould be unable to take them back. The response of British defence officials has been to state that they donot envisage any scenario in which the Falklands would have to be recaptured. Certainly, given thesuperior UK capabilities and experience, it would now be a much greater challenge for Argentina to invadesuccessfully. In addition, an Argentine attack would undermine the Kirchner government's attempt toportray the British as twenty-first-century 'colonialist' aggressors, making an invasion not only strategicallyunwise, but also politically counter-productive.

Brazil's pivotal role

The recent diplomatic and economic offensive by Argentina has had little impact so far, and its moves atthe UN are unlikely to change the strategic picture. That is why Kirchner has insisted on framing thedispute as a resource conflict and intensified her calls for regional backing. While Argentina has wonlimited support, there seems to be an element of lip service being paid. But the strategy might work if Kirchner can persuade other regional heavyweights, especially Brazil, to get involved in the dispute. Brazil

is showing a greater interest in the South Atlantic, which was listed as a priority in the latest NationalDefence Strategy. Petrobras, Brazil's state-owned oil giant, has teamed up with other companies to drill off the southern Argentine coast, though a well drilled last year proved dry. Brazilian President Dilma Roussef last year  branded UK oil exploration in the region 'illegal activities'. Since Argentina has employed aregional strategy aimed at isolating London, Brasilia has become a key battleground in the long-runningdispute.

Volume 18, Comment 11 – March 2012

Copyright © 2012 The International Institute For Strategic Studies

The International Institute For Strategic Studies