Argentina and the Axis of Evil

Patricio Navia

Buenos Aires Herald, April 24, 2012


In the eyes of politicians in the United States, the nationalization of YPF-though partial and only directed against REPSOL-has put Argentina squarely in the Latin American axis of evil. Together with Cuba, Chávez in Venezuela and Evo Morales, Cristina Kirchner (CFK) is now considered a full member of the anti-American group of Latin American leaders. Ironically, by caricaturing the Argentine president as another Chávez, conservatives in the US will help her accumulate additional domestic political benefits from her controversial nationalization initiative.


Americans have not been paying attention to developments in Latin America. The old Cold War logic still prevails when dealing with Cuba and, by extension, with Venezuelan Hugo Chávez. Although the US has moved forward with free trade agreements with Central American countries, Dominican Republic, Chile and Peru in the last decade — and relations with Colombia continue to be strong — the perception in Washington is that Latin America does not have anything relevant to offer the US. With the occasional exception of Brazil, Washington continues to see Latin America as a backyard region and an irrelevant player in world economics and geopolitics.


The prevalent oversimplification in the US is that there are two groups of countries in Latin America. The good ones promote market-friendly policies and have a fluid relation with the US. Governed by left or rightwing leaders, those countries are moderate and pragmatic in their policies. Mexico, Chile, Colombia and Brazil are atop this list, with most Central American countries, Peru and Uruguay also in the group. The other group comprises the Latin American axis of evil. Led by Cuba, Hugo Chávez and Evo Morales, this group also includes Nicaragua, Ecuador and Paraguay and, most recently, Argentina.


In the highly polarized American political scene, foreign affairs are also seen through the oversimplified lens of friends and foes. Because much of the policies toward Latin America are still influenced by Cuba, a pending legacy of the Cold War, it is easy to extend the dichotomous logic to the entire region. Rather than taking the time to understand the complexities of the political and economic evolution of different Latin American countries, many American politicians and pundits are simply dividing Latin America between the market-friendly good and the statist and protectionist evil.


It is unfortunate that the decision by CFK came right after President Obama’s recent trip to Latin America. True, there was not much interest in the trip anyway. In fact, the visit generated more news for a prostitution scandal involving members of the secret service than for any of the announcements made at the 6th Summit of the Americas. The US firm position against supporting Argentina’s diplomatic push to make its claim over the Malvinas Islands, a hemispheric priority, simply confirmed the distance that exists between Washington and Buenos Aires. Thus, it would be unfair to blame CFK’s recent decision for the coldness of bilateral relations between the US and the country that 20 years ago claimed to have “carnal relations” with Washington.


However, being distant should not lead to carrying out a strategy that will widen the gap between both countries. There are good reasons to oppose and criticize the decision to nationalize YPF hastily made by the Argentine government. The move will not solve Argentina’s energy problems. It will likely exacerbate price distortions and will ultimately hurt productivity and competitiveness. Moreover, it will make it far less likely for FDI to return to Argentina.


Still, it would be unfair to lump Argentina together with the other countries that comprise the Latin American axis of evil. Unlike Cuba, Argentina is a democracy. Unlike Venezuela, CFK is the leader of a previously existing political party that will certainly still exist when she is no longer around. Elections in Argentina are competitive, and the opposition — though weakened and divided — has far more guarantees than the opposition in Venezuela. Institutions and civil society are also stronger in Argentina than in Venezuela.


In recent months, CFK has shown a special ability to transform life events-such as her husband’s untimely death-into political opportunities. She has rallied Argentines behind the patriotic agenda of recovering the Malvinas. She has transformed the nationalization of YPF into a reassertion of Argentina sovereignty. Now that critical voices in the US have wasted no time to compare her with Hugo Chávez and the Cuban authoritarian government, CFK will most likely react by reasserting national sovereignty and criticizing US imperialism. There are few better opportunities to score cheap political points in Latin America than to rally nationalist sentiments to respond to exaggerated and inaccurate criticisms coming from the US.


The Argentina government needs to combat the negative effects of growing inflation and expectations that a new economic crisis is brewing. The caricaturing of recent events in Argentina done by conservative politicians and pundits in the US is giving CFK an invaluable opportunity to transform the nationalization of YPF from a questionable decision from an economic policy viewpoint into a reassertion of Argentina sovereignty and a valiant stance against foreign imperialism.