Tag Archives: Nationalization

CFK – a latter day Nasser?

Logotype of the former Yacimientos Petrolífero...

It’s struck me that the Argentine President Cristina Fernandez Kirchner has been behaving in a very similar manner to Nasser, the Egyptian leader who nationalised the Suez Canal in 1956.

Earlier today the Argentine Senate backed the nationalisation of the oil company YPF, even though a controlling stake is owned by the spanish company Repsol. Obviously, this has drawn negative reaction from Spain, the European Union and the World Trade Organisation. Unilateral nationalisations don’t tend to go down too well in a free market world. And all this comes just weeks after CFK announced that Argentina would be seeking international support over their Falklands claims,  in particular targeting Spain who it was felt might sympathise due to the Gibraltar issue. Nobody in their right mind will want to invest in Argentina – why would you, if you would always be looking over your shoulder, wondering whether your investment is going to go into CFK’s slush fund? It’s not the kind of thing that the US smiles upon. And whether we like it or not, US influence over what goes on in the world is crucial, in particular when it comes to lending support over disputes such as the Falklands.

Now, you won’t often hear pro-capitalist commentaries on this blog. In fact, in theory I am not a fan of so-called free-trade, which seems more like a banner for freedom to exploit. But, thinking about it from an Argentine point of view, I really don’t get what she is trying to achieve. It’s not very pragmatic at all. You can’t ask a country to support you on the one hand, and then nationalise the interests of a major company on the other. Not only will such actions dent Argentina’s image abroad, but it also gives an impression of an inconsistent and unpragmatic administration, trying to have their cake and eat it. It also reinforces perceptions among some Latin American countries that CFK is taking Argentina too far down a socialist path, in a very Chavez-esque manner.

The funny thing is, the nationalisation of YPF seems to have gone down a storm in Argentina. Does it not occur to the Argentina populace that they are being played like fools? One has to look beyond the flag-waving, nationalist aspect, and look at the longer term impact, which can only be harmful to Argentina in the long run. The YPF issue shows just how fickle and populist Argentine politics can be. Substitute ‘YPF’ for ‘Falklands’, and you can see a pattern – President plays for the popular vote, everyone comes out waving flags, but in the long run it doesn’t work out.

I suspect that if Britain can ride out this current Falklands hysteria that CFK is whipping up – almost in a ‘Keep Calm and Carry On‘ style – then sooner or later she will be gone, and a slightly more sensible and mature leadership in Buenos Aires might realise that the same populist agitation that gets them elected also isloates Argentina, quite needlessly.

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