Obama's Latin America Envoy Gets An Earful In Argentina
December 18 2009 - 5:31PM
Dow Jones News
President Barack Obama's senior Latin America diplomat came to
Argentina this week determined to listen, and left with an
earful.
"I want to stress again that the purpose of my trip is not to go
down with a series of specific issues that I want to explore,"
Arturo Valenzuela, assistant secretary of state for Western
Hemisphere affairs, said before leaving Washington for a trip which
also included Brazil, Uruguay and Paraguay. "I want to listen."
Talking to local press in Buenos Aires as his trip was wrapping
up Wednesday, Valenzuela relayed some criticism he'd heard from the
representatives of U.S. companies about the local investment
climate. That triggered a ferocious response from the Argentine
government that has been front-page news for the last two days.
The episode highlights the difficulty of diplomacy in a region
where attitudes toward the U.S. can often be ambivalent,
particularly among the more populist administrations, including
Argentina's.
On the one hand, they blame the U.S. for many of the region's
historical woes and most recently for triggering the global
financial crisis. On the other hand, after frosty relations with
former President George W. Bush, many are trying to figure out how
best to handle their relationship with Obama, who's often viewed
more favorably in local opinion polls.
Valenzuela's meetings earlier this week with a number of senior
government officials went off without a hitch, as did discussions
with opposition leaders. It was during a session with local
representatives of U.S. companies that Chilean-born Valenzuela, who
held the same job as the top Latin America diplomat for President
Bill Clinton, said there was a different tone.
"I noticed a change: In 1996 there was much more enthusiasm and
intentions to invest; today I heard concerns about legal insecurity
and concerns about economic management; unless there are changes,
the expected investments can't be carried out," he told local press
on Wednesday.
In many respects, that's unsurprising. Argentina was booming in
1996, and private-sector investors piled into privatizations as the
government withdrew from large parts of the economy. Yet pressures
were already starting to build, particularly with regard to the
heavy debt load. In 2001, the country's economy collapsed, leading
to the largest debt default in history.
A remarkable recovery followed, helped along by massive
government subsidies and a windfall from international commodities,
mainly agricultural, which are a major source of revenue for
Argentina. Until the global crisis broke, stellar economic growth
eclipsed most figures from the 1990s.
Yet private-sector investments have lagged, and many companies
have pointed to fears about the expanding role of the government
and the autocratic nature of decision-making. The government has
leaned heavily on companies in a number of industries through price
controls and imposed punitive export quotas and tariffs to
guarantee domestic supplies.
The government, however, disagreed, accusing the U.S. official
of interfering in Argentina's internal affairs.
"Valenzuela has enormous preconceptions about our country and
that isn't good," said Anibal Fernandez, cabinet chief to President
Cristina Fernandez, who bears no relation. "There is no legal
insecurity in this country."
Fernandez had met with Valenzuela, and he said the two had a "a
very good discussion" about issues such as terrorism and narcotics
trafficking. Fernandez said questions about Argentina's regulatory
framework weren't raised.
"Recently I met with the chamber of companies from the United
States and they only brought routine things to my attention,"
Fernandez said. The AmCham declined comment for this article.
Other Argentine officials joined in, including the former
president and husband of the incumbent, Nestor Kirchner, Interior
Minister Florencio Randazzo and the Argentine ambassador in
Washington, Hector Timerman.
Some Argentine commentators were mystified by the government's
harsh reaction to the words which, compared with the bitter barbs
often thrown around locally, were relatively innocuous.
Valenzuela's appointment provides a "great opportunity" for the
Argentine government to improve its dialogue with the White House,
said Rosendo Fraga, a political commentator, in a column in the La
Nacion newspaper. That was wasted, and "it's not clear why," he
said.
-By Matthew Cowley, Dow Jones Newswires; +54 11 4103 6740;
matthew.cowley@dowjones.com
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