Identifier
Created
Classification
Origin
05BUENOSAIRES68
2005-01-10 15:07:00
CONFIDENTIAL
Embassy Buenos Aires
Cable title:  

SCENESETTER FOR CODEL DODD

Tags:  PGOV ECON SNAR AR 
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C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 000068 

SIPDIS

STATE FOR H (JREDDY AND KGATZ) AND WHA/BSC

E.O. 12958: DECL: 01/07/2015
TAGS: PGOV ECON SNAR AR
SUBJECT: SCENESETTER FOR CODEL DODD

REF: STATE 04 274600

Classified By: Ambassador Lino Gutierrez for reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 000068

SIPDIS

STATE FOR H (JREDDY AND KGATZ) AND WHA/BSC

E.O. 12958: DECL: 01/07/2015
TAGS: PGOV ECON SNAR AR
SUBJECT: SCENESETTER FOR CODEL DODD

REF: STATE 04 274600

Classified By: Ambassador Lino Gutierrez for reasons 1.4 (b) and (d).


1. (C) Summary: Ambassador Gutierrez and the Embassy
Buenos Aires country team warmly welcome CODEL Dodd to
Argentina January 12-13. During your stay in Argentina you
will have the opportunity to speak with senior Argentine
officials and experts on a range of political, economic and
counternarcotics issues. Your visit comes at the beginning
of a year in which Argentina will seek to consolidate its
impressive economic and political recovery from the 2001-2002
crisis. Indeed, during your visit, Argentina will launch its
long-awaited restructuring of over USD 81 billion of private
debt following the largest sovereign default in history. A
successful debt restructuring will be a key component in
reintegrating Argentina into world capital markets. On the
political front, President Kirchner, while maintaining
remarkably high approval ratings, will be looking to
consolidate his own position within the ruling Peronist party
as the country faces legislative elections in October. On
counternarcotics issues, our cooperation with Argentine
authorities, both federal and provincial, is excellent. In
September 2004, following ten years of negotiations, the GOA
signed a Letter of Agreement with the Department of State,
both demonstrating its increased willingness to work with the
U.S. on counternarcotics issues, and enabling the U.S. to
begin providing assistance to the GOA. End Summary.

Overall Political Scene
--------------


2. (C) Your visit comes as President Nestor Kirchner is
enjoying a good run politically and economically. Argentina
has made a steady recovery from its catastrophic economic and
political meltdown at the end of 2001 and early 2002. Since
taking office, Kirchner has focused on consolidating his
political strength from the 22 percent popular vote he
received in national elections April 27, 2003. He forced
changes in the Supreme Court, the military, and his own
ruling Peronist (PJ) party and undertook populist measures
such as seeking to raise the lowest government salaries, the
minimum wage, and government pensions. In mid-2004, however,

Kirchner,s high approval ratings were showing some decline
because of concerns over crime and public security. The
spectacular rescue in October of a high-profile kidnapping
victim by Buenos Aires police has helped counter the
perception that Kirchner's government has not done enough to
deal with crime, including a wave of kidnappings that have
included wealthy, middle, and working class families.
Kirchner is also helped immeasurably by the absence of real
political opposition. The PJ party controls 51 percent of
the seats in the House and 57 percent in the Senate and 16 of
the 24 governorships. The next largest party, the Radicals
(UCR),controls less than 20 percent in each chamber. Forty
other political parties, many of them one-man shows, round
out the political scene.

Economy
--------------


3. (U) Argentina's economic recovery since late 2002 has
been impressive. An export-led boom triggered an 8.7 percent
surge in real GDP in 2003 and an estimated growth of 8.2
percent in 2004. Unemployment declined to 13.5 percent in

2004. Investment has jumped and capital flight has
decreased. Argentina's robust economic recovery is the
result of market reforms in the 1990s, including very high
investment, the adoption of a market-based exchange rate
regime in early 2002, and a favorable combination of high
international commodity prices and low interest rates.
Argentina has sound economic fundamentals and should continue
to perform well in 2005, assuming a successful debt
restructuring attracts international and domestic investment.
Argentina needs to sustain a high rate of investment and
growth to deal with its high poverty rate. During the first
half of 2004, 44 percent of the population were living below
the poverty line, and 17 percent were considered destitute.

Foreign Relations
--------------


4. (C) Argentina has played a generally positive role in
promoting human rights and democratic institutions in the
hemisphere, particularly in Haiti and Bolivia. Along with a
number of its neighbors, Argentina currently has peacekeeping
forces (almost 600) in Haiti in support of MINUSTAH,
reflecting its traditionally strong support of UN
peacekeeping operations. In Venezuela, President Kirchner
also played a constructive role in pressing Chavez to hold a
recall referendum in 2004. This month Argentina assumed a
two-year seat on the UN Security Council. In November 2005,
Argentina will host the hemisphere's leaders at the next
Summit of the Americas.

Counternarcotics Cooperation
--------------


5. (U) Argentina is not a major drug producing country, but
it is a transit country for cocaine flowing from neighboring
Bolivia, Peru and Columbia primarily destined for Europe.
Argentina is also a transit route for Colombian heroin en
route to the U.S. east coast (primarily New York). Due to
its advanced chemical production facilities, Argentina
continues to be a source for precursor chemicals. According
to Argentine government statistics, there was more cocaine
seized in the first three quarters of 2004 than in the entire
2003 calendar year. In addition to Argentine traffickers,
there is evidence that Colombian drug traffickers have
greatly increased their presence in all aspects of the
Argentine drug trade. This may signal a new chapter in the
global war on drugs, as Colombian narcotics traffickers
search out alternative bases of operations and transit routes
in response to the increased pressure of Plan Colombia.


6. (U) The September 2004 signing of the Letter of Agreement
has allowed the Embassy to receive an INL budget for the
first time since 1995 and begin providing much needed
training and assistance. However,the fact that Argentina
remains under Brooke Amendment Sanctions for failure to make
payments on a bilateral loan may affect Post's ability to
provide assistance. The GOA is embarking on the creation of
both a national security plan focusing on narcotics
interdiction and a national drug prevention plan. The GOA
has asked for Post,s input and assistance with both plans.


7. (U) Cooperation between the USG and Argentine
authorities, both federal and provincial, continued to be
excellent in 2004. During 2004, USG assistance supplied both
equipment and training programs for Argentine law enforcement
personnel. Examples of USG-funded programs in 2004 include:
two law enforcement tactical training courses provided by
DEA; a money laundering course sponsored by the Department of
Homeland Security (ICE); an airport narcotics interdiction
course sponsored by DEA/INL; and a prevention seminar held in
conjunction with SEDRONAR sponsored by PAS and INL. DEA/INL
also sponsored several GOA law enforcement professionals,
participation in regional training programs. In addition to
providing valuable training opportunities, Post,s DEA
detachment supports the Northern Border Task Force (NBTF),
and starting in 2004, the Mendoza Airport Task Force. The
DEA-supported task forces demonstrate the benefits of
interagency cooperation, and GOA officials have expressed
interest in expanding the program to develop task forces in
other narcotics trafficking hot spots.


GUTIERREZ