ARGENTINA: POLITICAL AND ECONOMIC ANALYSTS DISCUSS CFK

UNCLAS BUENOS AIRES 000242 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV PREL ECON OREP AR VE BR CU SUBJECT: ARGENTINA: POLITICAL AND ECONOMIC ANALYSTS DISCUSS CFK REGIME PRIORITIES WITH CODEL ENGEL ¶1. (SBU) Summary: Representative Eliot Engel and Delegation met February 21 with noted Argentine political and economic analysts to discuss bilateral relations, views on the Cristina Fernandez de Kirchner (CFK) administration, and regional issues, including relations with Brazil, Venezuela, and Cuba. Analysts noted that CFK is not ideologically driven (in particular reference to relations with Venezuela),and that they expect her to follow most of her husband's economic and political policies. Regionally, CFK looks to position Argentina between Brazil and Venezuela but, while CFK may be more interested in foreign policy than her domestically-focused husband, she too lacks experience in the area. Domestic challenges, such as inflation and public security, will absorb much of CFK's attention, but economic and fiscal challenges will force her to focus more on the international arena, as her administration tries to deal with the related issues of energy shortages, the need to attract investment, and access international financial markets. End Summary. ¶2. (U) Representatives Eliot Engel, Maurice Hinchey, Jerry Weller, Gene Green, and Virgina Foxx, accompanied by Ambassador, met February 21 with noted Argentine political and economic analysts. The analysts were Rosenda Fraga, Jorge Castro, Diana Mondino, Alejandro Catterberg, and Nicolas Ducote. BILATERAL RELATIONS -------------- ¶3. (SBU) Rosenda Fraga, one of Argentina's preeminent political analysts, said that anti-American sentiment in Argentina is substantial, but is much like French public opinion of the United States. In the case of France, he argued, public disdain for America does not impede France from being a NATO ally -- nor should it keep the U.S. and Argentine governments from working together. Chairman Engel suggested that perhaps some portion of the anti-Americanism arises from the close U.S.-Argentina relationship during the Carlos Menem administration (1989-1999),a government vigorously repudiated by CFK and former President Nestor Kirchner and now largely discredited by the Argentine public. DOMESTIC CONCERNS -------------- ¶4. (SBU) Alejandro Catterberg, with the political consulting and polling firm Poliarguia, stated that the main concern of the Argentine public is personal security, followed by employment and inflation. He noted that while CFK's public ratings are high, they are not as high as her husband's were at the outset of his administration, and he suggested that her public support will begin to decline, making her less popular during mid-term elections in ¶2009. To counteract this, Catterberg said, the Kirchners are rebuilding the structure of the Partido Justicialista (PJ), consolidating their control of it under the leadership of former President Nestor Kirchner. This will provide CFK with more political power, but less public support, according to Catterberg. ¶5. (SBU) Nicolas Ducote, Director of CIPPEC (Center for Implementing Public Policy),echoed the concerns of Catterberg regarding the concentration of power in the executive branch. This is tempered somewhat, he noted, by the growth and influence of civil society groups focused on good governance, transparency, and strengthening democratic institutions. DOMESTIC ISSUES DRIVE INTERNATIONAL ENGAGEMENT -------------- - ¶6. (SBU) Rep. Jerry Weller wondered whether public opinion supported CFK being more of an internationalist than her husband, former president Nestor Kirchner. The general consensus of the analysts was that, while CFK was more interested than her husband in international issues and Argentina's role in the world, she is not an "internationalist." In fact, they agreed, she is relatively inexperienced in the global arena. The analysts also noted that Argentines are currently focused on domestic issues, particularly in light of the very fresh memories of the 2001-2002 economic crisis. That said, the analysts thought that necessity rather than public opinion (e.g., energy shortages and the need to attract investment) will push CFK to be a more active participant in regional and international issues. ¶7. (SBU) Economist Dr. Diana Mondino noted that Argentina's phenomenal growth over the last five years had occurred "despite the actions of the government," attributing the economy's performance to positive external factors such as high commodity prices. While the Argentine economy is 40% larger than in 2002, she said, the education system is failing, and the vast majority of exports are commodities. In short, Argentina's gains are not sustainable. Rep. Maurice Hinchey asked whether Argentina is investing in alternative energy, given the energy shortages in the country. Nicolas Ducote explained that such investments are difficult given an uncertain investment climate and domestic policies fixing the prices of fuel and electricity below market prices. ARGENTINA'S REGIONAL ROLE -------------- ¶8. (SBU) Jorge Castro, a strategic planning expert, expressed his opinion that the Kirchners should not be placed in the same ideological camp as Hugo Chavez or Evo Morales. CFK's relations, with Venezuela, in particular, will be pragmatically driven and focused on economic and commercial issues. Castro and Fraga agreed that the GoA sees itself filling the gap between Brazil and Venezuela and trying to benefit from that dynamic. They also said that an interesting relationship to watch will be that of Brazil and Cuba. They believe that Raul Castro will be more focused on domestic issues -- now that he has the reins of government -- and will seek to attract investment, at the same time trying to distance himself somewhat from Chavez in Venezuela. Brazil, they said, will begin to exert more influence on Cuba in this scenario. ¶9. (U) This cable was cleared by CODEL Engel. KELLY