The National Interest

Tuesday, October 16, 2012

By J. Peter Pham

Last Thursday, a judge in Ghana upheld a court order impounding the legendary three-masted flagship of the Argentine Navy as part of a debt dispute with a commercial creditor of the Latin American country. While Judge Richard Adjei Frimpong’s ruling was limited to the particulars of the case before him, its implications are quite significant for Ghana and developing countries in general—and also for their relationship with the international financial system.

Ever since authorities in the West African country detained the ARA Libertad last week on the basis of a court order obtained from a local tribunal, much of the discussion about the incident has taken its cue from the angry reaction of the Foreign Ministry spokesman in Buenos Aires who denounced the action as that of “vulture funds” and “speculators” who had “crossed a new limit” in their “extortion.” The rather undiplomatic implication was that Ghana is somehow a dupe, if not a stooge, of these malevolent predators. Yet there is another, more likely, explanation: by bringing the Argentines to book in the spectacularly dramatic manner which they did, officials in Ghana knew exactly what they were doing and acted in their own interest—and that of other developing countries—by holding an international scofflaw accountable.

To view the full article, visit: http://nationalinterest.org/commentary/ghana-takes-argentina-7588

La Nacion

Tuesday, October 16, 2012

By Mariana Verón

The unusual retention of the Frigate Libertad on the coasts of Ghana collected its first political casualties.  In the midst of ever more bloody internal fighting in the national cabinet, the chief of the Army, Carlos Alberto Paz, left his post yesterday.

In his place, President Cristina Kirchner nominated his deputy, Vice Admiral Daniel Alberto Martin, the first submarine man to reach the top job of the Armada.

However, far from resolving the conflict over the decision by Ghana’s courts to side with a demand from foreign bondhodlers and impede the sailing out of the Frigate, detained for 13 days on the African coast, the casualties offered by the president opened up even more internal fissures.  This time, the most exposed in the dispute are Foreign Minister Hector Timerman and Defense Minister Arturo Puricelli, the latter being affected yesterday by the President’s decisions.

The exit of Carlos Alberto Paz, who came to his post a year ago, was the consequence of a first measure by Cristina Kirchner.  By the morning, the President had let go Commodore Alfredo Mario Blanco, the author of a letter from May 14 in which he asked for authorization to change the destination of the Frigate Libertad.  In place of stopping in Nigeria, as had been scheduled, he asked for permission to do so in Ghana.  The article was published last Sunday by journalist Horacio Verbitsky in Página/12. Also fired was the secretary general of the Navy, Luis María González Day, who two days ago had said the responsibility of the trip was shared between Defense and Foreign Relations.

Thus the Navy was disconnected from the mistake.  Both Blanco and González Day were subject to an administrative summary to investigate their responsibilities.

According to what official sources told LA NACION, with those two punishments to his subordinates, Pas was obliged to step down.  He met with Puricelli in the morning, on the 13th floor of the Edificio Libertador, and told him that he himself had authorized González Day to publicly speak to clarify the situation.  He became, this way, the poltician responsible for pointing against the ministers.

"Here there are two projects at play.  Those that want an uncritical rebuilding with the United States, like Puricelli, and those who don’t, like Timerman,” said a diplomatic source to LA NACION.

Foreign Minister Timerman yesterday cancelled a scheduled trip and spent most of the afternoon at the Casa Rosada meeting with the President.  At 9:35pm, he made no statements when LA NACION approached him as he just left the office of the secretary for Public Communication, Alfredo Scoccimarro. Written on that line is also Security Minister Nilda Garré, former head of the Defense ministry and a friend of Verbitsky.

In the midst of the conflict, Puricelli fell wounded.  He is responsible for the actions of the Navy and the first measures taken by Cristina Kirchner pointed towards his area of influence.

Yesterday, even in official offices the possibility was being analyzed to name an official close to the President as Puricelli’s second, to exercise more political control over him.

The minister arrived in the job at the end of 2010, when Cristina Kirchner created the Security ministry and put Garre there.  According to how official sources describe it, the exit of Paz from the Navy was a necessity for Puricelli to seek to unwind the political pressure.

In the midst of the passing of the buck from one area to another in the government, yesterday diplomatic negotiations resumed to try to solve the judicial matter from last Thursday which determined that the ship could not depart the port of Tema.

Vice Foreign Minister Eduardo Zuain and Vice Defense Minister Alfredo Forti arrived in Accra to try some efforts to solve the conflict.  The govenrment will not accept the demands of the bondholders, and will not pay the US$20 million in bail money.

Forti was the one who sent the letter with the change in the itinerary for the Frigate.  In the letter he asked that “due authorization” be requested from the Foreign Ministry for the change in the port.

The great unknown is who signed that authorization.  “I am sure there are people responsible on all sides,” said an official last night.  For the moment, the President marked down Defense and the Navy in the search for those responsible for allowing the Frigate to stop in Ghana.

Yesterday they will continue work in the legal section of the Foreign Ministry, led by Susana Ruiz Cerruti, to determine the manner of undoing the attachment.

The suspicion from the Casa Rosada, for now unproven, is that information on the change of port was leaked to representatives of the vulture fund NML Captial Limited, which filed the demand.

In the Navy, in turn, they argue that there is no leak possible because the travel plan was put together in advance by several months and is not secret.

To read this article in Spanish, visit: http://www.lanacion.com.ar/1517664-por-la-crisis-de-la-fragata-echan-al-jefe-de-la-armada

Clarin

Sunday, October 14, 2012

By Maria Eugenia Duffard

Thirteen days since the attachment of the Frigate Libertad in Ghana over a complaint from the so-called vulture funds, the authorities of the Argentine navy denied being responsible for the changes in the route of the trip that allowed the speculative investment funds to advance on the teaching vessel and said that it was an “inter-ministerial decision.”  The clarification from the naval authorities comes after the issuing of an internal note from the Navy to the Defense Ministry, where it reported on the change from a Nigerian port to the one in Ghana.

The response from the Navy authorities adds to the variety of crossing accusations between officials at the Foreign Ministry, Commerce and Defense over the scandal of the Frigate that came out of the government of President Cristina Kirchner last week.

The Frigate had left Buenos Aires on June 2 and should return on December 8.  While the initial itinerary didn’t stipulate a stop in the port of Tema at the city of Accra, the capital of Ghana, but one in Lagos, Nigeria, a change made official on May 14 carried the Frigate to that African port, where it’s been held since October 2.  Reporter Horacio Verbitsky, who frequently reflects the positions of the Security Ministry and one sector of the government, published a copy of note N° 34/12, signed by then-director of General Organization and Doctrine of the Navy, Alfredo Mario Blanco, in which it reports that “for operative reasons the itinerary of the instructional voyage has been modified.”  Verbitsky detached Foreign Minister Hector Timerman from the matter and charged against Defense Minister Arturo Puricelli, and against the Navy.

But yesterday, the Secretary General of the Argentine Armada, Rear Admiral Luis María González Day, denied that the change in route had been unilaterally taken by Navy authorities and in statements to radio El Mundo he said: “There is a totally logical sequence in the designation of the ports and of the Frigate’s final passages, and that whole sequence is a cooperative, inter-ministerial process, which is to say there are a series of back and forth communications to put together the trip that the Frigate Libertad then took.”

The vice president of the Argentine Naval League, Fernando Morales, said that the detention of the teaching ship in an African port is “an unprecedented incident” for the naval world.

Be that as it may, it’s clear than neither the Foreign Ministry authorities nor those from Defense were unaware of the route that the Frigate would follow nor the risks that came with docking in ports from non UNASUR countries, where any economic demand against Argentina is dismissed.  As Clarin reported yesterday, the new itinerary had been designed by the Foreign Ministry and offered to Defense.  However, those in the Foreign Ministry say it was officials from the office of the Secretary of International Economic Relations, led by Cecilia Nahon, under orders from Commerce Secretary Guillermo Moreno, who came up with the idea of stopping in African ports.  In addition to Ghana, the ship’s route included ports in the capitals of Senegal, Angola, Namibia and Cape Town.

Despite these explanations given by officials close to Timerman, Verbitsky yesterday set out against Puricelli – who is an enemy of Security (and ex-Defense) Minister Nilde Garre – and accused him of leaving the Navy to agree to its “new independence” and try to shed his responsibility in the attachment of the Frigate with “a common press operation.”

At the close of this edition, neither officials of Defense nor the Foreign Ministry had offered an official explanation of what happened with the Frigate.  Only the document signed by Economy Minister Hernan Lorenzino, who was leading the Argentine delegation to the Annual Meeting of the IMF and World Bank in Tokyo, alluded to the Frigate by charging against the vulture funds who asked for the attachment of the Frigate over a default on debt bond payments.  “Argentina is facing an extraordinary and at times ridiculous challenge dealing with the creditors called the vulture funds …” Lorenzino said yesterday.

As such, the ship remains stranded in Ghana with 289 crew members, 36 guests on board, and a daily port cost of US$50,000.  The government sent a mission to that country led by the vice ministers of Defense, Alfredo Forti, and Foreign Relations, Eduardo Zuain.  The variety show promises to continue.

To view this article in Spanish, visit: http://www.clarin.com/politica/escandalo-Fragata_0_792520807.html

Tuesday, October 9, 2012

Outcry grows against official corruption, rising inflation and deteriorating democratic rights

Argentines have been busy… posting comments and organizing online. The surge in online commentary is a testament to its citizens’ robust civil engagement.  It also reflects growing weariness with President Cristina Fernandez de Kirchner’s political agenda (for background, see: “The president and the potbangers” that ran in last week’s Economist.)

Yesterday Perfil profiled "the post-banging protests being organized for November 8th". (#8N)  The organizers claim no singular political affiliation or leader and promise more people than on September 13.   Collectively, they represent some 65,000+ members alone on Facebook.

And the online activity extends beyond Argentina’s borders – notably, the flurry of online activity around the Fragata Libertad in Ghana (#FragataLibertad) and President Kirchner’s Georgetown and Harvard University visits.  In some 9,000+ online posts, Argentines encouraged students at Georgetown and Harvard to ask President Kirchner tough questions because they could not.

The volume of comments posted on Harvard’s site was so exceptional that it drew media coverage.  On September 25, Clarín reported that the online forum that announced the Harvard event was full of comments – most of them negative – and also expressed anger at Harvard for inviting her.

On Twitter, individuals were also engaged all way from Argentina.   #CFKdontlietoharvard was trending globally on September 27^th and several individuals retweeted photos of ATFA’s “red cards”.

Following the event, The Harvard Crimson published the critical op-ed, "Cristina, Get Serious" today by a student who sat in the front-row at her talk.  It also ran the op-ed, “Kirchner’s Lack of Answers,” co-authored by Ambassador Nancy Soderberg and Freedom House’s Karin Karlekar.  To date, it has received 1,800 “likes” on Facebook and a plethora of supportive comments.

A sampling:

─        “As a citizen of Argentina I welcome the international spotlight on the deteriorating democratic rights we experience in this country…”

─        “No more to say to the people in Harvard except for a HUGE THANKS. This article is a great (and sad for us) expression of what we exactly think about her...”

─        “Excellent article!!!Thanks so much Harvard Community for unmasking president Cristina Fernandez. You have done a very important contribution to the argentine  Democracy!!!”

─        “I am a professor at a National University of Argentina. In my opinion the assessment of Mrs. Kirchner made in this article is, unfortunately, simply the truth. Most tactics adopted by the Federal Government could be understandable under a dictatorship, but not a democratic nation…”

Another notable development has been the reaction to the the La Nacion coverage of the Foreign Ministry press release regarding the Frigate Libertad.  The article set off a wave of almost universally anti-K commentary in Spanish in the comments section of the article.  As of now, about 500 comments have been posted, with many saying that the Argentine government are the ones to blame – they are the “real vultures” and that “lying about settling the entire debt” is also an embarrassment.

A sampling:

─        alebariloche: Fondo buitre es un pésimo término. Son tenedores de bonos que Argentina debió haber pagado y no lo hizo. Qué quieren, que nos aplaudan? (Vulture fund is a terrible term.  They are holders of bonds that Argentina had to pay and didn’t.  What do they want, for them to applaud us?)

─        J_Cathelineau: No sé bien que son los fondos buitres....por ejemplo...AFIP y ARBA son fondos buitres? (I don’t know who is the vulture funds.. for example… AFIP and ARBA are vulture funds?)

Reply: blanca54 naaa, esas son pirañas (nooo, those are piranhas)

─        Krakatoo: Propongo pagarles a los fondos buitres con Timerman,esto trae 2 ventajas: 1- Nos sacamos de encima este badulaque 2- Estafamos otra vez a los acreedores !!!!!!  (I propose to pay the vulture funds with Timerman, this brings 2 advantages: 1- We get out from under this idiot 2- We once again stiff the creditors!!!!!)

─        lopeznovoa: Los buitres tienen guarida en las Islas Caimán? Yo pensaba que anidaban en las agencias de la AFIP. (The vultures have a lair in the Cayman Islands? I thought that they were nesting at the offices of the AFIP.)

─        jaymir: Este gobierno fiel a su "modelo", solo nos hace pasar verguenza. (This government loyal to its “model”, only makes us ashamed.)

─       angelenghel: Según el comunicado de cancillería, todo esto fué orquestado "para perjudicar al país". Con los funcionarios públicos que tenemos, en especial el canciller, no necesitamos que nadie nos de una mano. Nos perjudicamos solos. (According to the FM statement, all of this was orchestrated “to damage the country.”  With the public officials we have, especially the Foreign Minister, we don’t need anyone’s hand in it.  We damage ourselves.)

─        fdebeer: No nos olvidemos que Cristina y Néstor eran parte de fondos buitres que les sacaban la casa a los deudores hipitecarios de la 1050. Entre bueyes no hay cornadas. (Let’s not forget that Cristina and Nestor were part of the vulture funds that took houses away from mortgage debtors from the 1050.  Between oxen there is no statue.)

─        marleyhvalle: Timmerman, ellos no perjudican a la Argentina, simplemente quiere que se les pague lo se les debe. Si compras un coche y dejas de hacer los pagos, la financiera te va a pedir el coche. (Timerman, they aren’t hurting Argentina, they simply want to be paid what is owed to them.  If you buy a car and stop making payments, the lender is going to ask for the car.)

─       fratelliditalia: No entiendo algo. ¿Argentina pidió plata? Sí. ¿Firmó las condiciones y estuvo de acuerdo? Sí. ¿La devolvió? No. ¿Qué gobierno se endeudó? Para los acreedores es el Estado Argentino. ¿Entonces de qué quejarse? Me gustaría saber que harían los ultranacionalistas si alguien no les paga una deuda.  (I don’t understand something.  Argentina asked for money?  It signed the conditions and agreed? Did it return it?  What government took the debt?  For the creditors it’s the Argentine State.  So what are they complaining about?  I would like to know what these ultranationalists would do if someone didn’t pay them a debt.)

─        gbpuebloeden: Hay que pagar las deudas!!!... (Debts have to be paid!)

─        kapkapkap: Conozco un fondo pinguino que se llevó 500 millones de dolares para comenzar... (I know a penguin fund that took US$500 million to start...)

─        Daikaiju: "El fondo buitre tiene domicilio en las islas Caiman"...Eso no seria grave, lo grave es que la familia Kirchner tambien tiene cuentas secretas en la islas Caiman, con millones de dolares producto de la corrupcion. El muerto se asusta del degollado?  (“The vulture fund is domiciled in the Cayman Islands”... That wouldn’t be so serious, what is serious is that the Kirchner family also has secret accounts in the Cayman Islands, with millions of dollars as fruit of corruption.  The dead man is afraid of the beheaded man?”)

─        parcole: Sebastián: Hay bonistas que tienen los bonos desde antes del default. Un Bono lo emite alguien necesitado de dinero (en este caso el estado Argentino). Es un acuerdo entre dos partes con las condiciones puestas por el gobierno que emitió los bonos. Hoy me prestas 10 y tal dia te devuelvo 12 (por así decirlo). Si el día que tenés que devolver decís: "nos van muy bien las cuentas, somos los que damos ejemplo en el mundo y damos cátedra, pero vos sos un usurero y no solo no te voy a dar los 12 que te tengo que dar, sino que te doy 2,5 y aceptalo porque si no te quedás sin nada ya que es mi última oferta". Quién es el buitre en esta historia?  (Sebastian: There are bondholders that have bonds since before the default.  A Bond is issued by someone who needs money (in this case the Argentine state).  It’s an agreement between two parties with conditions put forth by the government that issued the bonds.  Today you owe me 10 and then on this day I’ll pay you 12 back (so to say).  If on the deadline day you say: “we are doing very well with the accounts, we are the ones who are an example to the world and we have a Chair, buy you are a usurer and not only will I not give you the 12 that I have to give you, but I am giving you 2.5 and accept it because if you don’t you’ll get nothing and that’s my final offer.”  Who is the vulture in this story?”)

It’s a very positive trend that as Argentina’s press is under fire, the online engagement is only heating up.  This is a reflection of the shift underway in Argentine society and illustrates how the online community remains a free space untouched by the Kirchner government.