Oil in the Malvinas/Falklands: Brazil’s next regional headache?

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Falkland Islands Penguins 82

Brazil, foreign policy observers often point out, is blessed. Contrary to many other emerging powers such as China or India, it is located in a region that rarely experiences interstate tension or war. Not only can Brazil live on a relatively small defense budget, while India is the world's largest arms importer. Brazil can also dedicate considerable time and energy towards extending its global diplomatic reach without constantly being forced to deal with trouble in its neighborhood.

There are few signs that this will change in the near future. Brazil usually engages when political stability in a nearby country is at risk -- such as in Paraguay in 1996 and 2012, in Venezuela in 2002 and in Honduras in 2009. Aside from protecting its economic interests, policy makers in Brasília also seek to keep the region free of tension and crises (usually acting through regional institutions such as Mercosur and Unasur) to avoid interference by the United States or any other outside actor. Over the past decade, defending political stability in the region has turned into one of Brazil's key foreign policy goals.

While recent troubles are usually domestic in nature, involving a sudden impeachment of a president in Paraguay and social unrest in Venezuela, another crisis may be lurking around the corner that, due to its international nature, is likely to give headaches to Brazilian foreign policy makers. While the territorial dispute between Argentina and the United Kingdom is nothing new, significant oil findings around the Malvinas/ Falkland Islands (an Overseas Territory of the United Kingdom claimed by Argentina) could significantly worsen the existing antagonism between the two countries involved.

As The Economist writes, the head of Argentina's new Malvinas Secretariat recently announced that firms drilling off the islands’ coasts would be ineligible to exploit shale-oil and gas in Patagonia. Late last year, Argentina's Congress passed a law that imposes prison sentences of up to 15 years and fines of up to $1.5 billion on anyone involved in exploring the islands’ continental shelf without its permission.

Meanwhile, the appointment of a new governor of the islands by the British government led Argentina's Ambassador to the UK, Alicia Castro, to write an op-ed in The Guardian this week, accusing London of violating international law in this "pending case of decolonization". She writes that the UK, refusing to resolve the dispute, aims to justify the continued occupation of the islands by invoking the right to self-determination for the current British inhabitants. Yet,

The right of self-determination of peoples is not applicable to any or every human community, but only to "peoples". In the case of the inhabitants of the Malvinas, we do not have a separate "people", still less one subjected to colonialism. The British residents of the islands do not have the right to resolve the sovereignty dispute between Argentina and the UK: nobody doubts they are British, and can continue to be so, but the territory in which they live is not. It belongs to Argentina. 

In response, the island's Chair of the Legislative Assembly, Mike Summers, argued that the inhabitants' approach was "fully in accord with the universal right to self determination set down in the UN Charter."

The topic continues to appear regularly not only in Argentina, but also in the United Kingdom. In late February, the British media sounded alarm at increases in Argentina's defense budget and quoted Admiral Lord West, who was at the helm of HMS Ardent when it was sunk in the 1982 War, saying: “Any major increase in defence expenditure by Argentina must be viewed with concern. I am concerned that, without any ­aircraft carriers, we are incapable of ­recapturing them.” He continued pointing out that Britain’s new carriers will not be operational until 2020 and until then Argentina had a "window of opportunity".

In August 2013, Argentina's President took advantage of her country's term as temporary President of the UN Security Council to address the issue. The region stands firmly behind Argentina - as do most other developing countries. As The Economist reported on the meeting,

...several ministries echoed Ms Fernández's concerns. On behalf of CELAC Cuba's foreign minister recognised “Argentina’s legitimate claim on the sovereignty” over the Falklands (and raised the issue of nuclear disarmament, a dig at Britain’s alleged missile-carrying vessels in the South Atlantic). Venezuela's bemoaned the islands’ “colonial situation”. And their Uruguayan opposite number promoted “a South Atlantic zone of peace”, denouncing what he termed the “illegitimate activities of oil exploitation” in waters near the Falklands.

Britain, on the other hand, frequently points to the last referendum in March 2013, during which more than 99% of the islands' inhabitants expressed their desire to maintain their current political status:

When the result was announced in Stanley, the capital—which was plastered with union flags crossed with the words “British to the core”—crowds toasted “Her Majesty and the Falklands” and sang “Rule Britannia”. 

For Argentina's foreign policy makers, the disputed islands have long been a key issue. For neighboring Brazil, all this does not seem to matter much at first glance. When Great Britain's foreign secretary recently visited Brazil, the issue was not on the agenda. However, massive oil findings in the area would dramatically increase both the islands' economic importance and make finding a solution to the dispute far more difficult. In the face of tougher Argentine rhetoric, the United Kingdom could increase its military presence (which currently stands at 1,300 troops backed by four Typhoon jets), complicating Brazil's maritime strategy in the South Atlantic. If Argentina imposed a full-scale economic blockade of the islands, tension would almost certainly increase further. It surely is in Brazil's interest to avoid such a scenario.

Read also:

Brazil’s Venezuela Problem

Is Brazil abandoning its global ambitions?

Is Brazil Ready For Prime Time? (A Conversation with Anne-Marie Slaughter)

Photo credit: Ben Tubby/Wikimedia Commons