Argentina’s “Third Way” and Russia’s Invasion of Ukraine

July 03, 2022

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The current international order is characterized by the “return of history,” that is, by the return of great power competition. The relative decline of US power and the rise in the material capabilities of China lead to an inevitable conflict. The geopolitical dynamics that operated at the margins of the post-Cold War order occupies today’s center stage, in a highly globalized and interdependent system. While the logic of geopolitics implies a rigid zero-sum game for all, the logic of interdependence relies on a variable-sum game where flexibility and diversification prevail.

 

It is in this context that the international strategies of peripheral countries in general, and of Latin America in particular, operate. While the hegemonic power demands commitments on the strategic, geopolitical front, countries in the region are keen to expand and to diversify their economic and trade ties with the Global South.

 

Vladimir Putin’s decision to invade Ukraine on February 24, 2022, had a systemic impact on international relations. No one could be indifferent to a conflict that by the end of 2021 seemed inevitable. The unexpected military resistance of Ukraine and the equally unexpected resilience of Russia in the face of unprecedented Western economic and financial sanctions extended a conflict that has already lasted more than 100 days.

 

How Argentina has handled the foreign policy and diplomatic challenges arising from the war in Ukraine constitutes a fascinating case study of the dilemmas faced by developing nations in this setting of great power competition. 

 

One of Latin America’s largest economies, a member of the G20, and a country where its foreign policy orientation has tended to veer from militant Third Worldism to resolute pro-U.S. stances, and back, in the past four decades, the current time has been particularly testing for the conduct of Argentine foreign relations. Its precarious financial position and huge foreign debt makes it especially vulnerable to US pressures and those of the Bretton Woods institutions. In turn, its trade and investment ties with China, as well as the support it received from Russia’s “vaccine diplomacy” at the time of the Covid-19 pandemic, at a time of raging “vaccine nationalism” in the West, mean it is fully conscious of the benefits that derive from a diversified set of foreign economic and diplomatic relations. 

 

In this context, the way the government of President Alberto Fernández has managed this challenge provides valuable insights into what the doctrine of Active Non-Alignment is all about and why it provides us with a useful handle to understand Latin America’s relations with the rest of the world today.

 

To understand the dynamics of Argentine foreign policy - before and during the conflict - three key aspects must be considered: the Peronist foreign policy tradition; the vulnerabilities imposed by Argentina’s foreign debt; and the extant divisions in the ruling coalition, the Front of All.

 

From the very beginning, the Peronist movement was marked by the notion of the "third position." According to it, Argentina should have an autonomous foreign policy and aim to increase its margin of maneuver abroad, so as not to fall prey to the whims of the great powers. That political tradition, which has once again come to the fore with the return of Peronism to power in 2019, has gained new currency with the notions of Active Non-Alignment and Diplomacy of Equidistance. These notions have acquired new currency as a result of the U.S.-China rivalry and an international order tending towards bipolarity. However, the financial vulnerability of Argentina and the internal divisions in the ruling coalition have led to inconsistency and ambivalence in the execution of this foreign policy.

 

By the end of 2021, Argentina was finalizing talks to renegotiate the agreement signed in 2018 by then President Mauricio Macri with the International Monetary Fund. The IMF had lent a record $44 billion to Argentina, part of which had to be repaid in 2022. After renegotiating the debt with private creditors, the government of Alberto Fernández needed to reschedule its debt payments to the IMF.

 

Given the need for Washington's support in the tough negotiations with the IMF, the Argentine government acted accordingly. The visits of Jake Sullivan (National Security Advisor) and Juan González (Director for Latin America in the White House’s National Security Council) to Buenos Aires and the visits of Secretary of Strategic Affairs Gustavo Béliz and of Representative Sergio Massa to Washington (both with many contacts in the US capital) were part of this strategy. This was followed by efforts to secure a bilateral meeting between Joe Biden and Alberto Fernández at the COP in Glasgow, by the participation of Argentina in the Democracy Summit held in Washington DC in December 2021, and by the visit to Washington of Foreign Minister Santiago Cafiero in January 2022 to meet with Secretary of State Antony Blinken, as he sought political support for the agreement with the IMF.

 

(Source: www.batimes.com.ar)

 

On January 28, 2022, President Alberto Fernández announced a political understanding with the IMF on Argentina’s debt rescheduling. This agreement was rejected by Vice President (and former President) Cristina Kirchner and her political followers, on the strength of the argument that it meant more hardship and belt-tightening for Argentinians, given the economic adjustment it entailed for an already weakened and battered economy. Three days later, Máximo Kirchner, the son of Vice President Cristina Kirchner, and leader of the ruling coalition’s parliamentary group, broke with the latter.

 

In this context, in early February, President Alberto Fernández undertook state visits to Russia and China, with bilateral meetings with Vladimir Putin and Xi Jinping. At the time, a war between Russia and Ukraine was imminent. In turn, in the context of the political boycott of the Winter Olympics held in China, President Alberto Fernández was present at the opening ceremony of the Games. Only Argentina and half a dozen other countries were present both at the Summit for Democracy in Washington in December and at the opening of the Winter Olympic Games in Beijing in February.

 

On February 3, Alberto Fernández met with Vladimir Putin. A day later, the Russian President had a bilateral meeting with Xi Jinping and signed a joint, 5000-word statement on China-Russia collaboration. On February 6, the President of Argentina held a meeting with his Chinese counterpart. The succession of events - especially after seeing how events unfolded - showed Argentina was close to the Moscow-Beijing axis.

 

Fernández’s visit to Russia had two purposes. It expressed Argentina’s appreciation to Moscow for sharing the Sputnik V, an anti-Covid-19 vaccine, at a time when Argentina had no access to other vaccines. It also aimed to secure Russia’s support for an increase in IMF Special Drawing Rights (SDR) to Argentina. If Fernández’s visits to Moscow and Beijing at such sensitive moments raised eyebrows in the West, his fiery rhetoric in his meeting with Putin didn’t help. The speech was highly critical of the US role in Latin America and concluded with the invitation for "Argentina to be Russia’s gateway to the region."

 

The President’s statements were directed at a domestic audience, and particularly at the faction of the ruling coalition that objected to Argentina’s agreement with the IMF. Ties with Moscow and Beijing are fostered especially by supporters of Vice President Cristina Kirchner. The Ambassador in Moscow, Eduardo Zuain, and the Ambassador in Beijing, Sabino Vaca Narvaja, are part of Mrs. Kirchner’s inner circle. In that sector, anti-U.S. sentiment reigns.

 

In turn, during Fernández’s visit to Beijing, Argentina signed a Memorandum of Understanding (MoU) to join the Belt and Road Initiative (BRI). Although 19 Latin American countries had already done so, Argentina’s signing onto China’s flagship foreign policy project means that the country is the largest economy in Latin America to join BRI. Fernández also returned to Buenos Aires with a $24 billion Chinese investment package for Argentina, including a project for a nuclear energy plant, among others.

 

A few days after Alberto Fernández’s visit to Moscow, Russia invaded Ukraine. Western countries considered this an inadmissible act against the existing international order. Since then, the West has tried to isolate Moscow politically and economically.

 

For Buenos Aires, the war was a problem. It forced the government to take a stance on a thorny issue. After initial statements condemning the war that did not even mention Russia (leading to strong objections from the Ukrainian Embassy), Argentina quickly aligned its discourse and diplomatic action with the United States, although subtle differences between the presidency and the Ministry of Foreign Affairs continued to surface. The vote condemning Russia’s invasion of Ukraine at the United Nations General Assembly was followed by another in favor of suspending Russia’s membership in the UN Human Rights Council. This was proof positive of the "limited opposition" concept coined by Roberto Russell and Juan Gabriel Tokatlian: disagreements with Washington on political and economic matters are acceptable, but on hemispheric and global strategic issues, they are not.

 

Argentina’s support for the US position on the war in Ukraine was not unconditional. Argentina rejected the use of economic sanctions against Moscow, as well as the attempt to expel Russia from the G20. However, Argentina continued to hew Washington’s line on other issues. The April visit to Argentina of General Laura Richardson, the Chief of the US Southern Command (“SouthComm”), a vocal critic of what in the United States is referred to as “the role of external powers in Latin America,” and the signing with 60 other democracies of the “Declaration for the Future of the Internet” are expressions of that. Only five Latin American countries - Argentina, Colombia, Costa Rica, Peru and Uruguay - signed the latter, an initiative of the Biden administration that seeks to compete with China in shaping the future of the web.

 

The deterioration of international economic conditions - despite higher revenues from commodity exports - had an impact on the adjustment program, retrenchment goals and debt repayment schedule set by Argentina with the IMF. The government will need a US waiver for approval of its IMF debt repayment schedule in the second half of 2022, and once again the White House will be key to that end. Likewise, Argentina must secure loans (in the range of 4 billion dollars) from the World Bank and the Inter-American Development Bank, which will be vital to alleviating the lack of foreign currency in the second half of 2022, loans on which the U.S. will have a say.

 

That said, the prolongation of the war and its impact on food and energy prices has also enhanced Argentina’s standing within emerging markets. The invitation for Alberto Fernández to participate in the BRICS Summit (Argentina is negotiating its accession as a member of the group) hosted by China and held virtually in July is one indicator. Another is the invitation for him to participate in the G7 meeting in the German Alps a few days later. With Argentina having a place at the table in two of the leading groups that deal with global economic governance issues, one from the Global South, and the other from the Global North, the country has an extraordinary opportunity to ratchet up its diplomatic game and make the most of the privileged position provided by its enormous natural resources.

 

Yet, if the financial vulnerability that affects Argentina is exacerbated, and the factionalism that plagues the ruling coalition is amplified, it will be difficult for Argentina to continue with the delicate and complex game of Active Non-Alignment that it has played not without dexterity in the first half of 2022. In the context of the war in Ukraine and great power competition, the risk for Buenos Aires is that its strategy becomes an "inconsistent" equidistance.

 

Please note: The above contents only represent the views of the author, and do not necessarily represent the views or positions of Taihe Institute.

 

This article is from the June issue of TI Observer (TIO), which is a monthly publication devoted to bringing China and the rest of the world closer together by facilitating mutual understanding and promoting exchanges of views. If you are interested in knowing more about the June issue, please click here:

http://www.taiheinstitute.org/Content/2022/06-30/1115477342.html

 

 

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