In 2001, Argentina underwent a catastrophic economic meltdown, the result of brutal and incompetent military dictatorships, ill-conceived economic policies, and massive corruption. The result: default on $100 billion in sovereign bonds and international pariah status.
In recent years South America’s second largest country had begun to rebound remarkably well, posting impressive growth while returning to macro-economic sanity. Now, the progress achieved at great sacrifice is being rapidly undone as President Cristina Fernández de Kirchner snatches defeat from the jaws of victory. She is reverting to many of the inflationary and radical populist policies that have brought ruination before, while allowing Argentina to become a center for transnational criminal organizations.
At the same time, she is allying herself ever more closely Venezuela, Cuba and their criminalized allies in Ecuador and Bolivia. And she is aggressively imitating their anti-democratic policies of curbing independent media, meddling in the judiciary, illegally expropriating national and foreign companies, overseeing corrupt patronage systems, and becoming more stridently anti-American.
On the international stage she has shocked many by opening negotiations with Iran that appear aimed at absolving the Islamic nation’s top leadership of the 1994 bombing of a major Jewish center in Buenos Aires which left 85 dead. Argentine investigators’ work on the case for years resulted in an indictment of senior Iranian and Hezbollah officials. That was sufficient for INTERPOL to issue six “red notice” requests for arrest against several of them.
These include Ahmed Vahidi, Iran’s current minister of defense, and Moshen Rabbani, a leading intelligence operative and the architect of Iran’s expansion in Latin America. Indeed, the during the trials that led to the convictions of several people for the attempted 2007 bombing of fuel lines beneath JFK airport in NY revealed Rabbani to be the intellectual author of that planned mass murder.
While easily winning reelection in 2011, succeeding her husband Néstor, President Fernández has seen her popularity plummet. Inflation is running close to 30 percent, and her refusal to provide accurate economic data led the International Monetary Fund (IMF) to officially censure her government and threaten her with expulsion.
Labor unrest is growing, dollar trades on the black market at almost double the official rate, capital flight is accelerating, and imports are drying up due to suffocating new regulations.
Despite these woes, her official financial filings show her personal wealth has grown some 1,000 percent since she and her husband assumed the presidency in 2003, from $1.6 million to $18 million by the end of 2012.
For Argentina’s traditional allies in the West, her decision to secretly negotiate a vaguely worded “memorandum of understanding” with Iran is particularly troubling.
The agreement calls for the establishment of a five member “truth commission” — two chosen by each country, and a fifth by consensus, to review the case — with no deadlines and no way to compel those indicted to testify under oath or be judicially interrogated by the commission or Argentine prosecutors. Already the Iranians have said Vahidi will not talk, defeating one of the main purposes of the whole exercise.
Iran has made it clear it expects the INTERPOL “red notices’” to be lifted, which would be a significant victory, and currently part of the discussions. It is easy to discern some of the rationale for such warming relations. Iran is buying more than $1 billion in desperately needed grains and beef from Argentina, easing its food shortages while giving Argentina desperately need hard currency.
But other forces may be at work. Meanwhile, Iran’s allies in the region, led by Venezuela, have vowed to help Iran break international sanctions and support its nuclear program. It is worth remembering that Iran’s nuclear reactor, refitted and fueled by Argentina in the 1980s and 1990s, was suspended “permanently” after the 1994 bombing was linked to Iran.
Argentina also recently revived its Condor missile program of the 1980s, secretly testing the solid fuel Gradicom PXC 2009. The missile technology is being shared with the industrial branch of Venezuela’s military known as CAVIM.
CAVIM is sanctioned by the U.S. Treasury for illicitly aiding Iran’s nuclear program.
Given Iran’s desire for missile technology and components, the possibility of Argentinian technology reaching Tehran through Venezuela is high. President Fernández is embarking on a dangerous path back to Argentina’s worst days of economic ruin while courting the world’s foremost state sponsor of terrorism. This should be of deep concern for her neighbors and for those who understand Iran’s intentions and capabilities.
Douglas Farah is senior fellow at the International Assessment and Strategy CenterFarah is the author of the recent report “Back To The Future: Argentina Unravels.”