At a critical moment in the negotiations to restructure the debt of more than 40 billion dollars that Argentina has with the IMF, Alberto Fernández opens his 2022 international agenda with two not very naive destinations. In a visit to China with stopover in Russia, the president will review the path begun decades ago in terms of financing and productive investments while (it) will be demonstrated that there is life beyond the West. PageI12 He spoke with expert analysts in the Argentina-China and Argentina-Russia relationship to break down what the country can achieve, as well as a photo that shows the IMF that it is not its only alternative.
The most important political aspect of the trip planned for the next 3 and 4 February is linked to the adherence to the “Belt and Road Initiative”, popularly known as the Silk Road, the strategic development project that, mainly through investments in infrastructure, drives China on a global scale.
“Beyond the fact that several Latin American countries have already joined, Argentina would be the first of the four large Latin American economies – Mexico, Brazil and Colombia are the remaining three – that would be doing so,” highlights the economist and author of the books “How did they do it?” the Chinese?” and “A World Made in China” Gustavo Girado, which highlights the importance of this accession as it enables Argentina to host strategic projects to improve the country’s infrastructure.
The visit to Asia could unlock many projects started after the strategic association agreements signed by both countries during the governments of Néstor and Cristina Kirchner. “This trip will allow unblocking slowed down investments and project investments in public works, dams, nuclear energy, renewables and defense,” explains Gabriel Merino, co-coordinator of the China and the World Power Map working group at Clacso.
At the end of December, a document sent to China was made public in which the Strategic Affairs Secretariat of Gustavo Béliz and Foreign Minister Santiago Cafiero listed 17 infrastructure projects that the country seeks to finance. The most important is the fourth nuclear power plant, a reactor project with enriched uranium and light water technology that will cost 7.9 billion dollars, 85 percent of the total project budget. It was scheduled in 2014 and was scheduled to start in 2016 during the administration of Juan José Aranguren as Minister of Energy, who first delayed it to review the conditions of the contract to finally freeze it in 2018 due to the economic crisis.
Another project included in the list is that of the “President Nestor Carlos Kirchner” and “Governor Jorge Cepernic” dams on the Santa Cruz River, which were awarded in 2013. The following year a group of Chinese banks undertook to contribute 4,714 million dollars to finance the work with a five and a half year grace period for the capital, the period that was expected to be completed. the construction. After the grace period, China claims repayment for a project that, due to the delays it suffered, is not yet completed. The Government must seal a refinancing agreement to extend the repayment terms and continue receiving funding.
An important group of works that the Argentine government prioritizes has to do with the railways: the rehabilitation of the San Martín, Roca and Belgrano Cargas line railway system and a modernization plan for railway networks that includes the purchase of rolling stock. also of renewable energy such as the expansion of the Cauchari 4 and 5 photovoltaic park that was inaugurated in 2019 and the Cerro Arauco wind farm. The list also includes works on the gas pipeline system, drinking water treatment plants and aqueducts, the Chaco-Corrientes and Santa Fe-Paraná bridges, connectivity and fiber optic, housing and habitat programs, road corridors and improvements, electrical transmission and distribution.
“China has a surplus supply in aspects that Argentina has a surplus demand: it offers infrastructure, technology and financing. In turn, Argentina’s classic export basket of soybeans and oil complements China’s demand,” says Girado.
Not a minor detail, in addition to productive financing, Argentina negotiated a swap with China in 2014 that was maintained during successive governments. Is about an exchange of currencies that become part of the reserves without generating any cost until they are used, and that Alberto Fernández extended in principle until 2023.
The agenda of potential Russian investments is not official, although there are some concrete facts that can help put it together. The most recent specific investment was in railway, when on December 29 the government awarded the tender for 70 electric trains to the Russian private company TMH for 864.2 million dollars. The second thing that is in the process of negotiation is the investment in hydrocarbons. The Russian company Lukoil has an interest in Vaca Muerta and in joint developments with YPF. It could provide capital for both inshore and offshore exploitation.
In the task of interpreting possible lines of Russian financing, the deputy dean of the Faculty of National Defense (Fadena), Gonzalo Cáceres, highlights three of the cooperation memorandums signed by both countries. the of atomic Energy, within the framework of which the Russian public company Rosatom plans to participate in the development of a nuclear power plant in Argentina and even carry out research for peaceful purposes. Another memorandum is mining exploration and the one of cooperation in financial terms between the Bank for Investment and Foreign Trade and the Russian Bank for Regional Development.
The profiles of both countries are similar, although with asymmetries of capital and history: “It is more difficult for the Russians because they inherit a geopolitical relationship with the region. Russia must reposition itself after the debacle of the Soviet Union, while China is already entering with a market economy directed by the state. China has a lot of capital and a very important strategic project – the Belt and Road Initiative – with a significantly greater deployment in terms of infrastructure and geopolitics than Russia”, reflects Cáceres.
In matters of defending Both countries have something to contribute: “Due to the Madrid agreements, Argentina is unable to buy military technology that has British components. As North Atlantic technology generally has a British component, in order for Argentina to have access to certain military technology, it must look to Russia and China. That is why Minister Taiana is evaluating the purchase of military aircraft from these countries,” continues Cáceres.
The hustle and bustle caused by this trip, especially in public opinion in the framework of negotiations with the IMF, is underestimated by analysts. “The United States and China are experiencing a hegemonic transition techno-commercial war and the reality is that Argentina does not play in that league. Buying us to be on one side or the other is the worst position, that is why we must always aim for multilateralism”, reflects María José Haro Sly, magister at the School of the Silk Road at Renmin University (China).
“We have an autonomous and independent foreign policy that recognizes that there is a multipolar world and Argentina must have relations with all the poles of power that are in the world today,” he complements in dialogue with PageI12 the Argentine ambassador to Russia Eduardo Zain. “Foreign policy must be de-ideologized, if we had continued with the ideological fanaticism of Cambiemos, Argentina would not have had vaccines in December 2020,” he adds.
Cáceres complicates this discussion: “Trade relations do not begin with this trip, the agreements date from the 2000s and are children of a time when the region looked to the same place. That path did not completely unravel since at least with Russia, although at a different pace, Macri gave them continuity. possibility of default with the Fund may cause this agreement to be strengthened But the relationship is already started.
There is an armed narrative every time a Chinese investment in the country is announced: that they come with their technology, that they do not generate labor, that the conditions they impose. Analysts consulted by PáginaI12 link these sayings more to prejudice than reality, understanding that investments from the East and West are analyzed with different standards. “These are countries that are going to defend their interests. We must always be alert, but in the dominant culture there seems to be no alert when the reference is to European companies,” says Jorge Kreynes, secretary of international relations of the Argentine Communist Party.
Conversely, China does not follow “the Western imperialist format, does not forcefully impose an economic relationship such as securing control of hydrocarbons in the Middle East via war, or its economic interests by financing dictatorships. China can generate economic dependence without being accompanied by a political-military imposition,” says Merino. What is important, beyond the country, are the agreements: “If Argentina signs agreements similar to those it signed with the West on primarization without technology development, this relationship will be nothing more than a new dependencyMerino says.
“Argentina has to establish a much more strategic relationship with China so that at the same time that we can export commodities we can add value to production,” agrees Haro Sly, adding that, until now, “the agreements with China in terms of technology and use of labor were generally more in favor of Argentina. China there is room for negotiation, there is no closed package as most international organizations have. But you have to have a strategy and good negotiators.”