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### Viewing cable 07BUENOSAIRES1888, CRISTINA IN HER WORDS: WILL ARGENTINA'S

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07BUENOSAIRES1888 | 2007-09-21 14:02 | 2010-11-30 16:04 | CONFIDENTIAL | Embassy Buenos Aires

`

    VZCZCXRO4533
    PP RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHQU RUEHTM RUEHVC
    DE RUEHBU #1888/01 2641441
    ZNY CCCCC ZZH
    P 211441Z SEP 07
    FM AMEMBASSY BUENOS AIRES
    TO RUEHC/SECSTATE WASHDC PRIORITY 9297
    INFO RUEAIIA/CIA WASHINGTON DC PRIORITY
    RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
    RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
    RUCNMRC/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS

` `

    C O N F I D E N T I A L SECTION 01 OF 03 BUENOS AIRES 001888

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 09/21/2022
    TAGS: PGOV PREL OVIP EFIN EINV EAIR AR
    SUBJECT: CRISTINA IN HER WORDS: WILL ARGENTINA'S
    PRESIDENTIAL FRONT-RUNNER BE A BETTER PARTNER FOR US?

    REF: A. BUENOS AIRES 1883
    ¶B. BUENOS AIRES 1809
    ¶C. BUENOS AIRES 1777

    Classified By: DCM Tom Kelly for reasons b, d.

    ¶1. (C) Summary. A well-briefed, confident Cristina
    Fernandez de Kirchner (CFK) described her policy priorities
    to the Ambassador on September 20, a few days before she
    departs for a five-day program in New York. Although she
    defended GOA positions on controversial economic issues, CFK
    expressed a strong desire to promote foreign investment,
    increase scientific and educational exchange with the United
    States, and "tell it like it is" with American policymakers.
    The discussion's conciliatory content and tone confirms our
    expectation that CFK will prove a more reliable, trustworthy,
    and accessible partner of the United States than her husband,
    Nestor Kirchner. End Summary.

    ¶2. (C) CFK met with the Ambassador for 45 minutes at the
    Presidential Residence in Los Olivos on September 20.
    Argentina's first lady and presumptive next president was in
    full command of her brief, speaking without notes on a broad
    range of topics. At one point, noting that she and the
    Ambassador were reviewing topics that would resurface
    throughout her New York trip, she said (referring to her
    travels and speeches), "This is good preparation, but hey,
    I'm already prepared!" She was gracious and relaxed
    throughout, not rushing through any part of the conversation
    and listening as well as talking. The meeting was CFK's
    second with the Ambassador; in contrast, President Kirchner
    has never met privately with the Ambassador. She also went
    out of her way to ask the Ambassador to "send greetings to
    Shannon," whom she recalled meeting early on in Washington
    just before the Assistant Secretary was confirmed by the
    Senate.

    Paris Club: Willing to Deal "Without Preconceptions"
    ------------------------------------

    ¶3. (C) After CFK previewed her schedule in New York (ref A),
    the Ambassador noted the great international interest in her
    policy views. He commented that CFK's interest in the world
    and willingness to countenance policy changes, especially in
    the economic realm, were well-received abroad, including in
    the United States, as is her evident openness to dialogue.
    The Ambassador also mentioned issues that may well draw
    questions from journalists, businessmen, and others during
    her program, including prospects for a deal with the Paris
    Club, the investment climate, prospects for inflation, and
    the GOA's relationship with Iran and Venezuela.

    ¶4. (C) CFK replied in great detail on economic themes, but
    refrained from commenting on Iran and Venezuela. On the
    Paris Club (PC), she stressed Argentina's desire to reach an
    agreement, but reiterated the current government's insistence
    that a deal not be conditioned on a GOA accord with the IMF.
    She said that Argentina's attitude stemmed not from a
    anti-IMF bias, but from a conviction that IMF policies as
    currently constituted are anti-growth -- and therefore
    unacceptable. That is why, in her view, the IMF had
    experienced a "serious loss of prestige in Latin American
    societies." "If we don't grow," she continued, "we can't
    pay. You can't collect debts from the dead."

    ¶5. (C) CFK characterized debt agreements reached by previous
    Argentine governments as illusory, made by desperate
    governments that never intended to repay. The current
    government, and the one that she hopes to lead, sought to
    break what she called "a cycle of lies" and restructure
    Argentine debt without inhibiting growth. Such a
    negotiation, she said, would need to occur "without
    preconceptions," and both sides should come to the table with
    flexibility and an open mind. She claimed that, during his
    campaign swing through Argentina (ref B), French candidate
    for IMF Managing Director Strauss-Kahn had expressed sympathy
    for Argentina's approach and criticism of the IMF's track
    record in Argentina. She acknowledged, however, that "he's
    running for office, so maybe he was just telling us what we
    wanted to hear." The Ambassador said that the United States
    stands ready to engage constructively to move to a Paris Club
    solution.

    ¶6. (C) The Ambassador mentioned the issue of bond-holdots
    as another potential topic that CFK will face in New York,
    noting that the U.S. bondholders are carrying out a
    well-organized effort to win support for their cause. CFK
    indicated awareness of the lobbying resources holdouts bring
    to bear and their negative attitude towards the current

    BUENOS AIR 00001888 002 OF 003

    government. She said that she had encountered their
    publicity campaign during her recent trip to Germany, and
    knew they were active in Japan, too. At the same time, she
    offered little hope that the holdouts would get a deal
    anytime soon, noting that a law circumscribes what the
    government can offer them. She told the Ambassador that "I
    know this isn't what you want to hear," but said that
    previous Argentine leaders would tell foreign Ambassadors
    what their interlocutors wanted to hear, not what they really
    thought or intended to do. She and her husband were
    different, she insisted; they told it straight. CFK said
    that she understood that Americans valued straight talk, and
    she hoped that this quality would earn her trust and respect
    in the United States.

    Foreign Investment: Bring It On
    -------------------------------

    ¶7. (SBU) CFK said that the GOA's main motivation in striking
    a deal with the Paris Club was to entice foreign export
    credit agencies to go back on cover in Argentina,
    facilitating her plans to bring more foreign investment here.
    She noted that foreign investment in certain sectors was
    already booming. Auto companies, including Mercedes-Benz,
    Peugeot, Ford, and GM were pumping tens of millions of
    dollars of new investment into their plants, with many adding
    new assembly lines and exporting much of their output.

    ¶8. (U) CFK reserved her greatest enthusiasm for Argentina's
    progress in attracting investment in the information
    technology sector as a means to expand Argentina's global
    economic role. She noted proudly that IT represented the
    fastest growing sector in the economy during her husband's
    presidency. She expected great things from the sector in the
    future. "We have great soccer players in Argentina because
    our kids play so much soccer," she said. "Now they spend all
    their time on computers, so I know that there's an Argentine
    Bill Gates out there. We just have to find him." The
    Ambassador agreed that this was an area of great potential.
    He noted the significant U.S. investment in this sector,
    including the fact that IBM is the largest U.S. employer in
    Argentina. He also made a pitch for quick approval of Turner
    Broadcasting's purchase of Claxion, a local audiovisual
    company, which will lead to Argentine creations being
    distributed throughout Latin America.

    Playing Defense: Energy, Inflation
    ----------------------------------

    ¶9. (SBU) Despite her expression of enthusiasm for foreign
    investment, she was defensive about charges that the current
    government is attacking foreign investors in the Argentine
    energy sector (septel). She characterized Exxon's apparent
    exit from the Argentine market as the result of a regional
    draw-down in Latin America, and argued that "the energy
    sector is a problem everywhere right now." She said that
    private companies miscalculated domestic energy demand over
    the past few years, failing to anticipate the government's
    success in achieving extremely rapid rates of growth. Now,
    there was little idle capacity in Argentina's energy sector.
    The GOA, she insisted, was doing its part, presiding over the
    construction of thousands of kilometers of new pipelines and
    seeking new sources of supply.

    ¶10. (SBU) CFK was also defensive when she responded to
    concerns that the GOA was manipulating economic statistics to
    keep Argentine inflation numbers down. She said that there
    were several biases in the way that the government's
    statistical institute (INDEC) had previously collected price
    data. She claimed that it did not account sufficiently for
    seasonal variations in price data; collected food data in
    posh food emporiums rather than in the modest groceries where
    most Argentines shop; and focused on private school costs,
    while the vast majority of Argentines sent their children to
    public schools. She said that Argentina had revised its
    inflation methodology six times since the 1930s. The
    political opposition, she said, was behind the claims that
    current methodological changes reflected a government plot to
    understate inflation. She also blamed the opposition for the
    growing warnings about electoral fraud in Argentina, which
    she dismissed as "bizarre." CFK did acknowledge that the GOA
    needs to settle with clarity the methodological issues as
    well as to resolve the union problems troubling the
    statistical institute.

    Future Economic Goals
    ---------------------

    ¶11. (C) CFK returned to economic growth as the most

    BUENOS AIR 00001888 003 OF 003

    important objective of the government that she intends to
    lead. She said that, if Argentina achieves positive growth
    in 2007 and 2008, it will represent the first time in a
    century that the country has grown for six straight years.
    If its economy continues to grow at rates of five to six
    percent for another decade, she continued, Argentina would
    become "unbeatable."

    ¶12. (SBU) A key sector for the country's future, she said,
    was tourism, an area in which her country had enormous
    undeveloped potential. With the rise in ecotourism, the
    wealthiest tourists were looking for unspoiled, safe venues,
    which Argentina had in abundance. She noted that Argentina
    experienced a travel boom after the Asian tsunami, as
    tourists sought safer places in which to experience nature.
    The Ambassador interjected that for the tourism sector to
    achieve its potential, Argentina needed to address its
    dysfunctional domestic aviation sector. She agreed,
    identifying reform of domestic aviation as "one of our great
    challenges." Without referring specifically to the
    strike-prone national airline Aerolineas Argentinas, she
    identified two specific problems in the sector: a need for
    more resources and a conflictive labor environment in which a
    handful of combative unions undermined all attempts to turn
    the sector around.

    Other Issues: Exchanges, TIP
    ----------------------------

    ¶13. (SBU) The Ambassador raised trafficking in persons (the
    need to pass a federal law) and the importance of expanded
    educational and cultural exchanges, especially among youth.
    He asked for the Senator's support. CFK:

    -- expressed strong interest in cultural and educational
    exchanges with the United States, including an upcoming
    Buenos Aires summit of hemispheric women leaders organized by
    U.S. NGO Vital Voices;

    -- told the Ambassador that Argentina "must not fail to take
    advantage of your scientific resources; they're the best in
    the world".

    -- reassured the Ambassador that legislation to criminalize
    trafficking in persons would pass the Argentine Congress
    after the October elections "without any great difficulty."

    Comment
    -------

    ¶14. (C) The discussion's conciliatory content and tone
    confirmed what we have observed in CFK's speeches and
    gestures with increasing frequency: Argentina's presidential
    front-runner seeks a rapprochement with the United States.
    CFK seems to understand that a pragmatic, enmity-free
    relationship with Washington will buy Argentina leeway on a
    number of critical financial and geopolitical issues. At the
    same time, this forward-leaning attitude is unlikely to
    presage the next government's repudiation of the current
    regime's nationalist, populist policies. CFK's defense of
    GOA positions on the IMF, the investment climate, the energy
    sector, and inflation numbers during this private discussion
    suggests an unwillingness to break with the heterodox
    policies of her husband. But even if the charm offensive is
    calculated rather than heart-felt, there is no mistaking the
    opportunities that await the USG beyond the Argentine
    presidential election. CFK's conversation with the
    Ambassador confirms our expectation that she will prove a
    more reliable, trustworthy, and accessible partner of the
    United States. That does not, however, take away from the
    challenges we will face in forging solutions to such issues
    as the Paris Club or bondholders' outstanding debt.
    WAYNE

`