When I was last in the Falkland Islands, a little over two years ago, several thousand cruise ship passengers disembarked in the capital of Stanley (pictured here) on the day of my departure by air. In summer, when cruises bound for Antarctica or around Cape Horn stop here, the number of visitors can exceed the population of the town, which is about 2,100, and their presence is a major contributor to the Islands’ prosperity.
At present, that sector of the economy is vulnerable because, upset with oil drilling which is due to begin on the Islands’ continental shelf, Argentine president Cristina Fernández de Kirchner has decreed that all vessels proceeding from Argentine ports to the Falklands will need permits. Argentina, which claims the Islands as the “Malvinas” and briefly occupied them in 1982 before being ejected by a British naval task force, believes that South Atlantic oil rightfully belongs to Buenos Aires.
What directly spurred the president’s decree was the report of a freighter that was supposedly hauling drilling hardware - at least some tubing - from Argentina to the Islands. Its most direct impact, though, could be on the cruise lines that stop in Argentine ports such as Buenos Aires, Puerto Madryn and Ushuaia before proceeding to Stanley (or wildlife-rich offshore islands, as local immigration officials sometimes fly to meet arriving vessels there). Argentina's hope is that this will pressure the British to desist from drilling, but it could also ricochet - cruise lines might avoid or reduce their services to some Argentine ports.
At the same time, the president’s plunging popularity, due partly to a clumsy effort to sack the central bank president (though she ultimately prevailed), has convinced some observers that the shipping measure is a distraction. Many Argentine governments have done this, most notably the military dictatorship that invaded in 1982. According to columnist Michael Soltys of the Buenos Aires Herald (link available after 2 p.m. Buenos Aires time daily), the question is whether the permits “merely represent a fresh outburst of gesture politics, or whether the administration will yield to the classic temptation of seeking an overseas distraction from domestic woes in the form of a foreign scapegoat.”
Nobody expects any military action, and in fact Fernández has taken the diplomatic route by seeking support from other Latin American countries at the current Summit of Latin American and Caribbean Unity in Cancún, México. There, 32 countries have unanimously condemned Britain’s drilling, but their support is primarily rhetorical: as in 1982, they are saying “We’re with you all the way, Argentina - good luck.” None of these countries is likely to take any concrete measures against Britain, and even the president’s own decree may be weak - she has already foresworn any sort of blockade.
The great majority of Islanders, for their part, support offshore drilling, especially as declining squid stocks put their prosperity at some risk. Should recoverable oil be found in commercial quantities, it could eclipse both fishing and tourism in the local economy. Still, if it's accompanied by political turmoil and pollution as in many parts of the world, oil can be more a curse than a blessing.