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Viewing cable 06BUENOSAIRES499, PRESIDENT KIRCHNER DELIVERS STATE OF THE NATION

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Reference ID Created Released Classification Origin
06BUENOSAIRES499 2006-03-03 14:41 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXRO7068
RR RUEHRG
DE RUEHBU #0499/01 0621441
ZNR UUUUU ZZH
R 031441Z MAR 06
FM AMEMBASSY BUENOS AIRES
TO RHEHNSC/NSC WASHDC
RUEHC/SECSTATE WASHDC 3676
INFO RUEHAC/AMEMBASSY ASUNCION 5389
RUEHBR/AMEMBASSY BRASILIA 5177
RUEHCV/AMEMBASSY CARACAS 0858
RUEHLP/AMEMBASSY LA PAZ 4004
RUEHMN/AMEMBASSY MONTEVIDEO 5369
RUEHSG/AMEMBASSY SANTIAGO 4988
RUEHRG/AMCONSUL RECIFE 0113
RUEHRI/AMCONSUL RIO DE JANEIRO 1898
RUEHSO/AMCONSUL SAO PAULO 2794
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RHEBAAA/USDOE WASHDC
RHMFISS/HQ USSOUTHCOM MIAMI FL
UNCLAS SECTION 01 OF 03 BUENOS AIRES 000499 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
WHA PATRICK DUFFY 
NSC FOR DAN FISK 
SOUTHCOM FOR POLAD AND J5 FOR JUAN RENTA 
USDOC FOR 4322/MAC/OLAC/BASTIAN/PEACHER 
 
E.O. 12958: N/A 
TAGS: ECON EINV ENRG AR
SUBJECT: PRESIDENT KIRCHNER DELIVERS STATE OF THE NATION 
ADDRESS 
 
 
------- 
Summary 
------- 
 
1.  (SBU) Kirchner delivered a state of the nation speech to 
congress on March 1st.  He began the speech by repeating many 
of the themes that he has mentioned in earlier speeches, such 
as Argentina's continuing struggle to emerge from "hell."  He 
claimed that Argentina has now entered a process of 
"sustained growth," noting that what was once interpreted as 
a temporary recovery is now the beginning of a new era of 
genuine development.  His speech highlighted the proactive 
role that the state is expected to play in expanding 
productive infrastructure, consolidating economic activity, 
creating employment, and increasing demand for goods and 
services.  The speech also addressed GOA social policies that 
seek to promote "inclusion, equality and social justice." 
Kirchner's pronouncements on foreign policy issues during the 
speech were largely a reinforcement of long-standing 
Argentine policy.  Kirchner's speech was moderate and 
centrist, containing little of his past populist rhetoric. 
He avoided speaking about the bilateral relationship with the 
U.S., but his strong words of support for counterterrorism, 
counternarcotics, and peacekeeping operations indicate that 
we can expect continued cooperation in these key policy 
areas.  End Summary. 
 
--------------------------------- 
Argentina's Growth is Sustainable 
--------------------------------- 
 
 
2.  (U) President Nestor Kirchner delivered a State of the 
Union speech to the combined houses of Congress on March 1. 
The Embassy was represented by the DCM.  Kirchner began the 
speech by repeating many of the themes that he has utilized 
in earlier speeches.  He reminded the audience that Argentina 
is expending a great effort to overcome the worst crisis in 
its history and emerge from hell.  He also observed that 
Argentina's recurrent crises have gotten in the way of 
constructive long-term policies.  He then highlighted the 
importance of Argentina's having renegotiated its private 
debt, noting that 2005 would be remembered as the year in 
which Argentina had found a "strategic solution" to the 
problem of its foreign debt.  This solution would both avoid 
more sacrifice for Argentina's people and strengthen the 
country's autonomy, Kirchner said. 
 
3.  (U) Kirchner claimed that Argentina has now entered into 
a process of "sustained growth," noting that what was once 
interpreted by analysts as a temporary recovery is now the 
beginning of a new era of genuine development that will leave 
behind years of persistent decline.  He then enumerated the 
country's economic achievements: fiscal discipline; debt 
reduction; monetary prudence; a trade surplus; increased 
reserves; vigorous growth and diversification of exports; 
increased productive investment; reversed capital flight; 
millions of new jobs; increased purchasing power for salaried 
workers; reduced poverty and misery; and improved 
distribution of income (see Buenos Aires 419 for Embassy's 
take on income distribution).  Kirchner then backed up these 
accomplishments with numbers, including: 37 consecutive 
months of economic growth; a 36 percent increase in GDP since 
mid-2002; an increase in the export and import substitution 
sectors reaching 36 percent of GDP; a 50 percent growth in 
the industrial sector; record grain production of 84 million 
tons; a more than 40 percent increase in the construction, 
transportation and communications sectors; a noticeable 
improvement in the banking sector; an increase in investment 
to 21 percent of GDP during the fourth quarter of 2005.  He 
also highlighted the repayment of Argentina's USD 10 billion 
 
BUENOS AIR 00000499  002 OF 003 
 
 
in IMF debt, a line that brought the loudest applause from 
Congress. 
 
4.  (U) Kirchner's speech highlighted the proactive role that 
the state is expected to play in expanding productive 
infrastructure, consolidating economic activity, creating 
employment, and increasing demand for goods and services.  He 
announced that the 2005 budget for public works had increased 
by 79 percent over the previous year.  Almost half of this 
money was spent on housing.  The rest was spent on potable 
water, hospitals, schools, universities, highways, flood 
control, railroads, navigable railways and ports.  He also 
made mention of the efforts being made to increase the supply 
of energy to meet the demands of the rapidly growing economy. 
 Those efforts include the expansion of power of gas lines, 
an increase in the capacity of the Yacyreta Hydroelectric 
project, the completion of the Atucha II nuclear power plant, 
and the construction of thermal power plants.  Almost all of 
this investment was initiated or supervised by the 
increasingly important Ministry of Planning. 
 
5.  (U) The speech also addressed social policies which seek 
to promote "inclusion, equality and social justice," 
replacing "the vision that existed in previous decades that 
merely provided assistance".  These policies include: the 
construction of Community Integration Centers to promote the 
government's social and health projects; the Family Plan to 
support needy families; the Federal Health Plan to promote 
primary health care; the Argentine Birth Plan to reduce 
infant mortality; the National Sexual Health and Procreation 
to reduce adolescent birth; the National Medicine Policy to 
promote the use of generic medicine, and the National AIDS 
Plan to provide free medicine to AIDS patients.  Kirchner 
also highlighted the construction of new schools, an increase 
in the number of scholarships for poor children, 
back-to-school programs, literacy programs, and the recently 
approved Education Finance Law, which seeks to increase 
government spending on education to 6 percent of GDP by 2010. 
 
 
--------------------- 
Foreign Policy Issues 
--------------------- 
 
6.  (U) Kirchner's pronouncements on foreign policy issues 
during the speech were largely a reinforcement of 
long-standing Argentine policy.  He reaffirmed the GOA's 
commitment to fight against terrorism and narcotrafficking. 
Kirchner noted Argentina's ongoing efforts to support 
peacekeeping operations and to promote the respect for human 
rights in the region.  Kirchner also voiced his support for 
the peaceful use of nuclear energy.  Kirchner's only 
extensive comments on Argentine relations with another 
country came when he called on his Uruguayan counterpart to 
institute a 90-day halt in the construction of two 
controversial paper mills in order to allow time for a 
technical commission to evaluate the plants' environmental 
impact (See Reftel Buenos Aires 486 for more on the paper 
plant dispute).  (Comment: Local press reports from March 2 
indicated that Uruguayan Vice-President Rodolfo Nin Novoa 
rejected Kichner's request as "impertinent."  However, on 
March 3 the local press quoted Uruaguay's Vice Foreign 
Minister Belela Herrera as saying that Uruguayan President 
Tabare Vasquez "was moved by Kirchner's words, including his 
appeal to dialogue and brotherhood."  End Comment). 
 
------- 
Comment 
------- 
 
7.  (SBU) President Kirchner's speech was moderate and 
 
BUENOS AIR 00000499  003 OF 003 
 
 
centrist, containing little of his past populist rhetoric. 
The discourse broke little new ground and largely was a 
technical summary -- delivered in a dry monotone -- of the 
Kirchner administration's achievements in bringing Argentina 
out of the severe political and economic crisis of 2001-2002. 
 Argentina's recovery over the past three years is indeed 
impressive and Kirchner utilized scores of figures to 
document his government's accomplishments.  Kirchner avoided 
speaking directly about the U.S.- Argentina bilateral 
relationship, but his strong words of support for 
counterterrorism, counternarcotics, and peacekeeping 
operations indicate that we can expect continued cooperation 
with the GOA in these key policy areas.  End Comment. 
 
8.  (U) To see more Buenos Aires reporting, visit our 
classified website at: 
http://www.state.sgov.gov/p/wha/buenosaires.< /a> 
GUTIERREZ