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Viewing cable 07BUENOSAIRES2155, MEDIA REACTION; ARGENTINE PRESIDENT-ELECT CRISTINA KIRCHNER

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Reference ID Created Released Classification Origin
07BUENOSAIRES2155 2007-11-01 14:02 2011-08-25 00:00 UNCLASSIFIED Embassy Buenos Aires
VZCZCXYZ0019
OO RUEHWEB

DE RUEHBU #2155/01 3051402
ZNR UUUUU ZZH
O 011402Z NOV 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9628
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT
UNCLAS BUENOS AIRES 002155 
 
SIPDIS 
 
STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC, 
WHA/EPSC 
CDR USSOCOM FOR J-2 IAD/LAMA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KPAO OPRC KMDR PREL
SUBJECT: MEDIA REACTION; ARGENTINE PRESIDENT-ELECT CRISTINA KIRCHNER 
CHALLENGES; US-PERUVIAN FTA; 11/01/07 
 
 
1. SUMMARY STATEMENT 
 
Major international stories today include foreign analysts' and 
Argentine businessmen's expectations on the challenges ahead for 
Argentine President-elect Cristina Fernandez de Kirchner; and US 
House Ways and Means Committee passing an FTA between the US and 
Peru. 
 
2. OPINION PIECES AND EDITORIALS 
 
- "Businessmen hail CFK, foreign analysts frown" 
 
Cole Perry, contributor to liberal, English-language "Buenos Aires 
Herald," writes (11/01) "Local businessmen hailed the victory of 
Cristina Fernandez de Kirchner as the continuation of the 
government's economic policies and the promise of improvement in the 
industrial sector in Buenos Aires, a group of six chamber presidents 
said. The optimism contrasts with the predictions of foreign 
economists, who believe the next four years will mark the end of 
President Nestor Kirchner's luck and a difficult future for 
Fernandez. 
 
'With the arrival of Cristina not only do we anticipate the 
advancement of previous policies supporting the growth of the 
Argentine economy, but also an increase in investment that will 
allow us to move forward in the development of our sector,' Alberto 
Sellaro, president of the Chamber of Shoe Manufacturers, affirmed. 
 
"... Argentina's economy has grown roughly eight percent per year 
since President Nestor Kirchner came to power in 2003... Yet, 
consumer confidence is down 21% from an all time high in January and 
most Argentines expect inflation to rise above 20% next year - a 
problem for investment when more than 40% of the country's bonds are 
indexed by inflation, according to a survey by Torcuato Di Tella 
University. Added to that, the country has lost around 6 billion 
dollars a year in direct foreign investment between 2001 and 2005. 
 
"One of the main issues causing investor despondency is the 
lingering 6.3 billion dollar Paris Club debt. The Paris Club 
requires countries to have an IMF-sponsored economic program before 
they can renegotiate their Paris Club debt, but Argentina refuses to 
talk to the IMF... 
 
"Another complication is Argentina's inability to issue debt due to 
international restrictions stemming from Argentina defaulting on $ 
100 billion dollars in sovereign debt in 2002... This is part of the 
reason many believe if Cristina Fernandez continues her husband's 
economic model the economy may drift out of control, despite the 
certainty of local businessmen. 
 
"'There must be changes, otherwise inflation is not going to 
disappear and the Kirchners are going to lose power...' Michael 
Shifter, of the Inter-American Dialogue told 'Clarin' yesterday. His 
comments have been echoed by various foreign authorities. 
 
"'The consequence of Kirchner's policies has been to boost economic 
growth in the short term at the expense of growth in the medium and 
longer term,' Ricardo Amorim, chief Latin American economist at West 
L B AG in New York, told Bloomberg.co. Adding, 'Who is going to pay 
the bill? Very likely the next president: his wife.' 
 
"These criticisms hit their strongest pitch in the caustic 
Washington Post editorial published on Monday... 
 
"But, the pessimism of foreign analysts fails to dismay (Aldo) 
Karagozian, president of Argentina's largest textile lobby, or 
Sellaro. 'The 'Seora Presidenta' elect has the conviction that one 
of the pillars of the economy's growth is the industrial sector. 
This encourages us to believe in a future of development,' Sellaro 
said." 
 
- "The US emphasizes (CFK's) victory, although asking for 
'corrections'" 
 
Hugo Alconada Mon, daily-of-record "La Nacion's" Washington-based 
correspondent, comments (11/01) "Republicans, Democrats, US analysts 
and mass media share the same view regarding Cristina Fernandez de 
Kirchner. They underline her grand victory and hope she makes some 
'corrections' in order to meet the country's 'challenges,' but they 
are not that hopeful. 
 
"When opening a debate about Argentina's post-election reality, 
Peter Hakim, head of the Inter-American Dialogue, said yesterday: 
'Argentina is today better off than four years ago, although it 
faces some challenges. The question is when those challenges will be 
met.' 
 
"Claudio Loser, former IMF director for the Western Hemisphere, and 
Mark Falcoff, head of the American Enterprise Institute, agreed that 
the horizon seems more complicated than in recent years. 
 
"'Indicators suggest that patience with Cristina will be limited,' 
Loser explained, after seeing a gradual slump in the government's 
image. 'This will be in addition to serious economic difficulties, 
which is why Argentina is entering a very complicated period.' He 
calculated that local inflation is already over 20% per year. 
 
"Falcoff mentioned some areas of concern - security, inflation, and 
a deteriorated infrastructure, among others. 'But most worrisome is 
institutions... What happens is that when institutions do not work, 
people go out to the streets.' 
 
"... The Bush administration, just like Democrats, believes that the 
enigma will start to be solved with Cristina's first measures, such 
as the formation of her Cabinet... 
 
"The unknown questions about Argentina's future under a Cristina 
administration were also reflected in the US mass media... 
 
"The 'Los Angeles Times' said Fernandez de Kirchner 'will face 
serious challenges,' like inflation, the energy crisis or 'probably, 
an economic deceleration,' although it highlighted that she 'seems 
acutely aware that Argentina's economic well-being could be on 
tenuous ground.' 
 
"... Regarding the international scenario, 'The Houston Chronicle' 
said that Cristina will have to balance her friendly ties to the US 
and to Venezuelan Hugo Chavez.'" 
 
- "Another step towards a FTA between the US and Peru" 
 
Ana Baron, leading "Clarin's" Washington-based correspondent, 
comments (11/01) "After two years of ups and downs, a key US 
Congressional committee finally approved an FTA between the US and 
Peru, which means a great victory for the Bush administration's 
trade strategy in the region. 
 
"The US House Ways and Means Committee unanimously approved the 
deal, which practically assures its approval by Congress... 
 
"In November 2003, vis-`-vis the stagnation in FTAA negotiations, 
former USTR Bob Zoellick announced that the US would make progress 
on bilateral or bloc FTAs... 
 
"The US also seeks an FTA with Uruguay although this is not possible 
because Mercosur bylaws ban country-members from making such 
bilateral arrangements. 
 
"The agreement will ensure tax-free access for Peruvian goods to US 
markets... Peru expects this access will pave the way for a better 
climate for foreign investment... For the US, the deal will 
eliminate tariffs on 80% of US exports to Peru and more than 
two-thirds of agricultural exports. Remaining tariffs will be 
removed within 10 to 15 years. Under the deal, Peru will also open 
its banks, insurance companies and other services to US 
corporations." 
 
To see more Buenos Aires reporting, visit our 
classified website at: 
http://www.state.sqov.gov/p/wha/buenosaires 
 
KELLY