91 European Community cost Argentina as much as $40M a week (Schumacher, 1982). Even after the lifting of sanctions in 1982, Argentina’s economic troubles continued, with inflation soaring to hyperinflation levels of 2600% by 1989–1990 (Pou, 2000). Restoring relations between the two nations would continue to prove difficult. In 1983, the UK orchestrated a meeting between the Argentine president and the UK prime minister ostensibly aimed at restoring relations. Unfortunately, perceptions of the agenda for the meeting differed; Argentina was under the impression the meeting was to talk sovereignty, whereas the UK wanted to focus on restoring previous diplomatic relations. As a result, there was no progress, and tensions remained high until 1989 when the conversation was renewed (Evans, 1991). CarlosMenem,President-elect, recognized Argentina’s deteriorating economy and the need to normalize diplomatic relations with Europe, starting with the UK. Menem helped develop the Formula for Sovereignty. This statement focused on normalizing the two countries’ relationship, including forming agreements for the fishing and hydrocarbon industries around the Islands (Ruzza, 2011). In 1990, full diplomatic relations were reestablished without mentioning the sovereignty dispute (Evans, 1991). Reestablished in the international community, Argentina began to regain economic and social stability. By moving past the symbolic dispute, both countries saw a rise in GDP over the next year; in fact, Argentina’s GDP almost doubled (World Bank, 2021). Despite the diplomatic normalization, Argentina continued to seek sovereignty over the Islands. During the 1990s and the early 2000s, relations between the two countries were relatively stable (Brambilla et al., 2018). However, Cristina Kirchner, during her presidential campaigns and two presidential terms, starting in 2007, emphasized reclaiming Argentina’s Islands. Specifically, during her second term, Kirchner leveraged the thirtieth anniversary (2012) of the war to capitalize on the dispute’s nationalistic symbolism to fuel her populist appeal, commenting repeatedly about the Islands as an example of UK colonialism (Carroll, 2012). In response to this heated rhetoric, the UK increased military power on the Islands. Kirchner replied, “Don’t worry. Don’t spend another pound sterling on defending the Malvinas. Spend your money feeding the English, on providing jobs for your young people and a better quality of life for the British, because we are not a threat to anyone” (Bronstein, 2015). Confrontational nationalist rhetoric such as this is unlikely to advance Argentine diplomatic goals. Kirchner was perpetuating a hostile relationship with the UK and the Islands that weakened rather than strengthened Argentina’s position. Solution Scaffold In short, for decades, political gain has incentivized Argentine politicians to stand strong on the sovereignty claim, but this position is not sustainable or attainable. The hydrocarbon industry’s instability, Brexit renegotiations combined with the EU-Mercosur agreement, and international pressures around the dispute make this the optimal time to end this sovereignty issue. Analysis of these three key areas leads to a proposed scaffold supporting a mutually acceptable long-overdue solution to the dispute. Hydrocarbon Industry Under the Formula for Sovereignty, discussed earlier, the Joint Declaration was signed in 1995. The Declaration guaranteed joint UK-Argentine cooperation in oil exploration around a specific part of the Islands’ exclusive economic zone (EEZ). Nonetheless, the Declaration eventually failed after analysis determined that hydrocarbon resources were not attainable from the defined area. Following this failure, the two countries did not expand the Declaration to co-explore other areas in the EEZ (Ruzza, 2011). In 2007, the Declaration was officially severed by Argentina to emphasize their stance on the sovereignty of the Islands by eliminating all ties with the UK (Pinkerton, 2015). Separately, oil exploration continued and accelerated in 2010 when oil was discovered at an undersea hydrocarbon basin 118 nautical miles north of the Islands. The basin has been estimated to hold as much as 1.7B barrels of crude oil (Tomic, 2021; Hurst, 2020).
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