PUERTO VALLARTA On the second day of the World Economic Forum on Latin America, things were calming down after Tuesday when Spains Mariano Rajoy had launched a heavy artillery attack against Argentina.
The verbal fireworks between Spain and Argentina has now subsided. And there are fewer people milling about the hallways, making it all that much trickier for me to find an Argentine participant prepared to comment on President Cristina Kirchners controversial decision to nationalize the partly Spanish-owned oil company YPF. I can forget about tracking down anyone from Kirchners staff the funcionarios K, as theyre called in Argentina. There are hardly any Argentine business leaders around either.
My question is whether the Spanish governments fierce reaction to the takeover is primarily based on the magnitude of the assets in question, the complicated place that Argentina occupies in the Spanish imagination or on the current economic crisis in Spain. After all, Repsol is not the first Spanish company thats been nationalized recently in Latin America. Hugo Chávez nationalized Banco Santander in Venezuela. Bolivias Evo Morales seized control of Repsols YPFB Andina, although he did so without completely taking it away from the company. But you Cristina?
But as much as I wander through the corridors, I dont hear any Argentine accents. Until suddenly, bingo! A member of the country's Jewish community who says hes Argentine sort of. It turns out hes lived in Peru for the past 25 years. The man is cautious, but he does have an opinion. He says there are various factors that can explain YPFs nationalization, but the main reason is the influence of a member of the Economic Ministry who seems to have substantial policy sway -- and happens to hold the unorthodox view that businesses should not be allowed to generate more that 6% in profits. And, well, to make that argument here.... he says, looking around without finishing his thought, as if someone might be listening.
The idea that he mentioned isnt completely unheard of. Hugo Chávezs economic minister has gone on record saying basically the same thing.
Thats not, of course, the conventional way of thinking. Experience has shown that putting an ethical cap on profits is a great way to scare off investors and condemn countries to international ostracism. But maybe Cristina Kirchner was thinking of a tailored nationalization: one thats not based on anti-business or anti-foreigner ideology, but rather on anti-Spanish feelings. That would be a reason for the wound to sting that much worse in Madrid.
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