Culture Change Media International Editor
New York, NY - May 10, 2004
sequel to article of May 3

As mentioned in the May 3, 2004
article (see below), President Kirchner was bound to travel to the United States
and then unveil a new energy policy for Argentina upon his return. 

Indeed, Mr. Kirchner came to New
York on his way to Washington, and he was involved on May 5th in two events in
New York City. 

(A)  The first event was an Argentina Forum organized by the Council of The
Americas in association with the Argentina-American Chamber of Commerce.  The Forum consisted of three panels: I. Economic Conditions and Outlook, II.
International and Domestic Political Agenda, and III. Reintegration and
International Capital Markets. 

The participants included academics from departments of economics, Wall Street
firm managers, banking executives and the Governor of the Province of San
Juan.  It was on the one hand a presentation of facts pointing out that
Argentina should deserve better treatment from the world economic community, now
that it has a government that is bound to do things better.  On the other
hand there were arguments that after three debt crises there is no capital
market in Argentina there is plenty of local currency available, but because of
fear of inflation there is no long term lending available except in
dollars.  Foreign private investment will make no move unless there is
security that comes from a stable hand of Government.  One academic pointed
out that Mexico’s "tequila crisis" —

the introduction of the "no pago" policy, when it comes to country
bankruptcy — has not led yet,
after ten years, to a complete debt restructuring, so one cannot expect already
a clear situation for Argentina.  Furthermore, the US, when it did away
with the gold standard, did effectively implement also a "no pago"

situation by its own dollarization method.  Also, saying that "one
cannot import government to Argentina," and that the government must remove
the distortions, points out that it takes time.  On the other hand, the
Argentina situation may indeed show that the major crisis may be over, and that
crisis measurements can be removed. 

The Luncheon speaker was President Nestor Kirchner.  Questions to him were
allowed only from the corporate and Wall Street tables.  The only question
from the press was by the correspondent from Bloomberg News.  The rest of
the press was supposed to be "observing press" as it was put to me by
one of the organizers.  In this configuration, the energy crisis of
Argentina was being mentioned as a factor pointing for need of investment. 

This configuration did not allow presentation of any thoughts "outside the
box".  Nowhere was any mention of alternate fuels, though the need of
energy efficiency was mentioned; but, the seemingly gratifying way of looking at
the situation was that by now Argentina is in its second year of very good
growth figures, after the years of retrenchment before the collapse.  The
need of capital investments in further oil and gas development was rather the
Wall Street preferred method. 

President Kirchner spoke of "Sustainable Growth," and making the
economy more equitable, it will deal with the debt taking into consideration
"social needs." 

(B) The other event was May 5, 2004, in the evening.  A second event was
organized by the "Argentina Observatory," a Graduate Program of the
New School University in New York City.  The President of the "Observatorio"

is the First Lady of Argentina: Senator Christina Fernandez de Kirchner, the
wife of the President.  The "Observatorio" Program Director is
Prof. Michael Cohen who worked in the World Bank’s office in Buenos Aires in
1998-99 and is President of the Board of the International Institute for
Environment and Development —

America Latina (IIED-AL).  He organized the evening and I was hoping that
finally we may hear of something that points a new way for a new
Argentina.  After all — that
was why I followed the President that day.  I was somewhat disappointed as
the structure of the event turned out to be mainly a two- person conversation
between the President and Princeton University Professor Paul Krugman, the New
York Times columnist. 

The very interesting discussion between the person in charge of a country and
the economics theoretician turned around a wide range of topics, but I did not
find there the points I was looking for.  Professor Krugman pointed out
that there were certain factions in the US that wanted "to impose on
Argentina what they wished the US to be."  The President pointed out
that Argentina got US$90 billion in further loans when it was clear the economy
was going nowhere and one month before the collapse, Argentina was still
presented as the poster child of the World Bank.  The President
complimented Professor Krugman who was the first to predict the impending
collapse.  But  when the issue of energy was finally mentioned, Prof.
Krugman said that natural gas prices frozen at pre-crisis level are not giving
incentive to the private companies, so finding a growth strategy will be very
hard.  Here the President pointed out how Argentina, via wrong-headed
privatization, was left without a national oil or gas company.  Spanish
Repsoil owns now the Argentinian IPF, whicht made 2.6 billion pesos and
reinvested nothing in additional gas, saying they were tormented by the value of
the peso.  They exported the gas to Chile and took the money, so then a law
was needed to give preference to the local market.  Chile has no oil and
gas but does have a national company.  Argentina under President Kirchner
will expand the San Juan gas pipeline and will bring in a pipeline for the gas
from Bolivia. 

Professor Krugman mentioned the California energy problems and included large
cars running on CNG but stopped short of discussing alternatives.  No ideas
of "culture change" in these exchanges.  The future according to
the President seems to be within a local common market that includes Argentina,
Brazil and Bolivia — seemingly
fueled by Bolivian gas exports. 

I did not get to ask a question as very little time was left by the discussion
between the two protagonists.  Nevertheless, this time President Kirchner
and the First Lady remained in the hall to interact with the audience.  I
had the chance to ask the President about the possibility of using alternate
sources of energy — specially now
as the U.N. Climate Change meeting and the idea of the use of Renewable Energy
will be coming to Buenos Aires this December?  The President asked me if I
am talking about the hydrogen idea.  When I said "no, rather other
forms of energy," he said he was interested and one of his associates gave
me his card upon the President’s request.  I intend thus to follow up after
the impending release of the energy policy on May 11.  It is clear to me
that except for the US-proposed long-term hydrogen program, no other information
has yet reached the President and I think that the organizers of Renewable 2004
meeting had better take notice of this.  Going in December to Buenos Aires
is indeed a one-time chance to work on location with a country that is in need,
and I believe available to new ideas, provided these can be funded by developing
local production lines dependent only on minimal outside investments.

(This article was first posted on CultureChange.org)