Argentina’s "Falklands debt" goes to the heart of our unethical foreign policy

The government should remember our shameful role in arming the junta.

The anniversary of war should be a time for learning the lessons of history - particularly when the injustice of a war continues to this day. Some documents exposed by Jubilee Debt Campaign this week expose a cynical approach to British foreign policy which should shock both British and Argentine citizens.

Argentina’s outstanding debt to the UK is £45 million. This week we have uncovered how much of this debt was run-up. In the years leading up to the Falklands War the British government was flogging one of the most unpleasant dictatorships in the world British weapons. 

A military coup in 1976 brought a wave of terror to Argentina. The ‘dirty war’ which the coup ushered in was a period of state terrorism in which as many as 30,000 people were killed or ‘disappeared’. Political parties and trade unions were banned, whilst religious groups had to apply for approval from the state.

The British government at the time was well aware of the nature of the regime in Argentina. In a document from Foreign Secretary David Owen to the Ministry of Defence in 1979, Owen describes the junta as a “regime whose human rights record is worse than Chile, and which could come close to a confrontation with us over the Falklands.” Pinochet’s Chile faced sanctions at the time, as a result of a policy made by the then government at the previous election. But Argentina faced no such restrictions. 

Owen understood the problems with selling weapons to Argentina, but concluded that “it is not possible to achieve complete consistency in our approach to this problem and that to attempt to do so would impose unreasonable constraints upon us.” As a result Argentina was sold two Type 42 Destroyers, two Lynx helicopters and twenty-two Sea Dart missiles.

These weapons sales - and likely a variety of other military equipment sold - were backed by an effective loan from a British government department called the Export Credits Guarantee Department. Indeed, such a good client was the Argentine junta, that in October 1979 the British raised the amount of loans it could back to Argentina from £100 million to £500 million to “provide room ... for the potential arms contracts.”

Both the destroyers and Lynx helicopters were used in the invasion of the Falklands - one of the Lynx’s was the first Argentine aircraft to land on the Falklands after the invasion. Indeed when the Falklands War was underway, Argentina should still have been paying the British Government for weapons being used against British soldiers.

These issues were aired - including in parliament at the time. What’s worrying is that the replies received are exactly the same replies received by arms campaigners today: when Lord Averbury asked whether it was “unwise to sell military weapons of any kind while the Falklands’ problem remains unresolved?” he was told “the government takes into account the use to which the equipment might be put”.

After defeat in the Falklands Argentina’s military junta was kicked out of power in the 1983 elections. Through the 1980s the economy suffered from the huge foreign debt the government inherited, which led to stagnation and increases in unemployment and poverty. Many argued it was a classic case of ‘odious debt’ and the new government should simply refuse to pay the sorts of debts owed to the UK. Indeed a famous court case in 2000 found that loans to Argentina under the dictatorship were part of "a damaging economic policy that forced [Argentina] on its knees through various methods ... and which tended to benefit and support private companies - national and foreign - to the detriment of society".

In order to keep paying this odious debt, Argentina's governments accumulated ever more debt. New loans repay old debts. By the 1990s, courtesy of advice and bail-out packages from the International Monetary Fund the economy entered a crisis and - after five governments in two weeks over Christmas 2001 - defaulted. The improvement both in the economy and Argentina’s democratic model improved significantly - no thanks to the so-called international community.

What should worry us today is that David Owen was not alone at the time - or indeed since - in placing the interests of the arms industry ahead of being a good global citizen. Owen, like many others after him, expressed ‘reservations’ about some of the arms sales, but in the end narrowly perceived economic and strategic interests won out.

The UK has spent years arming dictators and the debts ‘owed’ to this country can be linked back with some of the worst regimes of the last 40 years - General Suharto of Indonesia, Hosni Mubarak in Egypt, Saddam Hussein in Iraq, not to mention the royal family of Saudi Arabia. At the centre of these deals was the Export Credits Guarantee Department, now rebranded as UK Export Finance and under the stewardship of Vince Cable’s Department of Business.

In opposition, Cable regularly railed against the sorts of deals done with the Argentine junta, and his party promised in power to audit such debts and cancel those deemed reckless. It’s surely difficult to imagine a more reckless loan that one which supported arms sales to Argentina in the late 1970s. The government should use the Falklands anniversary not to wave flags, but to remember our own shameful role in arming an atrocious regimes around the world and make some efforts at recompense - for the lives of British and Argentine soldiers lost. 

Nick Dearden is the director of Jubilee Debt Campaign

Relatives of victims wait to hear the sentences of 30 leaders of the last dictatorship. Photograph: Getty Images.
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Benn vs McDonnell: how Brexit has exposed the fight over Labour's party machine

In the wake of Brexit, should Labour MPs listen more closely to voters, or their own party members?

Two Labour MPs on primetime TV. Two prominent politicians ruling themselves out of a Labour leadership contest. But that was as far as the similarity went.

Hilary Benn was speaking hours after he resigned - or was sacked - from the Shadow Cabinet. He described Jeremy Corbyn as a "good and decent man" but not a leader.

Framing his overnight removal as a matter of conscience, Benn told the BBC's Andrew Marr: "I no longer have confidence in him [Corbyn] and I think the right thing to do would be for him to take that decision."

In Benn's view, diehard leftie pin ups do not go down well in the real world, or on the ballot papers of middle England. 

But while Benn may be drawing on a New Labour truism, this in turn rests on the assumption that voters matter more than the party members when it comes to winning elections.

That assumption was contested moments later by Shadow Chancellor John McDonnell.

Dismissive of the personal appeal of Shadow Cabinet ministers - "we can replace them" - McDonnell's message was that Labour under Corbyn had rejuvenated its electoral machine.

Pointing to success in by-elections and the London mayoral election, McDonnell warned would-be rebels: "Who is sovereign in our party? The people who are soverign are the party members. 

"I'm saying respect the party members. And in that way we can hold together and win the next election."

Indeed, nearly a year on from Corbyn's surprise election to the Labour leadership, it is worth remembering he captured nearly 60% of the 400,000 votes cast. Momentum, the grassroots organisation formed in the wake of his success, now has more than 50 branches around the country.

Come the next election, it will be these grassroots members who will knock on doors, hand out leaflets and perhaps even threaten to deselect MPs.

The question for wavering Labour MPs will be whether what they trust more - their own connection with voters, or this potentially unbiddable party machine.