The islands of black gold

Nobody dreamed in the 1970s that a few years later Britain would be waging war over the Falklands. N

One calm, blue April morning nearly 28 years ago, I switched on my television to watch something I never expected to see in my lifetime: the British fleet putting out to sea to wage war. A half-forgotten colony on the other side of the world had been invaded, its 1,800 inhabitants - they were not then full British citizens - crushed by a foreign junta. National pride and honour had to be restored. We were back in the age of Palmerston.

Or at least in the age of Churchill. Over the ensuing weeks, as the spring days lengthened and we moved from phoney war (as the fleet sailed, everybody expected a negotiated settlement) to real shooting, the nation anxiously awaited news. Though many gathered round the TV, it might as well have been the radio as it was in the 1940s, because only sparse and belated footage got back to London. Ships sank, men died (British losses in Afghanistan exceeded those in the Falklands only last month), land battles were won and lost. This was a proper war between proper military forces: no insurgents, no guerrillas, no talk of biological or nuclear weapons, no bombing of civilians. Yet, as in 1940, we stood alone, fighting without allies and against such odds that the US navy had assessed retaking the islands as "a military impossibility".

There was no significant dissent. Labour, under the leadership of that old CND stalwart, Michael Foot, was almost as bellicose as Margaret Thatcher's ruling Tories. The Falklanders were wholly of British descent and wished to remain under British rule, and so protests from even the most pacifist and anti-colonialist Britons were muted. The enemy was a fascist regime; it had invaded without provocation; Argentina was smaller in population and poorer than us, but not vastly so. Nobody mentioned vulgarities such as oil. After Suez in the 1950s, the retreat from empire in the 1960s and the economic humiliations of the 1970s, it was a war for national self-respect.

For Thatcher, the Falklands worked so perfectly that some suspected she had planned it from the start, encouraging Argentina to believe Britain wouldn't oppose an invasion. The war was over in seven weeks (about right for the modern attention span) and ended with the Argentinians' surrender in time for the World Cup, then beginning in Spain. Later disclosures that our forces were days away from running out of supplies only added to victors' glory.

As the task force sailed in April, the government's approval rating in the polls had been below 30 per cent for 18 months. After victory in June, it stayed above 40 per cent almost continuously for two years. To this day, therefore, the Falklands retains an emotional charge. No government, particularly one approaching an election, would now dare discuss a transfer of sovereignty with Argentina. Equally, no Argentinian government, with economic humiliations fresh in its people's minds, too, would dare renounce its claim to the Malvinas. Even if the matter went to the International Court of Justice in The Hague, it cannot be certain that either side would accede to an adverse decision. So when companies, under British government licence, begin drilling for oil in Falklands waters, alarm bells ring.

Though the quantity and quality of oil, and the feasibility of extracting it, are yet to be determined, the belief that rich deposits - perhaps as many as 60 billion barrels - lie beneath Falklands waters is not new. Shell drilled in 1998 and reported the probable existence of both oil and gas. It and other big companies lost interest only because the oil price - a quarter of what it is now - was too low to make commercial exploitation profitable.

Flag planting

As early as 1973, US News and World Report speculated about "another Kuwait". At that time, Britain spurned the oil companies' inquiries for fear of provoking Argentina. Oil, the British thought, could eventually be a lubricant, dissolving the sovereignty dispute into a joint agreement to exploit the undersea riches. Though the Falklanders might have protested, such a deal would have caused little stir in London. Both the British and Argentinian governments, however, made catastrophic miscalculations, with the result that sovereignty became as sensitive an issue in London as it was in Buenos Aires. Could the politicians miscalculate again?

Sovereignty over the Falklands has been disputed for more than two centuries. Ironically, neither Britain nor Spain (the colonial ruler
of Argentina before independence) can claim to have discovered the islands or even to have settled them first. The first honour - though there is evidence of earlier sightings - goes to the Dutch (1600), the second to the French.

The name Falklands derives from 1690, when a British commander named the waters between the two main islands after the then commissioner of the Admiralty. But the first permanent settlement, in East Falkland in 1764, was by Bretons from Saint-Malo, and it was after them that the islands were called Îles Malouines, translated into Spanish as Islas Malvinas. Only later did the British settle at Port Egmont on Saunders Island. Spain bought the French settlement in 1766, placing it under the colonial administration in Buenos Aires, which then, with as many as 1,600 marines, evicted the British from Port Egmont, provoking the first Falklands crisis and the first threat of war.

France disappointed Spain's hopes of support and the British returned to Port Egmont un­opposed (a rare triumph for Lord North, the prime minister who later lost the American colonies), but with sovereignty still unsettled. Subsequently, neither country maintained its settlement. The British, preoccupied by the American rebellion, left in 1776; the Spanish, preoccupied by Napoleon, went in 1811. Each left a plaque reasserting sovereignty.

The islands lay abandoned to itinerant whalers and sealers until a newly independent Argen­tina appointed a governor in 1828, despite British protests. Five years later, a British force reclaimed them. Formal colonisation and the appointment of a British governor followed in 1840. For more than a century, despite nearby naval battles during two world wars, the islands stayed largely undisturbed, mainly as an exporter of sheep's wool under the Falkland Islands Company. In the 1960s, however, Argentina revived its claim to sovereignty, encouraged by the anti-colonial climate and prospects for economic development.

Unlike other colonies over which Britain was then relinquishing power, the Falklands had no indigenous population. But the difficulties of defending so distant a possession and the dubious benefits of doing so were recognised. Throughout the 1970s, Britain ran down its commitments to the Falklands and made only token protests when Argentina issued oil exploration licences. London, it seemed, was willing quietly to relinquish sovereignty, ideally with some leaseback arrangement whereby the islanders would remain, at least temporarily, under British administration.
In his 1988 study of the Falklands dispute, Lowell Gustafson, a political scientist at Villanova University, Pennsylvania, concluded: "Had Argentina continued to license oil exploration . . . it is difficult to imagine how Britain could have stopped it. A use of force . . . against foreign corporations . . . would have been most unlikely." US support, he added, would have been equally unlikely; only Argentina's first use of force changed the equation.
Now the situation is reversed. Britain is pressing ahead with oil exploration, threatening further confirmation of its sovereignty. Is there anything Argentina can do?

Diplomatic rumbles

It is hard to find anybody who thinks another war is likely. But nobody dreamed in, say, 1970, that Britain a dozen years later would be at war in the South Atlantic. Though oil was not a proximate cause of war, the unprecedented price spike of the 1970s and western anxiety to find deposits outside the control of the Arab-dominated Opec cartel created the conditions that led to conflict. Now the growing instability of the Middle East plus fears that many existing fields are close to exhaustion has created renewed interest in alternatives.

Nor are oil and gas the only scarce resources at stake. The present Argentinian campaign to rally international support for its sovereignty claims began in 2006 when Britain granted fishing concessions (which had previously been renewed annually) for 25 years. Though Britain might struggle to repel an Argentinian assault on the islands or to send a second task force to end an occupation, the Falklands are sufficiently well fortified to inflict significant casualties on an invader. These would probably be unacceptable to a modern democratic regime. But the real threat to British control is diplomatic, not military. Here, Argentina holds the aces and it will not throw away its hand as it did in 1982.

Even in that war, the Americans, as John Nott, then the defence secretary, later wrote, were "very, very far from being on our side". Only after Argentina turned down US mediation attempts did President Reagan back Britain by providing military supplies and prohibiting arms sales to the enemy. Now the diplomatic climate is transformed.

The proliferation of ultra left, instinctively anti-US regimes, led by President Hugo Chávez of Venezuela, leaves Washington uneasy about its position in Latin America. Brazil, which has expressed support for Argentinian claims on the Falklands, is a growing economic power. Cristina and Néstor Kirchner (the former succeeded her husband as president in 2007), as moderate left-wingers, are natural regional allies for a Democratic administration. No wonder Hillary Clinton, the US secretary of state, made an unscheduled visit to Buenos Aires this month, apparently without consulting London, to propose that Britain and Argentina talk in "a peaceful and productive way". She pointedly referred to the islands as the Islas Malvinas.

Grappling with a £178bn Budget deficit and an economy struggling out of deep recession, British ministers may dream of oil coming to the rescue once more, as North Sea oil did after the 1970s. The truth, however, is that any Falklands deposits will have to stay under the sea unless there is a deal with Argentina, including a resolution of the 250-year-old sovereignty dispute. Whether any government can make that deal, without compromising those precious memories of national sacrifice and glory, is another matter.

Peter Wilby, editor of the New Statesman from 1998-2005, writes a weekly NS column