Wednesday 22 February 2012

The Falklands: free market fun

From today's CityAM Forum:

... the governments of the United Kingdom and Argentina would agree that those Falklanders who were qualified to vote would be allowed to do so in a referendum. The referendum would allow the settlers – who are English-speaking and English by custom, institutions and loyalties – to vote on whether they prefer the status quo, or whether they would agree ("yes") to an Argentine takeover...

The referendum would be designed so that Argentina could offer a cash incentive. Before the referendum, Argentina would deposit an amount (let’s say $500,000) in escrow in Swiss bank accounts for every man, woman and child who had proven their Falklands residence prior to the referendum.

If the referendum went in Argentina’s favour... then the funds in escrow would be transferred and Argentina’s unambiguous sovereignty over the Falklands would be established. Argentina’s cost, in this hypothetical, would be about $1.6bn.


Also relevant is that the UK spends on average about £100 million a year maintaining a military presence on the Falkland Islands.

Unfortunately, we don't know whether or how much oil is down there or what it's worth, this is important as well. If it is worth a huge amount like £20 billion, then the UK government would offer a larger counter-bribe to persuade the islanders to vote "no".

8 comments:

Antisthenes said...

If there is oil why should the UK offer a counter bribe? It all belongs to the Falkland Islanders anyway. It is also an incentive for not voting to become Argentinian as the Argentinians will undoubtedly nick the lot.

Bayard said...

Oh to be an islander, now that bung time's here!

Mark Wadsworth said...

Anti, the oil belongs to whoever has the strongest Navy. Do the islanders have their own Navy?

B, Argentine hasn't actually made this offer yet, but as a thought experiment, what if Argentine bought up all the farms and houses? I'm sure they could get them all for £1 billion or so.

Bayard said...

Another thought experiment: how about the British Gov't offering to make Argentina a down payment of the netpresent value of all the future military spending on the Falklands in return for Argentina giving up all claim to the oil, sorry, Falkland Islands, then mothballing the military base on the islands.

Mark Wadsworth said...

B, nope, because we can't trust them.

Physiocrat said...

The idea sounds good in principle but $500,000 will buy a 3-bed Victorian terrace house in the seedier parts of Catford. Is that enough to tempt? Just a thought.

Mark Wadsworth said...

P, he said $500,000 per person, so a family of four would certainly have enough to buy a nice farm somewhere in Wales or Scotland.

neil craig said...

It is sensible and would work which is the problem with it. Had Baltieri offered this at the time the British govenment would have grabbed it with both hands. However had it ben done he would have been criticised by Argentine nationalists for being duped in very much the same way the author of "Seward's folly" - buying Alaska from the Russians for I think about $5 million - was.

The purpose of such wars, including Iraq, Kosovo and Afghanistan, is to get national feelings stirred up behind the tinpot politicians/dictators du jour. None of these countries are worth the bones of a British or American grenadier to the occupying power (though Kosovo is apparently worth a few kidneys, livers & hearts to our hospitals). None of the wars are intended to be anything but circuses and hobgoblins & obviously not one of the politicians starting them is in the slightest degree concerned about human life or rights or the scum wouldn't start them.