Argentinian President Cristina Fernández de Kirchner is hosting the leaders of both Russia and China later this month. According to the Financial Times, she’s eager to make a big splash:
Argentina hopes for more than just political backing for its battle against so-called holdouts when Russia’s Vladimir Putin arrives on Saturday before a Brics summit of emerging market economies—Brazil, Russia, India, China and South Africa—in Brazil next week, with China’s Xi Jinping following a week later.Analysts say the gigantic Vaca Muerta shale formation in remote Patagonia is the motive behind both Chinese and Russian interest in Argentina, while Buenos Aires desperately needs foreign investment to develop what are the world’s second biggest shale gas reserves and fourth largest shale oil reserves.
The overarching background for all these maneuvers is Argentina’s current debt situation. It is trying to reenter the global debt market, even while risking default due to a pair of U.S. Supreme Court rulings. The “political backing” Argentina is looking for could range from simple salves for its wounded pride all the way to an attempt to work around the U.S. courts and economic system and pay off only its restructured debt holders.Above all, the country is looking for investment. Topics that are up for discussion range from Chinese investment in hydroelectric power to renminbi exchanges to developing the Vaca Muerta shale deposits.What do China and Russia hope for in return? As revisionist powers, both have been eager to undermine U.S. dominance and build their own economic portfolios. Recently, Latin America seems to have caught their interest. In addition to its investments in Argentina, for instance, China is attempting to build a canal through Nicaragua that would rival Panama’s.For Putin’s part, this trip comes as part of a broader Latin American power play. On his way to Argentina, he visited Cuba and forgave 90 percent of the country’s $35 billion debt to Russia. Afterward, he will head to Brazil, where he will make a play for that country’s support, as well as attend the BRICS Leaders’ Summit, and he will reportedly meet with German Chancellor Angela Merkel while watching the World Cup final. Facing sanctions and international opprobrium for his interference in Ukraine, Putin is in the market for friends—and he thinks he sees some likely candidates.As for Argentina, we’ll have to wait and see. Kirchner may prove as adept as her country’s soccer team on the international stage—but previous Argentinian attempts to opt out of the American-backed international system have backfired severely.