VZCZCXYZ0002
RR RUEHWEB

DE RUEHBU #1058/01 2141204
ZNY CCCCC ZZH
R 011204Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1675
INFO RUCNMER/MERCOSUR COLLECTIVE

C O N F I D E N T I A L BUENOS AIRES 001058 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/02/2018 
TAGS: PREL EAGR EAIR AR
SUBJECT: ARGENTINA: SALTA GOVERNOR OFFERS CONSTRUCTIVE 
CRITICISM OF GOA 
 
REF: A. BUENOS AIRES 1009 
     ¶B. BUENOS AIRES 994 
 
Classified By: Ambassador E. A. Wayne for reasons 1.5 (b & d) 
 
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SUMMARY 
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¶1. (C) In a private dinner in Argentina's northwestern 
province of Salta, Governor Juan Manuel Urtubey criticized 
the GoA and its head, President Cristina Fernandez de 
Kirchner (CFK), for the botched attempt to raise export taxes 
on agricultural goods, which led to a prolonged conflict 
between the GoA and the agricultural sector that was only 
recently resolved.  Affirming his continued support for and 
faith in CFK, Uturbey saw a silver lining in the final 
outcome, stating that it renewed the people's trust in 
Congress and that the designation of a new, "open-minded" 
Cabinet Chief (Ref A) could be a positive change.  He also 
expressed concern about the recent GoA decision to 
renationalize a flagship airline, noted that energy 
investment in his province was on the upswing, and discussed 
his possible participation in the August 17-19 Americas 
Competitiveness Forum in Atlanta, which he  subsequently 
decided to attend.  END SUMMARY. 
 
---------------------------- 
AFTERMATH OF THE FARM STRIKE 
---------------------------- 
 
¶2. (C) Ambassador met July 28 with Governor Juan Manuel 
Urtubey of Salta at the Governor's residence as part of a 
trip to Salta July 28-29 (Septel).  Urtubey, as in prior 
meetings (BA 948, 311), was quite candid, offering criticisms 
of the CFK administration, but also his support.  He noted 
that he has been a friend of CFK for many years, dating to 
when he was a Diputado and she a Senator in the Argentine 
Congress, and worked together on a bicameral committee.  He 
said that she spoke with him July 23 about the Senate vote 
which would have sanctioned the increase in agricultural 
export duties unilaterally imposed March 11 by the GoA.  She 
insisted that he talk freely to her, without the deference 
due the President.  He said he told her that the biggest 
problem in the process was not the message of raising taxes, 
but the way in which she delivered that message.  He told her 
she needed to be more moderate and less conflictive when 
dealing with opposing viewpoints, and that she must engage in 
dialogue with those favoring other options, as well as with 
Congress and governors. 
 
¶3.  (C) Urtubey cited to the Ambassador several positive 
aspects of the resolution of the conflict, including that 
"people can trust Congress again" (i.e., see it as 
independent, rather than a rubber stamp for the President), 
and that it "decompressed" a very difficult social situation. 
 He also says that an official at a large Argentine bank told 
him that, beginning the very next business day after the 
Senate vote, credit activity - which had been very slow 
during much of the conflict - picked up significantly.  He 
commented on the recent change of Cabinet Chief, stating that 
he was a friend both of outgoing Alberto Fernandez and 
incoming Sergio Massa, and expressed hope that the change 
could "refresh" the policy-making process.  He added that 
"Massa is more open-minded than most" in the administration. 
The question is whether he will have "the space to act." 
Urtubey said that with changes in style and some good policy 
decisions, he believed CFK could regain enough popularity to 
govern effectively through her term.  "This is a chance for a 
new start."  Interestingly, CFK's July 29 speech in Salta was 
delivered in a very positive style and got positive reviews 
from otherwise very critical business and finance figures 
present.  At present, tourism and business are being stymied 
by dependence on Aerolineas Argentinas. 
 
--------------------------------------------- ----- 
SALTA BANKING ON NEW CIVAIR AND ENERGY INVESTMENTS 
--------------------------------------------- ----- 
 
¶4. (C) Urtubey was also critical of the GoA decision to 
renationalize Aerolineas Argentinas (Ref B), expressing his 
concern that the costs were too high: "$900 million in debt, 
plus operating costs."  He stated that governors of several 
northern provinces, including Salta, were working to 
establish a new regional airline, which would cover many 
areas currently served only by Aerolineas Argentinas.  He 
said that they would be able to receive good financing terms 
for new aircraft from Brazil's export bank. 
 
¶5. (SBU) Turning to energy issues, Urtubey expressed his 
pleasure over the new thermo-electric generator which was to 
 
be activated the next day (more details Septel), and also 
noted that there was significant new gas exploration going on 
in Salta at present.  He stated that some of the exploration 
was to tap reserves as deep as six kilometers underground, 
and thought that Salta could end up doubling its proven gas 
reserves, which are currently 20% of Argentina's total.  He 
attributed the new exploration to the GoA's "Energy Plus" 
program that allows incremental generating capacity to charge 
private industrial users rates closer to market norms.  He 
said he believes that the current conflict in Bolivia is 
encouraging energy investment in Salta, noting that many 
energy companies are operating on both sides of the border. 
Since the facilities near the Bolivian border are essentially 
drawing from the same underground gas reserves, he said that 
companies were deciding to increase production on the side of 
the border that currently had the most favorable conditions, 
which right now is Argentina. 
 
¶6. (SBU) In response to the Ambassador, Urtubey confirmed 
that he had received an invitation to attend the Americas 
Competitiveness Forum in Atlanta, but had not confirmed his 
attendance.  He said it would depend on official activities 
related to San Martin Day, an important Argentine holiday on 
August 18 - the middle of the three-day conference. 
Ambassador explained many of the reasons Urtubey should 
participate in Atlanta.  (Post subsequently learned that he 
has decided to attend.  We will work with his office to 
coordinate his travel and participation in related events.) 
Ambassador also raised the possibility of Salta developing a 
"sister-state" relationship a counterpart in the United 
States, citing examples of other Argentine provinces which 
had done so, and offering to facilitate communications if the 
governor was interested in a particular state. 
 
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COMMENT 
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¶7. (C) As in prior conversations with the Ambassador, 
Governor Urtubey was quite frank, and displayed his support 
for market-based economic policies and fully functioning 
democratic institutions in Argentina.  He clearly sees 
himself as a critical ally of the current administration and 
a friend of the President whose barbs are meant to help CFK, 
not to undermine her.  He could help the government in 
another important way -- his positive stance towards energy 
investment in his province could help Argentina meet its 
energy needs, removing an important stumbling block from the 
GoA's path. 
WAYNE