G20 Membership Reform

Henry Smith Excerpts

Friday 13th September 2013 Commons Chamber

[Henry Smith (Crawley) (Con)]

Thank you very much, Madam Deputy Speaker, for this opportunity to debate the reform of the G20 membership. This is the last debate of the week, and the last before the conference recess.

Unlike the G8, which broadly consists of the world’s largest economies, the G20, which was proposed by former Canadian Prime Minister Paul Martin, is a forum for co-operation and consultation on matters of concern to the international financial system. It was formally inaugurated in 1999. It studies, reviews, and promotes high-level discussion of policy issues pertaining to the promotion of international financial stability, and seeks to address issues that go beyond the responsibilities of any one organisation.

In the debate this afternoon I want to focus on questioning Argentina’s status as a G20 member, on the basis that it has failed on all three of the organisation’s primary objectives—namely, restoring global financial growth, strengthening the international financial system, and reforming international financial institutions. With non-members, including countries such as Malaysia, Norway, Singapore and Switzerland, contributing far more to our global economic well-being, one has to question the benefit of Argentina’s presence in the G20.

When Argentina appears in British public discourse, it is normally in relation to one of the two Fs—football or the Falklands. The behaviour of President Cristina Kirchner’s regime towards the islanders is nothing short of disgraceful, and it is extremely encouraging to see the British Government supporting the islanders in the strongest possible terms. The Falklands, for obvious reasons, are top of our agenda when it comes to discussion of Argentina, but that issue should not blind us to other major problems affecting this country as a result of Kirchner’s belligerence.

Kirchner makes no secret of her refusal to play by the same rules as everyone else. Let me start with a few examples. Argentina has expropriated the property of European companies. It provides a safe haven for drug dealers bringing methamphetamine to Europe. It is developing a strategic relationship with Iran. It deliberately falsifies its economic statistics. It refuses to abide by international court judgments. It refuses to pay its debt to other nations and institutions, and even refuses to honour the most basic laws of contracts.

A major and increasing concern is that of drug trafficking. A recent research paper from the International Assessment and Strategy Centre found that Argentina currently imports 30 times more ephedrine than is needed for its legitimate pharmaceutical industry. Ephedrine is a key ingredient in the production of methamphetamine, commonly known as crystal meth, which is a brutal and destructively addictive drug that ruins many lives on the streets of Europe and north America. That is not all. Argentina is now estimated to supply 70 tonnes of cocaine to Europe, which represents a third of the entire usage by volume.

Equally worrying is Argentina’s growing friendship with Iran, a country that is a major strategic threat to the interests of the UK and of the west more widely. The Argentine Government’s blossoming relationship with Iran has been highlighted in the US Congress, and was evidenced recently when President Kirchner refused to allow a senior Argentine investigator to travel to Washington to testify before Congress on Iran’s role in the 1994 Buenos Aires bombing of the Argentine Israelite Mutual Association, presumably for fear of what the expert might reveal.

Argentina’s refusal to repay its debt obligations, even though it has billions of dollars in reserves, sets a terrible precedent for other nations, such as Greece, which might be tempted to follow that path of irresponsibility. Courts have previously ruled that the Argentine Government needed to pay all its creditors, which is exactly the kind of sound legal principle that we in the developed world should uphold and support, even if the Kirchner Administration have chosen not to do so.

On every conceivable level, Kirchner’s actions are endangering the interests of Great Britain. So what can we do? Following a public campaign, in which I was involved, the Secretary of State for International Development took the important step earlier this year of stating that the UK would vote against future loans to Argentina from international institutions such as the World Bank and the Inter-American Development Bank. President Obama’s Administration is also voting against new loans. No more should Kirchner’s Government be allowed to threaten and denounce the international community on one day, then effectively cash our cheques on the next.

There is more we need to do: other European nations must be encouraged to join the UK and the US. It is simply unacceptable for a country that is a member of the G20—one of the most important and prestigious international bodies—to behave in this manner. I believe that Argentina’s membership of the G20 should be revoked. The country has been named and shamed by Transparency International as one of the worst in Latin America—even outstripping Venezuela—for corruption, while the International Monetary Fund has starkly stated that Argentina’s Government are lying about their economy and cannot be trusted. We cannot, and should not, allow Cristina Kirchner to be rewarded with a welcome at the world’s top table.

Argentina is an international outlier. No other country, including those in Europe, is behaving so irresponsibly in relation to its debts. No other country is in receipt of an IMF censure for falsifying inflation figures. We should stand up for the rule of law, sanctity of contract and respect for international legal and financial obligations. We should not stand with those who refuse to abide by court judgments or who steal private property. We should certainly not stand with those who ally themselves with drug traffickers and Iranian extremist groups.

We stood firm on the Falkland Islands, and we now have a strong stance on international loans. It is time to take a tough position on Argentina’s membership of the G20, too. I believe that this issue is becoming ever more pertinent following the meeting of the group in St Petersburg, Russia just last week.