A Conversation With Susana Malcorra

Friday, September 16, 2016
Marcos Brindicci/Reuters
Susana Malcorra

Minister of Foreign Relations and Worship, Argentine Republic

Carla A. Hills

Chairman and Chief Executive Officer, Hills & Company, International Consultants

Susana Malcorra, Argentine foreign minister and a candidate for UN Secretary-General, joins Carla A. Hills, the chairman and chief executive officer of Hills & Company, to discuss her outlook on the future of Argentina. She discusses Argentina’s development under President Mauricio Macri’s leadership, issues considering Mercosur, and the country’s relationship with the rest of the world.

HILLS: Well, welcome to today’s Council on Foreign Relations meeting. We are truly honored to have the Honorable Susana Malcorra here with us today, the minister of foreign affairs and worship. She was appointed by President Macri in December of 2015, and she brings extraordinary experience to the ministry in management, economics, technology, and international relations.

You all have a copy of her impressive resume, and we have only one precious hour, so I’m going to limit my introduction most undiplomatically to just a few points that I would like to make about her magnificent achievements. She’s been a systems engineer for IBM. She was the executive officer of Telecom Argentina, then the third-largest Argentine company; chief operating office(r) of the United Nations Food Programme; undersecretary-general for the newly created U.N. department dealing with providing field and financial support for our peacekeeping missions; and, last but not least, chief of staff to U.N. Secretary Ban Ki-moon.

The minister’s remarks and our conversation following are on the record. And, with no more words, I’m going to invite Minister Malcorra to the podium. Madam Minister. (Applause.)

MALCORRA: Thank you so much, Ambassador Hills. It’s a real pleasure to be here, to be hosted in such an important organization related to all matters of common interests in international affairs.

I see good friends sitting around the table. It’s good to be among friends.

I will take a little bit of time to tell you where we are in Argentina, and then, as the ambassador said, we’ll be open to questions and we can speak about anything you want us to talk about. But I think it’s my duty to start from home and to describe where home is these days.

As you know, President Macri took office last December. It has been nine long months of hard work trying to have a different approach to Argentina and Argentina in the world. It is our view—it is the view of the president that, in this day and age, the only way for us to really get to the point where we need to be from a development, from a consolidation-of-institutions perspective, from the perspective of being a mature democracy, a mature country, is to do that within a very integrated view into the world.

President Macri came with a very clear three objectives set for our government.

The first of all is elimination of poverty. It is hard to say, it’s heartbreaking in a way, but Argentina has a poverty level of around 30 percent, even a little bit more than 30 percent. Such a rich country, such a country with so many resources of all sort, it’s hard to understand how is it that we are where we are in this field. So the first objective is to eliminate poverty. And this is much in line with the view that the world has on sustainable development, on climate change, on doing it in a manner that will be sustainable long term. So his first objective, which seems so geared towards the internal perspective of Argentina, is the marching orders that I have as the foreign minister of Argentina. Clearly, our job is to bring Argentina back to the world, but it is to do it so that we can generate business opportunities, investment opportunities, trade opportunities in a way that allows us to create jobs that are sustainable in the long term—not jobs that depend on a particular subsidy, not jobs that feel like falling from skies, but jobs that are real, that are quality jobs in the long term. So that’s the first objective.

The second objective that President Macri described for ourselves and set for ourselves is a fight against narcotraffic. This is something that many people do not fully know, but Argentina has evolved to be a country of passage of narcotics of significance. And in being a transit country, of course, once you pass through a place, something always is left behind. And that something that has been left behind for some time now has created a very, very sad situation in our society. Not only, of course, the use of drugs has increased, but out of that we have now a situation of drug trafficking internally, which is not of the sort of the big cartels that we see somewhere in the world, but that has created a tension and has created problems of security that are really serious. And again, here, as in the Foreign Ministry, I’m working very closely with colleagues in the different ministries to, first, get as much lessons learned, information, capabilities coming from countries such as the U.S., but also others that have done this throughout time, and work together with the neighbors—because this is clearly a question that affects the region—in order to attack this horrible, horrible situation that we are facing. So that’s the second objective.

The third objective that the president has set for us is the—what in the U.S probably you will say rule of law, but in our terms we call the coming together of the Argentinians under democratic institutions. And the notion of coming together, the notion of being able to work with each other no matter what your view is, where you come from, what your thinking is, and being able to work out your differences because you have institutions that are solid, that is absolutely critical for a country that has had quite a few rounds of changes of profound impact without having a lasting view of institutions, particularly institutions that have strong democratic roots.

So this is what we are doing. It’s very simple. It’s very complex. The president promised to deliver many things, and I will say that the first not even nine month, the first six month of Argentina, the first six month of this administration prove that what he promise is what he did. And we have reopened, particularly in economic terms to the world. We have eliminated all the hurdles that existed to do business with Argentina. The president has taken many bold decisions in this regard, and one of the ones that clearly has had a huge impact if the agreement with the holdouts that was there for many, many years and costed our country a lot in terms of unfulfilled opportunities.

We are now working on the hardest part, which is to translate all these policy decisions, all these framework decisions, into things that impact the lives of each one of the Argentinians every day. You know, going from macro to micro is always difficult. That’s exactly where we are. We have launched a very, very ambitious infrastructure plan because we have a design of a productive Argentina that requires to be competitive, and one of the issues we have to be competitive is to update our infrastructure, be that in terms of roads, in terms of railroads, in terms of ports, in terms of energy. You know, Argentina, having been a net exporter of energy for a long time, is now a net importer. So we have to reshuffle and invest in these basic infrastructure needs, not only to make Argentina competitive, but also to have a better integration within Mercosur, within the south of the continent, and to make sure that we can look at Atlantic and Pacific in a manner that is absolutely connected and interconnected.

So we are working on that. We are working on the question of bringing interest of private-sector investment. We just had earlier in this week an investment and—a forum on business and investment, had 1,500 very, very senior people from companies coming to see what is it that we can offer, both on initiatives that the government is leading like the one I just described on infrastructure, but also to see sector by sector where are the opportunity.

And, of course, agribusiness is a key sector for us. As you know, that’s one of the sectors where we are competitive. We produce today food for 400 million people, 10 times our population. We have a plan to become a producer of 800 million people in five years’ time, and that’s part of the need to build and rebuild the infrastructure to be able to carry that through. And also, we are very, very much dedicated to go from being the granary of the world to being the supermarket of the world, so to bring up the value chain and to make sure that we add value in Argentina and we are part of the solution to one of the biggest risks the world faces, which is the food security risk. That is true in many parts of the world, and I think Argentina can represent an opportunity in this regard.

So we are working sector by sector trying to bring attention to our country. We are working hard, not only in the most basic agribusiness as I just described, but also on the other extreme of the ladder, which is technology, which is the natural tendency to be creative that the Argentinians have that have proven so good in the e-commerce, in the IT arena, in the technology arena at large, in the media. So we are trying to decide which are the sectors where we can have a competitive advantage, and look for partners that come from all over the world to join efforts with us and invest, and create again job opportunities.

This is what we are doing. I’m not going to bore you much more with what is it that we are trying to do vis-à-vis Argentina and its own challenges. We are doing this, as I said, very, very cognizant that we are immersed in a region that has its own challenges. And it’s very, very important for us to work well-connected to our neighbors, Mercosur being our first priority. And there we are trying to make sure that we take Mercosur to the next level of closeness in working as a market.

We have started the conversations with the European Union. Exchange of offers on free trade have started. Now, these first offers were mutually disappointing, I have to say. But, as is always the case, we have to work from now on and develop those offers to something that is mutually satisfactory.

We are also working at the larger scheme of South America and Latin America because it’s, again, very, very natural that you’re working in concentric circles to see and to integrate yourself in the world. But we are also investing very heavily in our relationship with North America—with the U.S., with Canada, with Mexico. We’re also working hard in renewing our commitments with the European Union. We have a partnership relationship with China that was—with China that was started by the prior government, and we have now reoriented based on the priorities of this new administration. We are looking into business in the rest of the world, both in Asia, in the Middle East, and in Africa, and Africa as an opportunity—not only as a market opportunity, because Africa is so much in need of some of the things that we produce, but also as a cooperation opportunity to try and help develop areas where we have a competitive advantage that can be a south-south cooperation opportunity.

So we have a very, very broad agenda. I will say that we have almost no stone left unturned. That means that we have many fronts, and we are trying to do our very best to work in a manner that comes from big concept, big ideas landed into things that make a difference for our people.

And without elaborating much more, because I don’t want to take more time, I will be ready to engage with Carla and with you all in a conversation. Thank you very much. (Applause.)

HILLS: Well, that was spectacular, and I can’t tell you how pleased we are to have you with us. Thank you.

I will ask the minister a couple of questions, and then I’ll be turning it over to you. So think about what you can ask, with very few words, in the short time that we have.

But you mentioned Mercosur. And many observers believe that its current setup is an obstacle for vibrant Argentine trade. And I wonder if you agree—well, let me just ask you, what reforms, if any, do you see that Mercosur needs to reinvigorate the integration? And some have suggested that if the members had a free trade agreement instead of a customs union, they would be much more flexible and engender much more growth. What are your views on this?

MALCORRA: Well, it is clear that Mercosur is short of delivering what the initial expectations were, particularly both—from both presidents, from Brazil and Argentina. I mean, it’s also true that, throughout time in the recent history, Brazil has hidden behind Argentina and Argentina has hidden behind Brazil every now and then. We took turns.

So I think we are facing a huge opportunity now because both countries agree that we need to take a deep look and really go into serious, serious thinking about what is needed. We don’t have a particular formula for the solution. What we think is, first, we have to be truthful to what we have agreed, which we haven’t been; that we need to eliminate all barriers among ourselves, and there are many that are still there; and eventually, take deeper looks whether there is a better model that we could go ahead and take.

I hate—and I’ll be very clear—when we put excuses to ourselves that we have to invent something new because what is working—what is supposed to be working is not working, because while we invent something new, we are creating new excuses not to do things. So our view now is let’s get into business, let’s do what we’re supposed to do. And in the meantime, let’s talk about anything that we feel should be of help. And we are ready because the president, as I said, is a very open-minded president, and is ready to take on any issues.

HILLS: Well, we wish you well on that endeavor. Let me ask you another question. Argentina has played a role in preventing Venezuela from assuming the presidency of Mercosur. And a deadline has been set of December 1 for Argentina to comply with the membership requirements. And tell me, if the political situation continues today as it has with respect to Venezuela, what do you foresee? Is Argentina prepared to vote for Venezuela being suspended, dropped from Mercosur?

MALCORRA: Well, first of all, I think we need to be very careful to separate the political situation of Venezuela from the issue of Mercosur. Mercosur is a common market. We have other environments, other organizations where we deal with the political issues. We have done a very, very strict review of compliance. And we have found that in the—when I say “we,” it’s the four founders, not only Argentina. The four founders of Mercosur, we have found that there are certain questions that are basic prerequisite of compliance that Venezuela has not yet adhered to.

So there were different views on how to deal with this. And we all agree, again, to give Venezuela extra time. Venezuela has the institutions to approve these. Most of these is the approval of treaties that should go through the legislation and should be endorsed. So we are hoping Venezuela will deliver on their commitment to be part of Mercosur. Should that not occur, I think we need to regroup and decide what are the next steps. But there is no intention that Venezuela will be dropped out, because we hope that Venezuela will go into the commitments that were made to being with.

HILLS: In your foreign policy responsibilities, let me ask you another question about the Venezuela. It’s currently hosting the 17th summit of the Non-Aligned Movement. There will be, I think, about 160 delegations that attend, including North Korea, Iran, Syria, and many others. The last summit was held in 2012. What do you think is going to come out of this meeting?

MALCORRA: Well, I have not been involved in the organization of the meeting. It’s clearly a group that, as the name itself indicates, tries to be a neutral or non-aligned to what was, at the time, the big powers in the bipolar world. The reality is that there is no bipolar world any longer. So it’s hard to be non-aligned when there is no full alignment of any sort. (Laughter.) But I think it’s a platform that brings together most of the countries from the south, and that allows to have conversations around issues that they define in their priorities. I don’t know what the themes are for this summit.

I am of the view that if people want to come together and have a conversation and have exchange, there is no reason why that shouldn’t happen. My sense, having been in a multilateral organization for some time, that it’s better for people to be sitting and talking than to be fighting. So in a way, I think it’s worth just looking at what happens, and wishing that out of that there will be a sense of belonging to this world, because we have a lot of common agendas that we need to be working on.

HILLS: And Argentina will participate?

MALCORRA: No, Argentina is not a member of the Non-Aligned Movement.


MALCORRA: We used to be. We are not any longer.

HILLS: Not any longer. All right. Let me ask you another foreign policy issue. For more than a century, Argentina and Great Britain have had a quarrel about the Falkland Islands. They even fought a war in 1982 over the issue. And this past Wednesday, just two days ago, the two governments issued a communique ending restrictions on a number of industries, enabling them to function on the islands, and agreeing to allow flights in and out of the islands, and planning—promising to discuss in the future shipping, fishing, and oil and gas drilling. How do you see these negotiations proceeding? And in what time frame? Give us something about—can we see the end of this hundred-year war?

MALCORRA: Well, it’s not a hundred-year war. It’s a hundred-year difference of opinion, serious difference of opinion, which had a war in the middle, unfortunately. (Laughter.) And what—first of all, we have said that we are ready to relate and communicate with the rest of the world, as long as the basic principles that we believe in are met. Clearly, the U.K. meets these conditions. And we have also said that in relating to the world, we believe in the principle of Pareto. You know, you should be aware that I’m an engineer. So I use sometimes engineering terms. So I believe in this 80/20 principle, where normally you have 80 percent of things with whomever you’re talking—a country, another person, another institution—you can agree on. And you work on that. And there’s 20 percent where either you don’t agree, or you agree to disagree, or you work to get to an agreement.

In the case of the U.K., it’s clear our—what our 20 is. It’s the Malvinas. We have a deep difference with the U.K. It’s something that Argentina has enshrined in its constitution, the right to have Malvinas as part of our territory. So this is something that that is deeply rooted in our society, in all of us. Having said that, we are working on the 80 percent. The U.K. just participated in this forum that I described, with quite a few members of the private sector, and the representation from the government.

On the Malvinas, we have a view that this may take long to be totally resolved. But there are things that can be done in the meantime without giving up our sovereign right to the Malvinas. This is in the communique that we signed. We talked about sovereignty there. So that’s the first thing that is there.

And in the meantime, we have agreed to work together on quite a few fronts—you know, easing some of the air links that are needed, and trying to see how we can find ways to jointly work in that area that is so important to Argentina as part of its own space. So that’s what we are going to do. None of this has a prescripted timeline. But it’s a good first step towards, again, sitting at the table and trying to find solutions.

HILLS: You mentioned in your remarks President Macri’s priorities. And in February, he came to the Council on Foreign Relations and laid out his foreign policy priorities. And one of them was to develop a more cooperative relationship with the United States. And so let me ask you, what two or three policy areas would your government like to pursue with Washington? And also, what would you like to see Washington do to facilitate a closer relationship between our two governments?

MALCORRA: Well, first of all, since the president was here back in February, many things have happened. President Obama visited Argentina, in what we consider was a very successful visit, and a very successful encounter between the two leaders and their teams. Secretary Kerry has visited also. We have had a much more detailed work. And many other leaders from the administration have come to follow through what we have initially committed.

First of all, we are now engaged in a high-level political dialogue. There is a direct communication between the two administrations at different levels. We are trying to sort out some of the hurdles that we on both sides have imposed each other on trade. And that—some things have come a long way. We are looking for opportunities to see that the decisions taken by Argentina, by the administration reflect, for example, on the credit rating of Argentina, which is something very important. This is not something that is solely in the hands of the administration, but we believe that the administration can send hints to the financial institutions that do have the responsibility for this. Of course, we are looking for more cooperation with the private sector. And again, the signals that the administration sends are important.

But we are also working more specifically in certain areas, we are cooperating on the second objective that I described, which is the fight against narcotraffic. There is a strong cooperation between the security institutions. We found that our security system was quite dismantled. So we are seeing support on capacity building, on equipment. So we are working on things in that regard. We are also working very closely and coordinating multilaterally—peacekeeping, climate change, things that are of importance to us, but also to the U.S. And we also have a few things where we may not agree—as with any one else—but we can all live with that.

HILLS: Well, we’re glad you’re in the position you are.

Let me turn to our members and remind you this is on the record, ask you to stand, give your name and your affiliation, and make your comment or question relatively short so that your colleagues can also participate.

Yes, at the far table. Yes.

Q: Thank you. Sonia Schott with Diario las Americas.

I would like to know how Argentina sees the role of the OAS, especially with all this democratic challenge in the region, especially in Venezuela. Thank you.

MALCORRA: Well, first of all, we value the role of the OAS. We feel OAS, as an institution, is one of the oldest institutions of this sort in the world—regional institution. OAS has some incredible, established institutions within OAS and the human rights aspects of OAS are significant. We believe that the Human Rights Council and all the associated elements of it are very important. The court—you know, we really value OAS.

Somebody asked us when we were just coming into the administration—there was this discussion about CELAC versus OAS. And we said it clear, that felt that both the institutions are different, have different purposes, and both of them should be retained. So we are very engaged in OAS. We think that it’s an opportunity for the whole continent to come together. Although, it’s true, within the continent, we have a lot of asymmetric relations, but the more to work together to try to find common views. So we are vested and invested in the OAS.

HILLS: Yes, at this front table here.

Q: I’m Allan Wendt, formerly with the Department of State. Sorry.

HILLS: I don’t think your mic was one.

Q: I’ll get it right eventually. Allen Wendt, formerly with the Department of State.

I understand that Argentina’s a candidate for membership in the OECD. Could you tell us where that stands, please?

MALCORRA: Well, we have written to OECD indicating our interest in becoming a member OECD. But we also said in our letter that we are interesting, as long as OECD is interested in us being a member. And this is not being picky. There is a reason for this. And there is a discussion within OECD whether the expansion should continue, or maybe the number of members that are in the OECD is enough. And being part of OECD has many added values. You know, I always like to say that complying with many of the thresholds that OECD establishes puts us in a straightjacket that is helpful to behave towards the future. You know, it’s sort of a long-term perspective.

But it’s also true that it’s a very heavy investment. So we are ready to go for it, as long as we have partners who are willing to come along with us. And we are trying to get the sense whether that’s the case. The president has spoken with most of the leaders of the OECD, saying we are ready to tango. Now, we will see whether the other side is ready. But we feel that it’s worth making that investment—with one caveat. We also need to be very careful that politically the speed of implementation is something that one needs to be very mindful of, because there are so many things on our plate that we need to stagger what is it that we do, and how fast we do it. And this is something that we have also shared with the members of OECD. And again, we are ready to tango.

HILLS: Question here.

Q: Thank you, Madam Minister. It’s very interesting to listen to your presentation about the objectives and priorities of the government and the growth agenda that is associated with it.

My question really is, is anything within that agenda that offers some idea about the restructuring of Argentina’s economy which is, pretty much, in a nutshell, resource based, into a modern economy that’s competitive? And in this context, do you have a model in mind of a country that you want to emulate? Is it the new region, countries like Brazil versus Chile, or looking farther afield in countries like Korea and Vietnam?

MALCORRA: Well, first of all, it is true that our country is a strong, natural resources-based economy. But it’s also true that our country is one of the richest countries in the world in natural resources. So I learned a long time ago that one needs to build on strength, and then move from there, because when you try to build on weaknesses, the work to get to where you want to get is much, much more challenging.

So what is it that we feel we must do? I said it in my introduction. We believe that we have to build on our competitive advantages and move up in the value chain as we do that. So clearly, clearly, agribusiness is at the heart. You know, the fact that the administration eliminated all the different hurdles that the agricultural sector had is now yielding, in this year, 20 percent more of output in wheat, soybean, and et cetera, et cetera, et cetera. So the speed at which that sector reacts to the right incentives is critical for us. We have now to make sure, as I said, that we move from being the granary to being the supermarket. So that’s an area of opportunity.

There is another area of opportunity that we have really missed throughout our history. And that is minerals. When you look at what minerals represent in the GDP of Chile, and you look at what it represents in our GDP, it’s almost nil in our GDP. And like President Macri says, for some reason God put all the minerals in the Andes to the west, not to the east, because that’s the only way to explain it. (Laughter.) So that mining is another area where we can do a lot.

But here, again, not only the raw mining exploitation, but building up in the value chain. You know, we have the largest reserves of lithium in Argentina. We have reserves of some of the minerals that are more critical in the advanced technology. And so we need not only to exploit the minerals but to, you know, build batteries in Argentina. So that’s another area where we are very, very much in the position of the upside being relatively simple and is part of what we are trying to do.

Then it’s clear also that Argentina has an opportunity in the softer side of business, because is, first, a well-educated, you know, population, especially young population, a population that is very creative, as I said earlier. You know, when you look at the startups in Latin America, four of the five largest startups of Latin America come from Argentina, I’m talking about the technology sector, even though there were no incentives in Argentina to help in doing so, so that’s another area. And becoming a service provider to world in certain areas is also important.

So do we have a single country that will be our mirror? We don’t. We are trying to look at best practices by sector. We are constructing a road plan for our production and productivity to increase. And we are trying to compare sector by sector and learn from the best ones. Korea could be on, you know, a government and the implications that it has. It’s clearly the case of Chile and minerals. But I think we have many things to learn from many.

HILLS: In the back table, the gentleman sitting with the computer.

Q: Thank you very much. I’m Luis Alonso with the AP.

And I would like to try two topics. If you could, please, Minister, give us an update on the plan for Argentina to receive 3,000 Syrian refugees, that we haven’t heard only just recently.

And I would like to also do a follow up on Venezuela. Is Argentina ready to say that the mediation done by the three former presidents hasn’t achieved any significant outcome and there is a need to try a different strategy?

And also—

HILLS: That’s three. (Laughter.)

Q: Well, but it’s on Venezuela and the OAS. Secretary-General Almagro invoked a charter in May when he called a special meeting. Since then, my question is, what should be the next step in this collective assessment on Venezuela? What should be the next step? It’s obvious there is a stagnation there. So anything you could share, I’d appreciate it.

MALCORRA: If I can ask you, can you remind me of the first one?

Q: Syria.

MALCORRA: The refugees. Well, the president is going to be making more specific announcements next week in the high-level week in New York in UNGA. But what I can say to you is that we have put together a plan to expand what Argentina had been doing in the past, because one needs to say, it’s not new that Argentina is receiving refugees, but what we want to do is to do it at a different pace and with a different force. So we are expanding the net of how to receive refugees in a manner that allows them to have the coverage when they arrive, that they are not left on their own.

This is based on a few principles. The first principle is that Argentina is a country of migrants and refugees. And many of us have grandparents or great-grandparents that came to Argentina either being migrants or being economic refugees or war refugees. So what we feel is that the question of Syria requires shouldering by everybody, by the world, and we are trying to, it’s a drop in the ocean, but we are trying to do it and do it in a responsible manner.

Meaning, we are trying to have this first tranche of 3,000, have it covered by the fact that there are two very large populations in Argentina of Syrian and Lebanese origin that can be of help to integrate these people, that we have five or six provinces where the governors are totally ready to welcome refugees, and trying to put together all of these in a manner that is well-sustained and allows us to feel that we bring people that can be productive as soon as they arrive.

You know, having a poverty level of 30 percent makes us very responsible vis-à-vis what is it that we do when we open ourselves. We just don’t have the possibility of affording as a government to bring people in and covering everything because we cannot do that with our own people. So we are trying to work with civil society, with private sector, and with some of these organizations to make sure that we get that net that allows them to insert themselves. So the details will be announced by the president next week, so if you allow me to leave it there.

Regarding Venezuela, first of all, we believe that dialogue, and I said it in a different context a few minutes ago, is the way to sort out issues. It’s clear that the Venezuelans have voted twice in very different ways, sending very different messages. The executive is there through a democratic process, through the results of elections, and were given the powers by their people.

It’s also clear that last December, the Venezuelans decided to give the total majority to the opposition in the legislative. So what our reading is, is that the Venezuelans have told their leadership come together and sort this out. And in that regard, we are absolutely convinced that the need for the dialogue is there.

You said that nothing has happened with the dialogue of the three presidents. I would not dare say be so absolute. Probably I could say that it has moved as far and as fast as one would like.

There is some news that is, in our view, very important. You may have seen that Monsignor Parolin has sent a letter offering the good offices of the Vatican to intervene. We have pushed for that for a long time. And we believe that if the Vatican joins forces here with the moral authority of Pope Francis in the world, but particularly in this region, there is an opportunity to sort things out and to help the parties find a solution and a way forward. So we still bet on that and we are trying to do our very best, hoping that that’s the way to go, particularly because other options, in our view, are really not good options.

Then on the OAS, it’s true that the secretary-general was able to present his view on the democratic clause in the case of OAS. This was done under our presidency of the council, you may recall that, and now it’s being discussed among member states.

What the secretary-general introduced is an analysis of all options of things that can be done and can be considered under the democratic clause umbrella. That is being discussed. In fact, there will be conversations in the next weeks among member states.

But you know, all of this is not something that happens overnight. When you have a multilateral engagement, it takes time and it needs digestion. So I think that the fact that this has been under consideration is very important because it’s part of the role of OAS.

HILLS: Yes, please?

Q: Thank you. Kellie Meiman with McLarty Associates.

I thought it was very interesting that early in his tenure President Macri went to Chile for the Pacific Alliance Summit. I was wondering if you might comment on the relationship between Argentina and the Pacific Alliance and also Mercosur. Thank you.

MALCORRA: Well, you know, President Macri did a few things that were interesting as signs to our region. Before becoming the president, he was still president-elect, we flew to Brazil and to Santiago on the very same day. And this has a lot of meaning for us.

It’s clear that Brazil is our largest partner. It’s clear that we cannot think about ourselves without thinking about Brazil. But it’s also clear that we believe, deeply believe, in a bi-oceanic perspective of ourselves and of the region. This notion of having an antegalic (ph) view of Atlantic versus Pacific is just plain wrong. If I were not here and I would not be taped, I would say plain stupid, but I cannot say that. (Laughter.) So it’s just wrong.

So our view is—and this was discussed between President Macri and President Rousseff at the time. So it’s not something new. People can say now, well, you know, you are starting something new. No, this was discussed then. And we agree that there is a combination of ALADI, Alliance of Pacific, and Mercosur that can become a virtuous circle. After that, we were invited to become observers. And we decided to accept that privilege. So we are now observers of the Pacific Alliance.

We think that in the end South America, Latin America, has to really strengthen its integration. I like to say that we measure integration through results. And when you look, for example, at the level of integration within UNASUR in the past 10 years, and you look at the direct foreign investment within the region, and trade within the region, it hasn’t yield much. So we need to talk business and we really need to get serious about integration, and put that in terms that go beyond labels, that really get to the heart of it.

HILLS: Michael.

Q: Thank you, Carla. And Michael Shifter of the Inter-American Dialogue. Thank you, Minister Malcorra.

You mentioned in your opening remarks that Argentina is reorienting its relationship with China in light of the current—the priorities of the current government. Can you—can you describe a little bit what that means, reorienting in what way?

MALCORRA: Well, it clearly—the prior administration signed an agreement with China of a strategic partnership. And we have decided that that’s something that we want to maintain. But we want to maintain in the terms that are aligned with what the government feels are the priorities. So we have had a very, very fruitful conversation—series of conversations. In fact, President Macri already met twice with President Xi Jinping. And we have somehow reprioritized. And let me just give you examples. There was an agreement around—a contract, more than agreement—signed around the power plants in the south. And we look into it, and we are redesigning that, and our Chinese counterpart has agreed to do it.

The Chinese have proposed a couple of options on power plants—nuclear power plants which we are now considering in light of our overall strategic plan on energy, and we are discussing with them. There were discussions around a plant—a base, not a plant—that was approved and was being developed, again, in the south, in Neuquén, regarding air monitoring, satellite monitoring, which had all kinds of questions regarding the use and application of that base. We sat with our Chinese partners and said, listen, we understand that this has only a civilian objective, a peaceful objective. But we would like make that clear. And we have now a signed—an agreement—an addendum to the agreement to make that clear and specific.

So what we have then is sat with the Chinese—who are serious players in the region, are serious players in the world—and have decided to make sure that our relationship is based on mutual trust, but also mutual interest.

HILLS: Yes, back table, young woman.

Q: Thank you. Teresa Barger from Cartica Capital.

It’s such a pleasure to have you. And I would have to also tell you that every single person I know wishes the best of success to the Macri administration. But on another topic, if we are so lucky, you are so lucky, to be the secretary-general of the U.N., what would be your top, say, three or five priorities for the United Nations? (Laughter.)

HILLS: If you want to respond.

MALCORRA: Well, first of all, this is in the hands of people who decide based on a greater scheme. So I’m in their hands. You know, my view on the United Nations is that probably it has been over review, over transformed, over changed in layers. So you have an organization that is often very dysfunctional because different people have taken partial looks on what should be done. And in the end, the cost of coordination to get things done is such that it’s impossible to be effective and efficient.

I have a view that the U.N., first, should be what I call issue-centric, that we need an inspirational leadership that rallies the troops internally, but also rallies member states, and discusses issues. And around issues, you sort out how to build a solution to that issue. Instead of being organizational-centric, in which each part of the organization puts its stake in the solution because that’s a way to survive, you start on reverse. And you think about what is it that the people you are there to serve require? And you reverse engineer from that. Sorry for the engineering reference again.

So my sense is that the U.N. needs more than reform—which many people talk about—needs to get practical and define itself issues-based. In doing so, you then start to understand how is it that things should be done. And eventually you get to the reform aspects of what is it that should be changed and how—and why it should be changed.

I say this as a first priority because normally people will ask you, how will you reform the U.N.? And then you get into the discussion of adding a layer, adding a certain level. I hate that. I will go into getting things done. And I think I have one competitive advantage to do that: I’m enough of an insider to understand what is needed and enough of an outsider to understand how this should be done. So that’s how I see my priorities vis-à-vis the organization.

Vis-à-vis the world and the big problems of the world, I believe that there is a strong need to have the secretary-general playing a very, very significant role of bridge builder, of facilitator. This is a moment where things get stuck very often, so having the notion of the secretary-general who can reach out and talk quietly to parties and propose options and alternatives is very important. But at the same time, be ready, should that be necessary, to stick your neck out and say, I’m going to use Article 99. For the ones who don’t know, it’s the article where the secretary-general brings issues to the Security Council. One needs to be very careful with that, but needs to be ready in the search of solutions to use it should there be a need.

And the other thing is that one also needs to balance a lot and invest a lot on prevention and, again, the good offices of the secretary-general. But not only in peace and security, but also on climate change, on disaster risk reduction, on the main issues that the world is facing today.

I’m coming from the oceans meeting. You know, when you look at that, if we don’t do prevention and action soon, we’ll get into trouble. So that is something that the U.N. needs to move into.

I see—my good friend Lynn Pascoe here has been a champion of this, and he’s been frustrated by the fact that we haven’t gotten far enough, because clearly member states are ready to give money when these disaster(s) occur, but are not so keen to give money ahead of time. I think that’s central to the change that we need to do. And my sense is that the 21st Agenda, the climate change agreement, and a couple of other things that have come to fruition will allow the next secretary-general to do it.

HILLS: Well, that was a wonderful response to a very difficult question, in many respects, and right within our time.

MALCORRA: (Laughs.)

HILLS: The minister has to return to Argentina, but I think you all agree with me Argentina is extraordinarily fortunate to have someone with her background, knowhow, and brainpower. And we as a friend of Argentina will enjoy working with you in the months and years ahead.

So thank you so much for being with us, and congratulations for all you are doing and your great thoughts.

MALCORRA: Thanks, Ambassador. Thank you all. (Applause.)


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