Falklands: guns silent but sticky issues linger
Three months after the Falklands war - one of Britain's riskiest, most expensive, and most difficult military operations abroad since World War II - lingering war clouds are still obscuring progress.
New hostilities are not expected. But British ships still patrol a 150-mile ''protection'' zone around the islands, into which Argentine warships and war planes are advised not to enter. British embargoes on trade and arms are still in place. A last-minute hitch prevented the lifting of bank sanctions.
Diplomatic relations with Argentina are still severed. Buenos Aires has not formally ended the state of war despite Britain's victory and repossession of the Falklands and the South Sandwich Islands. No British aircraft may fly over Argentine territory.
Some 3,500 British troops garrison the tiny Falklands themselves, almost swamping the 1,800 islanders who still raise sheep and spin wool just 400 miles from the Argentine mainland, but 8,000 miles from London.
And until this uneasy, unresolved situation can be settled by diplomacy, the economic outlook for the isolated Falklands remains grim - despite the latest recommendations by the eight-man Lord Shackleton Commission Sept. 13.
Of more global concern is Argentina's own economic chaos. Buenos Aires is now believed to owe industrial countries some $36 billion.
Taken together with huge outstanding loans owed by Mexico, Poland, and other nations, the Argentine debts have helped cause a wave of alarm in the United States and Western Europe about the ability of the Western world's credit system to withstand the strain if one or more major borrowing countries simply cannot pay back what it owes.
Independent observers here predict a difficult period ahead.
Both Britain and Argentina urgently need a solid, lasting solution to the Falklands dispute, settling the issue of sovereignty.
Yet that solution is simply not yet in sight. The government of Prime Minister Margaret Thatcher here refuses to negotiate any transfer of sovereignty to the ''Argentine aggressor.'' Argentina refuses to give up its own claims to ''the Malvinas'' and is about to present its usual resolution to the UN General Assembly in New York demanding talks.
Investors are not going to back oil exploration, fishing, tourism, or knitwear projects if endless political tension and struggle are in prospect.
Without investment, the islands will remain dependent on Britain. But it is hard to see how London can pour money into them indefinitely, or how the islands can prosper without normal ties to the nearby mainland.
Argentina was rash in trying to take the islands by force, and lost its military campaign. The country's urgent need now is to regain control of the $1 billion worth of assets in British banks when it launched its invasion of the Falklands last April 2. That would lead the way to some sort of progress on rescheduling its overall debts.
The British Treasury announced Sept. 13 that it was about to unfreeze those assets, and that Buenos Aires would similarly unfreeze $4.5 billion worth of British funds. But Buenos Aires suddenly insisted its parliament needed to meet, apparently to forestall possible lawsuits against the government.
Experts in London expected the impasse to be broken before long, but the spat showed anew the prickly state of British-Argentine relations.
Independent observers expect the Thatcher government to release ''dribs and drabs'' of money to the Falklands in the coming months, most of it to take care of the 3,500 garrison troops.
Survey work for a new 10,000-foot runway capable of taking British DC-10 transport planes has already begun. Lord Shackleton recommends that L35 million ($59.5 million) be spent on the airfield urgently.
A minister of state at the Foreign Office, Cranley Onslow, will visit the Falklands in early October to gather reactions to the Shackleton report. (A copy is being given to every head of household on the islands.) Defense Minister John Nott may visit later. And Mrs. Thatcher herself may make the trip for the 150th anniversary of Falklands independence early next year.
But no basic negotiations will be opened with the Argentines, the observers say, until after the next British election, expected in October 1983.
Meanwhile, Lord Shackleton warns that the Falklands economy is in danger of collapse unless ''radical action'' is taken. Wool prices have dropped 25 percent since 1976.
The report is pessimistic about exporting frozen mutton or extracting alginates from the vast beds of kelp around the islands, but it recommends that L40 million ($68 million) be spent to develop salmon and shellfish. It is somewhat encouraging about tourism and knitwear. But a full 14 percent of the economy still depends on the sale of stamps.