The Foreign Service Journal, April 2006

duced shipping links that lasted until 1982, along with the first external air links, operated by the Argentine military airline LADE. “Things were pretty grim, really, before 1982,” Richard Cockwell admits. “The place was in decline. People were streaming out and there wasn’t much hope. Not everyone realized it, but the feeling was there.” Now, under the 1985 Falkland Islands Constitution, citizens elect eight councilors every four years. Every year the councilors elect three of their number to serve on the Executive Council alongside four appointed officials, all presided over by the appointed governor, a senior British diplomat. The current governor, Howard Pearce, came to the Falklands after three years as high commissioner to Malta. Tall and broad in an immaculate dark pinstripe suit, he looks much younger than his 56 years while relax- ing in an easy chair over coffee in his sunlit office at Government House. A self-proclaimed “Falklands fanat- ic,” he clearly enjoys his role and is committed to progress, even as he describes the job as “schizophrenic.” The gov- ernor is caught in the middle, required to simultaneously represent local views and desires to London and transmit London’s views and desires back to them. Other than defense needs, the Falklands have not cost British taxpayers anything since 1986. In 2004, for exam- ple, the islands enjoyed a comfortable GDP of $133 mil- lion. A postwar transformation was paid for by the sale of licenses for commercial fishing inside the internationally recognized Falklands Conservation Zone. Until a recent decline in Ilex squid, licensing and logistical support to fishing fleets earned about $55 million annually. Tourism brings in another $7.5 million a year from cruise ships and “land tourists,” who fly in to enjoy the spectacular scenery and wildlife and some of the best trout fishing in the world. Agriculture accounts for another $5.8 million a year, which still means wool sheep. Options for Revitalization After 1982 the population in Camp finally stabilized at around 400, though the average age is alarmingly high, with many farmers in their 60s or older. Today there are 580,000 sheep in the Falklands on 88 farms, and Falklands wool is considered among the finest in the world. But younger islanders have largely lost interest in putting in the long, grueling hours for low financial return. Options under consideration to revitalize Camp include switching fromwool to organic meat, based on the renowned purity of Falklands’ herds, kept isolated from disease and pests and fed on the open range. Commercial mussel production at Darwin is generating a lot of inter- est in aquaculture and exploratory gold mining is under- way near Mount Usborne, but tourism is the most likely industry to supplant the sheep wool economy. Some 50,000 cruise-ship passengers visited last year, along with over a thousand others arriving by air. An idea gaining momentum is to convert a significant portion of lands now devoted to sheep into national parks serviced by additional guest lodges similar to those now operating at Sea Lion Island, Pebble Island and Port Howard. These spots offer visitors incredible wildlife, horseback riding, hiking, kayaking, trout fishing, scenic boat trips and air tours among some of the most unspoiled natural beauty in the world. The problem is how to pay for it as revenue from fishing declines. Offshore oil is the gorilla in the room. Six promising exploratory wells were drilled in the North Falkland Basin in 1998, with good prospects for further drilling. In 2002 a large area of the South Falkland Basin was licensed to Falkland Oil and Gas Ltd., known as FOGL, a joint ven- ture among Global Petroleum, Hardman Resources and the Falkland Islands Corporation, with the support of the government. A recent seismic survey identified possible recoverable reserves in excess of 200 million barrels. More drilling is expected in 2007, with full-scale produc- tion likely by 2010. According to estimates by indepen- dent consultants, the FOGL license area may contain up to 1,250 billion barrels of oil, roughly equivalent to the oil content of the declining North Sea Gas Basin and Central Graben fields combined. Islanders express little joy and almost-universal con- cern over the potential effects of oil. Economic viability and political “self-determination” will be enhanced as oil revenues and associated infrastructure improvements facilitate long-term diversification, particularly the sup- planting of wool sheep with tourism, organic meat and aquaculture, but at unknown risk to the fragile environ- ment and social fabric. Hopefully, operations can be kept largely offshore, with a limited and temporary footprint on land, but everyone knows oil will change the islands as much or more than did the 1982 war. Overcoming the Past That watershed for the Falklands is increasingly viewed as part of the past. As Prof. Carlos Escude of the F O C U S A P R I L 2 0 0 6 / F O R E I G N S E R V I C E J O U R N A L 49