CIA's "Solution to the Falkland Islands Crisis": 1982 Memorandum
A recently released CIA document from 1982 suggested that Falkland Islanders be offered sizeable relocation grants to leave the Falklands or accept Argentine rule after a three year transition period. But the Task Force was already on its way.
Classified US papers released in January 2017 included a 1982 paper from the then Chairman of the US National Intelligence Council, Henry Rowen, to Paul Wolfowitz, then Director of Policy Planning at the US State Department, entitled "Solution to the Falkland Islands Crisis". It is clear from the document that the British Task Force had already left for the Falkland Islands but the CIA thought that the British had seriously underestimated the capability of the Argentine military.
The paper proposed that Falkland Islanders be offered relocation grants of $100,000 per person to move to the UK or another British administered territory or accept that, after three years, sovereignty would transfer to Argentina.
The paper proposed:
* The immediate cessation of hostilities with the withdrawal of Argentine forces and the turnaround of the British Task Force.
* The creation of an Argentine enclave or large compound in or near Stanley to house an Argentine resident (not to be termed a Governor or an Ambassador) with office staff to act in a liaison capacity. The compound would be under Argentine sovereignty and flag (and Argentine law would apply within it). The Argentine representative would have diplomatic immunity.
* British administration of the Islands, except for the Argentine enclave, would continue in the interim.
* Falkland Islanders would be given three years to decide whether or not to relocate to the UK or British sovereign territory elsewhere with a grant of $100,000 per person. The costs of these grants would be co-funded on a 50:50 basis by the Governments of Argentina and the UK. Those who decided to remain would have to accept that they would become Argentine citizens at the end of the three year period. The paper commented that the cost of relocating up to 1,800 residents would be considerably less than the projected cost to the UK of regaining control over the Islands.
* After three years, the Falkland Islands would become Argentine sovereign territory.
* Argentina would indemnify the British Government for damage done by the Argentine forces during the invasion and pay compensation to Falkland Islanders for any property taken over by the Argentine after the transfer of sovereignty. The amount of compensation would be determined by a panel of representatives from three countries - Malta, Austria, and Finland or Switzerland. Payments would be spread over ten years.
* In the event of oil being discovered within the 200 mile economic zone, exploitation would be a joint venture between the UK and Argentina with an equal share of profits and expenditure.
There were many proposals floated during the period of US shuttle diplomacy by Al Haig and the UN Secretary General and Peruvian peace initiatives. There is no indication that this CIA "think paper" gained any traction within the US administration. Thankfully, with the despatch of the Task Force, Mrs Thatcher's mind was essentially already made up. It is, however, instructive to see how possibly well-meaning US observers could get it so wrong and demeaning for them to suggest that the Falkland Islanders could be bought out. They clearly misunderstood the character of the Falkland Islanders and underestimated the resolve of the British Prime Minister and the courage and military skills of the British armed forces.