Until the war of 1982, the rainy, windswept Falkland Islands were a lowly, almost forgotten remnant of the old British Empire. First occupied by the French in 1764, the islands were quickly ceded to Spain, which then ruled the adjacent territory in Latin America. However, the Spanish only established themselves on West Falkland and, in 1765, the British took control of the eastern island. By 1816, due to the islands’ inclement climate and strategic uselessness, both powers had removed their respective garrisons and the Falkland Islands had no permanent inhabitants. A vessel from newly independent
Argentina was sent in 1820, to establish a permanent settlement but was driven out by a British expedition in 1832. The British declared full sovereignty over the Falkland Islands the following year. Argentina refused to recognize British sovereignty and has maintained a consistent claim to sovereignty ever since. This claim was pursued periodically through diplomatic channels until 1982, when an Argentine force overran the British garrison and established a military base on ‘Islas Malvinas’, a name derived from the original French settlers, who named the islands after their home port of St Malo.
After various attempts at negotiation and mediation had failed, a British task force, which had been dispatched at the start of the crisis, was ordered to continue its journey and engage the Argentines. Argentina formally surrendered on 14 June, 10 weeks after the invasion. In the subsequent contact between the two governments, it has become apparent that the issue of sovereignty is a stumbling block and that the Falkland Islands issue will remain a key aspect of Argentine foreign policy in the foreseeable future. Nonetheless, negotiations were opened between the two sides under UN auspices, during 1988. The UK adamantly refused to discuss sovereignty and has not moved from this position ever since – the wishes of the islanders, who are determined to stay British, remain paramount. The islanders also have been granted full British citizenship. Some practical progress has been made on economic issues such as fisheries control and other trade matters, but the Falklands leadership has still refused to move on other issues such as aircraft landing rights. Despite the political inertia, the Falkland Islands has made substantial economic progress in the two decades since the war (see Economy section).
Government The Falkland Islands are a British Overseas Territory. The British monarch is locally represented by an appointed Governor, who is responsible for administration, aided by an Executive Council of six members. The Legislative Council has two ex-officio members and eight members elected by universal suffrage.
Economy The economy is dominated by fishing and sheep-farming. The poor quality of the land precludes large scale crop-growing. Productivity in sheep-farming has increased sharply since the mid 1980s with improved working practices.
However, it is the fishing sector that now accounts for the islands’ much improved economic performance. The industry has grown substantially since 1982, assisted by the introduction of a licensing system in Falklands territorial waters. The presence of large quantities of squid, a very popular dish in several parts of the world, has fuelled an economic boom and the emergence of a ‘squidocracy’ – a group of individuals living on the islands who have become extremely wealthy as a result. There are some concerns about stock depletion, and controls have now been introduced.
Other plans for the Falklands’ economic development have proved less successful. Restrictions on Antarctic development have undermined the islands’ hope of deriving benefit from being an en route staging post. The search for oil and gas reserves began in earnest in 1995 after the signing of an agreement between the UK and Argentina; test drilling started in 1998 but no viable deposits have yet been located.
However, as long as the squid last, the Falklands economic outlook remains bright. Tourism, especially eco-tourism, is increasing rapidly, with about 30,000 visitors in 2001. Another significant source of income is interest paid on money that the government has in the bank. The British military presence also provides a sizable economic boost.
Despite the improvement in relations with Argentina, trade between the islands and the mainland is small and most trade is still conducted with the UK. The government introduced ’The Islands Plan, 2002/2005’ which laid out plans to take the Islands forward over that period in sectors such as financial management, sustainable economy, quality of life and communications. Part of the plan was also to focus on relationships with Latin America, including co-operation with Argentina on matters of common interest such as oil exploration and fisheries.
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