Eye witness

Seventeen years ago global diplomacy failed to stop a conflict over 12,000 sq km of bleak, sparsely populated islands 480 km off South America.

Efforts to resolve Anglo-Argentine differences over the Falklands/Malvinas proved fruitless. The ensuing conflict cost hundreds of lives, but precipitated Argentina's return to democracy and set the Falklands firmly on the path to prosperity.

The 2,800 islanders now share the highest per capita income in the Americas and the largest number of telephone lines per household in the world. But the furore over Prince Charles's intervention in Buenos Aires last week has demonstrated that the sovereignty issue still festers.

Klaus Dodds, lecturer in geography at Royal Holloway, University of London, said: "The islands now have a large investment portfolio. Increasingly the fortunes of the islands are tied into the global financial system."

Dr Dodds, who has visited the Falklands four times, said that Britain and Argentina are slowly recognising that the Falklands are no longer a remote and impoverished colony. Fishing has overtaken wool as the economic mainstay, with tourism second. Oil exploration only faltered when world prices fell.

"You cannot view the Falklands any more as a junior partner in Anglo-Argentine relations," Dr Dodd said. Prince Charles's visit was important to the healing process.

"To go to the Malvinas memorial in Buenos Aires was enormously important. He was probably right to make the statement given that he was going to the Falklands to reassure the islanders that Britain stands firm on self-determination. The condemnation he received should not be taken too seriously, most people in Argentina have more important things to worry about."

Since 1990 the two governments have drawn closer, discussing fishing and oil exploration. "At the same time the island government has become increasingly confident in asserting its own interests."

The next big step will be whether Falklanders allow Argentine passport-holders in for reasons other than compassionate visits to war graves.

David Jobbins