SANTIAGO — Chile's government recently announced the purchase of 18 F-16 combat planes from Holland, continuing a decade-long weapons spending spree that some say is destabilizing South America's military balance.
The $270 million for fighter jets and related equipment and infrastructure is the latest in a long string of acquisitions for the three branches of the armed forces — other purchases have included army tanks, navy warships and submarines, and an earlier purchase of 18 F-16s and other military aircraft.
“Chile now has the most modern weapons systems in South America for its army, navy and air force," said Carlos Gutierrez, director of the Center for Strategic Studies (CEE-Chile)."This power is even more asymmetrical when considering that Argentina and Peru — which once had powerful armed forces — have been in crisis over the past decade in terms of maintaining their weapons systems and renewing their material, while Bolivia’s military institutions are known for their inefficiency and lack of modernization. Of course all of this is creating distrust and concern with our neighbors.”
Government officials have described the purchases as nothing more than an effort to replace obsolete material, some of which dated to the World War II era. But neighboring countries, such as Peru, say the acquisitions have placed Chile at the top of regional military powers.
As soon as news of the recent combat planes purchase emerged, Peru accused Chile of a military build-up and approved increases to its own military budget — above the $650 million it was already planning to spend over the next few years.
Peru's concern, however, is likely rooted in President Alan Garcia's need to turn around his sinking popularity ratings by focusing attention on tensions with his country's historical rival to the south. Peru recently filed a case against Chile at the International Court of Justice at The Hague over territorial waters it claims as its own.
In truth, despite Chile's recent acquisitions, the country is far from the best-armed in South America. Chile’s weapons systems — both in terms of quality and quantity — lag far behind those of Brazil — which is developing a nuclear aircraft carrier — or Venezuela — which has announced the purchase of sophisticated Russian submarines, fighter jets and missiles.
And then there's Colombia. “What Colombia has is even more dangerous than any F-16 or aircraft carrier. It has access to United States satellite technology that allows it to monitor and supervise operations anywhere in real time. No other country in the region can do that,” said an adviser to Chile’s Defense Ministry who requested anonymity.
But according to the Argentina-based Latin American Security and Defense Network (RESDAL), Chile’s military expenditures as a percentage of gross domestic product is one of the highest in the region (2.63 percent in 2008), second only to Colombia (2.97 percent of GDP), which, unlike Chile, is actually fighting guerrilla forces. Two of Chile’s closest neighbors allocate much less to military expenses: Peru spends 1.20 percent of its GDP, and Bolivia 1.61 percent.
According to the Stockholm International Peace Research Institute (SIPRI), the budget available for military expenditures (not actual spending) in Chile was 3.6 percent of GDP in 2006, the latest figure available.
Why is Chile spending so much on military acquisitions, especially in an economic crisis? One key reason is because it can: In addition to the regular annual budget for defense, 10 percent of all copper revenues are automatically transferred to a secret reserve fund for military purchases. With the international price of copper, Chile’s main export product, so high in recent years, this fund has ballooned.
According to the Defense Ministry, the fund now contains about $1 billion, but only a fraction is being spent to replace obsolete material. The law that established this fund specifically states that it must be used to buy weapons and equipment, and cannot be re-allocated for other expenses.
When Peru learned that Chile was going to buy more F-16s, Peru’s defense minister and a lawmaker quickly introduced a bill that would allocate 5 percent of royalties on future mine deposits to the military — similar to Chile’s copper law.
For the most part, though, Chile's military purchases haven't harmed regional relationships: Political and economic cooperation is better than ever. In fact, South American nations, including Peru, were well aware of Chile’s plans to purchase the F-16s. In recent years, the 12 members of the Union of South American Nations agreed to tell each other about their military acquisitions.
Last March, Unasur members took these agreements a big step forward, creating the South American Defense Council to coordinate defense policies. Chile is currently presiding over the council.
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