Sunday, November 22, 2009

More on the Proposed Military Budget Framework

The proposed financing mechanism for Chile's armed forces would keep a current budget surplus, of perhaps $3 billion, in a contingency fund. The money could be used in case of conflict or to support Chile's peacekeeping missions, according to details given from the Defense Ministry. Meanwhile, the navy's new commander, Adm. Edmundo Gonzales, voiced concerns that the plan has no spending floor. If the country's economy expands, he reasons, more military resources would be needed to protect those assets. Also, he noted that if spending plans are authorized in four-year segments, it may be difficult to finance acquisitions with multiyear loans. Under the current funding mechanism, based on revenues from the state-owned copper company, a minimum of $100 million goes to each of three major branches.

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