Friday, January 22, 2010

What New President Means for Chile's Defense

Businessman Sebastian Pinera is taking office March 11, becoming the first right-wing president of Chile since Gen. Augusto Pinochet. Do Pinera's conservative credentials mean a boost for Chile's military? Not necessarily. Pinera's campaign agrees that the so-called copper law -- responsible for a huge increase in defense spending the past several years -- needs to go away. The critique: The law provides plenty for acquisitions but nothing for operating expenses; funds must be split evenly among the armed services; and the cash flows from copper don't necessarily coincide with defense needs. Pinera may have another motive. He wants to privatize at least part of Codelco, the state-owned copper company that provides 10% of its export sales to the military. Privatizing would be a lot easier if Codelco didn't have a defense committment. Codelco's military ties also hurt its foreign expansion plans. One area of national security that figures to get a major boost is the national police force. Pinera has vowed to add thousands of Carabineros, and equip them better, to fight Chile's crime problem. Is Pinera a hawk? Yes, but he also knows the value of good relations with neighboring countries. His businesses, including Lan Airlines, make a lot of money abroad. Chile, after all, became a wealthy country thanks largely to free trade.

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