Sunday, April 4, 2010

Defense Spending Another Victim of Earthquake

Chile was Latin America's largest importer of weapons in 2005-2009. Don't expect that to happen again in the next five years. The massive post-earthquake rebuilding effort is changing the government's priorities, including the armed forces' budget. Specifics are few so far, but there was an illuminating bit of detail deep in an army press release last week (translated): "...Some international activities will be suspended; skills courses will be postponed to free up personnel for reconstruction and humanitarian labors. At the same time, plans for operations and maneuvers will be reassessed, with the goal of executing an austere budget in this year of reconstruction." Indeed, if a slowdown in defense spending wasn't already gathering momentum, the earthquake has all but ended Chile's 10-year military spending boom. Even before the quake, new president Sebastian Pinera favored eliminating the law that earmarks 10% of the national copper producer's revenue to defense acquisitions. A bill in the legislature seeks to replace that funding source with four-year strategic acquisition plans. To be sure, the military and its backers are vowing to maintain ample budgets for the armed forces. But Pinera can use his conservative credentials to push through changes. Of course, the military's role in providing security and ferrying supplies to ravaged areas has only proven the worth of helicopters, aircraft, ships and all-terrain vehicles. Chile's government is rumored to be looking closely at more purchases of helicopters (perhaps a few more Sikorsky Black Hawks) and transport airplanes.

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