Saturday, July 27, 2019

Chile's Military Surrenders its Prized Treasure as 'Copper Law' Ends

Chile's government struck down the principal funding mechanism for weapons systems, which for decades provided billions of dollars and made it possible to acquire top fighter jets, armor and warships. The legislature, where the plan had stalled for nine years, finally voted to end the so-called copper law July 24, and President Sebastian Piñera will sign the bill Aug. 6. For more than 60 years, the state-owned Codelco copper mining company passed on 10% of export sales to the armed forces for weapons purchases. (In 2018 alone, Codelco's total sales were $14.3 billion, most of it in exports.) Now, the military will compete for funds along with all other government agencies. Here are the key points of the new law:
  • Each year, minimum spending floors will be set for maintenance and updates of weapons systems. Those will be based roughly on the average costs over the preceding six-year period. By some estimates, that could be $500 million a year.
  • An eight-year strategic spending policy will guide major acquisitions, and those will be budgeted in four-year increments.
  • All funds that had accumulated from Codelco are being turned over to the national treasury. But the government will create a strategic contingency fund to replace equipment that suffers major damage. It may also be used for acquisitions under the strategic plans.
  • Codelco's annual contributions are not going away anytime soon. It will continue to provide 10% of sales for nine years. After that, its payments will phase out over three additional years.
  • The new law includes steps that shift spending oversight away from the military and into the hands of the elected government. For example, the government's comptroller will review each four-year spending plan, and legislative committees will have an oversight role. In general, defense procurement will become more transparent.



Tuesday, July 23, 2019

Chile's Military Goes All in Against Drug Trafficking

Chile's armed forces have a new mission: They are the latest weapon against drug trafficking, especially in border areas. President Sebastian Piñera signed a decree that gives the military expanded powers and sets guidelines for their new role. The Army, Navy and Air Force will collaborate with police agencies to combat illegal drugs and organized crime. It's a landmark decision because governments have been reluctant to put the military in domestic security tasks since military rule ended in 1990. Piñera, however, says drug trafficking is an epidemic that must be fought with all available tools. Those tools are surveillance equipment, electronic sensors and logistical support the military can provide to watch over a porous border in the north of Chile. There are reservations, if not criticism, of the plan by some government officials, especially among the opposition. Determined to keep memories of the military junta in the past, some want assurances that the military's role will be limited and that the police will not become subordinate to the generals. Others are skeptical that the military can be an effective crime-fighter. The country's comptroller has requested more details and wants Piñera to better define what he means by "collaboration."