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Chile is solidifying its position as one of the most advanced military powers in Latin America. In a couple of years, it will have the most advanced fighter jets (F-16s Block 50) and submarines (Scorpenes) in the region, plus well-equipped warships. Rafael's Spice guided bombs and Derby beyond-visual-range air-to-air missiles are expected to come with the new F-16s. Meanwhile, Chile's 30-year-old F-5 jets continue to be upgraded, with color cockpit display panels and mission computers from Israel Aircraft Industries.

All this comes in addition to the army's reorganization, which so far has resulted in the acquisition of 200 used Leopard I tanks (with night-vision equipment), hundreds of M-113 armored vehicles, new logistical equipment and - perhaps most important - a doctrinal shift that introduced professional soldiers and put greater emphasis on communications and technology. Other items Chile is shopping for include amphibious vehicles, air-defense missiles and advanced jet trainers.

To be sure, nations have always spent roughly in proportion to their wealth. But in Chile's case, the military spending is comparatively expensive. Chile is spending about 4 percent of its GDP on defense - one of the world's highest ratios. Peru and Argentina spend 1.3 percent, while Bolivia spends 1.6 percent. 

Those figures aren't likely to change much. Chile's defense funding is mandated by budgetary laws and reinforced by memories of border disputes in the 1970s that brought Chile to the brink of war with Argentina and Peru. Higher copper prices have meant more cash from Chile's state-owned copper company. Moreover, Peru and Argentina have drastically scaled back defense spending due to economic distress. Bolivia is impoverished and has a tiny military force. 

Chile's modernization is more about quality than quantity. The air force turned down a cheaper offer for about 24 used F-16s from Holland, opting for 10 new, top-of-the line models. Same thing is true with its recent warship program. The navy has trimmed its surface fleet from 10 to six destroyers and frigates in the past few years, but the newer ships have better sensors and weapons systems. In short, the acquisitions represent a surge in technology more than in dollars spent.

But all this high-tech weaponry is alarming Chile's traditional foes. The loudest cries are coming from Bolivia, which lost its coastal territory to Chile in the War of the Pacific (1879-1884). The government, heeding the complaints of a powerful indigenous movement, is pressing Chile to cede back a corridor to the Pacific. Tensions are growing.

Chile's neighbors are not hopelessly outmatched, however. The military balance isn't as tilted as it may seem on paper. No country in the region, except perhaps Brazil, has enough of a military force to launch anything more explosive than a low-scale skirmish.

Also, its neighbors have strategic advantages. Any conflict with Peru would, like in the War of the Pacific, probably necessitate control of the ocean. Peru's navy is capable of challenging Chile at sea, and the complex Pacific currents provide hiding places for  its submarine force. Bolivia's high altitude affords it a natural defense against invaders. In the War of the Pacific, Chile's army avoided marching up the Andes altogether. Argentina is protected by the Andes, too. More importantly, Argentina and Chile enjoy cozy relations as their economies have grown closely intertwined. In a sense, money promotes peace. -- J.C. Arancibia


Military Expenditures as percentage of GDP (2003)
Chile 4.0
Colombia 3.0 (2001)
Ecuador 2.4 
Brazil 2.1
Uruguay 2.0 
Bolivia 1.6
Argentina 1.3 (2000)
Venezuela 1.3 
Peru 1.3
Paraguay 0.9
Source: CIA World Factbook