Chile Defence and Security Report 2009

The Concertación centre-left ruling coalition of President Michelle Bachelet had another difficult year in 2008, suffering from relatively poor popularity ratings and a series of internal divisions. In the early part of the year, the government’s education reforms were the subject of demonstrations and protests by secondary school students. There was also widespread dissatisfaction with the new public transport system in Santiago. The coalition parties suffered a setback in the October 2008 municipal elections.

They also suffered after a scandal over a hospital’s failure to tell patients they were HIV-positive led to the forced resignation of the health minister. Partly as a result of this poor showing, the 2009 presidential nomination race looked more wide-open than in previous campaigns. Former Christian Democratic president Eduardo Frei was emerging as a possible front-runner. José Miguel Insulza, secretary general of the Organisation of American States (OAS), said he was a potential candidate for nomination. Another former president, Socialist Party leader Ricardo Lagos, had earlier ruled himself out, as did former foreign minister Soledad Alvear. A number of analysts believed that for the first time since the end of the military dictatorship of General Augusto Pinochet in 1990, the centre right might stand a real chance of winning the elections, led by businessman Sebastian Piñera of the Alianza coalition. Piñera owns shares in airline LAN and Colo-Colo football club, and has been promising more efficient public administration and greater investment in science and technology. In the event of a centre-right victory, most analysts do not expect fundamental changes in economic policy, which has remained market-friendly under the Concertación. BMI regards all these things as fairly normal for the kind of robust democracy that Chile has become in the almost two decades since the end of military rule. The underlying defence and security position of the country remained comparatively strong, and in our opinion broadly unaffected by shortterm political factors.

With territorial disputes with Peru and Bolivia to the north, some largely resolved but still sensitive issues with Argentina to the east, a regional diplomatic and political challenge from President Hugo Chávezinspired Venezuelan radicalism, and a dependence on imported energy, there are plenty of pitfalls for any Chilean government to negotiate. Bachelet has however managed to improve relations with both Peru and Bolivia, and has worked to put together a regional ‘Arc of the Pacific’ to counter Venezuela’s influence.

In our view Chile has very few internal or external military threats that cannot be contained. The Chilean procurement programme, however, did raise some concerns among the country’s neighbours, particularly Bolivia and Peru. Large-scale modernisation plans for the armed forces were underway, sourcing advanced weapons systems from abroad. The Ministry of Defence was eager to encourage greater cooperation between the services, which are largely independent. The country’s defence industry is small, but should benefit from offset agreements in the near future. Although the defence industry is not as advanced or sizeable as that of Brazil, it is perhaps equivalent to that of Argentina. The number of employees within Chile’s defence industry totals approximately one half of those in Brazil, and is roughly equal to those in Argentina. In addition to small arms and ammunition, Chile now manufactures armoured and soft-skinned vehicles, artillery, ballistic rocket systems, anti-aircraft equipment, infantry support weapons, naval and air craft, aerial bombs and rockets, and radar and electronic equipment.