Chile reconsiders military spending provision

Codelco chief Jose Pablo Arellano has called for an end to the law, in part because it prevents the company from doing business in Peru and Argentina. “They aren’t going to allow a company into their territory and help it do business there if its earnings are later used to buy defense material,” Orozco said.

The law has been in effect since 1958. During Augusto Pinochet's dictatorship, the law was revised to apply to Codelco's gross sales, not just its net profits.

Four democratically elected government administrations that followed all promised to abolish the law, but to no avail. A proposed constitutional reform from 2001 — similar to the one currently before lawmakers — has been dormant since its introduction. 

There has been one slight change in recent years.

As record-high copper prices swelled the national treasury and the military fund for most of this decade — sparking public discussion about how these profits should be spent — the government cautiously moved to take control over part of them. As defense minister in 2003, Michelle Bachelet (who is now Chile's president) succeeded in redirecting a portion of the 10 percent of copper export revenues away from the military, and towards the Ministry of Defense.

But some lawmakers want more of a change.

“Financing that is transparent, technically sound, politically and strategically justified and democratically legitimized is an imperative need and a long-time debt of our political and budgetary system,” said deputy Jorge Burgos, who was an author of the constitutional reform proposed last week.

More GlobalPost dispatches from Chile:

Man vs. Fish: The salmon industry's push into Chilean Patagonia

The recession wine: Is a bad economy good news for Chile's low-cost grapes?

Chilean Patagonia: Icebreakers

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