Brazil & Southern Cone - June 2006 (ISSN 1741-4431)

On 8 June the defence minister, Vivianne Blanlot, announced the government's plans to scrap a Pinochet-era law that obliges Codelco, the state owned mining company, to hand over 10% of its sales to the military. After a shaky start to her mandate, coupled with widespread discontent over the government's failure to spend much of the country's record windfall copper profits, and the recent accidental death of dozens of conscripts, President Michelle Bachelet wishes to redress a law that is redolent of the country's militaristic past. 

The president may also have been waiting for the result of the Peruvian election before deciding to cut the military's spending; had the nationalist Ollanta Humala won, rather than Alan Garcí­a, the government would probably have been more cautious.

Blanlot said that by the first quarter of 2007 Bachelet will ask congress to let the government use the funds for purposes other than the armed forces. In 2005 Codelco had revenue of US$9.4bn, meaning the military received just under US$1bn; this year, with copper prices touching US$4 a pound last month (the government budgeted for just 99 cents), the armed forces will receive over US$1bn. Chile spent 4.4% of its GDP on defence in 2005, more than any other country in Latin America; Colombia, in the midst of a civil war, spent 3.5% of GDP on defence. According to a poll published in May by Mori Chile SA, almost 75% of Chileans want the government to spend more of its copper windfall now and the timing of Blanlot's announcement appears to be a concession to public demands. 

q On 8 June she headed to Washington for a 45-minute meeting with President George W Bush. Apparently the meeting was a success with the US president, buoyed by some rare good news from Iraq, impressing Bachelet with his "good sense of humour", his emphasis on the US's commitment to combating poverty and social inequality in Latin America as well as his desire to maintain current good relations between Chile and the US. Crucially, Bachelet said Bush did not attempt to apply any pressure on Chile to vote for its preferred Latin American candidate for a place on the UN Security Council. The choice is between Venezuela and Guatemala, with the US strongly advocating the case for the Central American country.