Chile, Sept. 18 (UPI) — Chile is closely watching increased military investment by neighboring Peru and Argentina as Santiago faces tight budget constraints aimed at curbing public spending and strengthening its fiscal position
Peru’s government submitted a 2027 budget proposal in early September that would increase funding for defense investment projects by 283% to about $754 million.
Argentina, meanwhile, is moving ahead with plans to strengthen its armed forces with 24 F-16 fighter jets and expand its naval capabilities through plans to acquire three submarines and two frigates.
Six former Chilean defense ministers from across the political spectrum told newspaper El Mercurio that the military buildup by neighboring countries “requires special attention.” They also questioned delays in funding for the strategic capabilities of Chile’s armed forces.
They said postponing the funding could undermine the credibility of Chile’s defense policy, which should not depend on annual fiscal pressures.
Chile remains one of the South American countries with relatively high military spending compared with the size of its economy.
The Stockholm International Peace Research Institute reported that Chile spent the equivalent of 1.52% of its gross domestic product on defense in 2025, compared with 0.81% in Peru and 0.56% in Argentina. Colombia spent 3.52% and Ecuador 2.10%.
Uncertainty remains, however, over how much Chile will be able to allocate to defense next year as the government implements a significant fiscal adjustment. The 2027 budget proposal is due to be presented by the end of September, and President José Antonio Kast has warned that it will be austere.
In 2020, Chile replaced a military financing mechanism known as the Reserved Copper Law, under which revenue linked to copper sales helped finance the armed forces, with a multiyear fund for the renewal and maintenance of strategic military capabilities.
Some contributions required under the new system have been postponed in recent budgets, raising concerns about the continuity of those investments.
Alejandro Riquelme, a lawmaker from Kast’s governing Republican Party who represents the southern Magallanes region, told UPI that Chile should closely monitor increased military investment by its neighbors but should not automatically respond by increasing its own acquisitions.
He said that although Chile has strong military capabilities, the country urgently needs to improve maritime and aerial surveillance, expand anti-drone systems and prepare for electronic warfare.
“Chile must modernize its defense, but with strategic intelligence. It is not about competing to see who buys the most expensive system, but about having effective, sovereign and sustainable capabilities to defend the country,” Riquelme said.
Diego Jiménez, a security and geopolitics <a href="https://bitcomme.com/use-of-ai-backfires-on-an-expert-witness-at-trial-they-have-biases-2/” title=”Use of AI backfires on an expert witness at trial: "They have biases"”>expert and researcher at the School of Economics at Universidad San Sebastián, told UPI that increased defense purchases by countries bordering Chile do not necessarily signal a new regional arms race, but instead reflect domestic policy needs.
“Peru is in a cycle of high political instability, which historically has led it to focus part of its attention on its relationship with Chile, particularly from the standpoint of renewing its capabilities,” Jiménez said.
He said Peru historically has invested in replacing aging vehicles and vessels, but high equipment turnover has made it difficult for personnel to develop the expertise needed to maintain those capabilities over the long term.
Argentina, meanwhile, has one of the lowest levels of defense spending in Latin America, but its relationship with Chile continues to generate tensions in some sectors.
Gustavo Javier Valverde, chief of staff of the Argentine Air Force, recently referred to Magallanes, the southern region and the Drake Passage in the context of Argentine “sovereignty,” saying his country needed to maintain a presence in the area.
In Argentina’s case, Jiménez said military spending is being directed toward acquiring capabilities rather than improving working conditions for personnel.
“Therefore, we are not facing a wave of modernization of the armed forces,” he said.
Jiménez said he does not expect the changes to alter South America’s strategic balance, which historically has favored Brazil and, to some extent, Chile.
