How Powerful Is Chile?

Latin American economies have reacted to the drop in global commodity prices, but Chile is a different story. So how powerful is Chile?

Earlier this month, Bolivian president Evo Morales accused neighboring country Chile of establishing an unauthorized military base near their shared border. The dispute threatens to upset the fragile balance of power in South America.

But should Bolivia be worried? How powerful is Chile, anyway?

In today's Seeker Daily dispatch, Lissette Bodilla explores the curious case of Chile, whose military and economic power is unique on the continent.

While neighboring countries Argentina and Peru are considered to have more powerful traditional military forces, Chile is renowned for its technologically advanced equipment and well-trained forces. The country has a standing force of around 140,000 soldiers, with a large yearly defense budget of around $5.5 billion.

Chile also has a strong economy for the region. With a GDP of nearly $260 billion, the country rates highly on economic metrics like competitiveness, development and per-capita income. Chile also enjoys a relative lack of government corruption, by international standards.

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Economic stability is enhanced by more than 20 trade agreements with 60 countries, including the U.S. and the European Union. Chile was the first South American country to join the Organization for Economic Co-operation and Development, an alliance of 24 high-income countries.

All of this makes Chile a formidable player in regional politics.

So what's the border dispute about? Bolivia has accused Chile of setting up a military base 15 kilometers from the border, and close to the disputed Silala River, which is a whole other issue. The base is in violation of international norms, Bolivia says, which prohibit military outposts less than 50 kilometers from international borders, to avoid confrontations.

"This installation is an aggression to the life, homeland and to Bolivia," Bolivian leader Morales said during a recent public appearance Chile, however, has denied the existence of the military base.

With its strong international alliances, growing economy and advanced military, Chile is a regional leader in South America. But it does have its share of disputes, particularly with neighbor Peru.

One final note: If Bolivia feels threatened, it may just be out of habit. Chile seized much of Bolivia's mineral-rich land in the late 1800s.

Learn More:

Reuters: Bolivia's Morales accuses Chile of setting up military base near border

World Bank: Chile

WSJ: Chile's Economy Slows Sharply, As Hit From Copper Price Fall Dazes

OECD: Chile's accession to the OECD