Chile - Domestic policy

Chileans see Lagos as the culmination of Chile's long transition to democracy. Yet, Lagos believes that legislative reforms based on a new Constitution are needed to cement the end to the transition. Unlike Aylwin and Frei, Lagos has taken a stronger and more public stance towards reform. Engineered by Pinochet, the Constitution severely limits civilian control of the armed forces. It prevents the president from appointing and removing military leaders and prevents civilian oversight of the military budget. In early 2002, Lagos negotiated a contract with the U.S. aircraft manufacturer, Lockheed Martin, for 10 F-16 military aircraft. The purchase makes creative use of the allocation of 10% of export revenue earned by the state-owned copper company, Codelco, to the Chilean military. Some observers speculated that Lagos chose to buy new aircraft from a U.S. manufacturer to strengthen his country's position in free-trade negotiations with the United States. Lagos has called for military budget cuts and the creation of a professional and better army staffed by volunteers. Military service is compulsory in Chile.

Yet, Chile's conservative leaders are unlikely to back constitutional reforms without assurances that Pinochet and other military and police leaders will be allowed to retain immunity for human rights violations. Some Christian Democrats have even rejected giving the president the right to appoint and fire military leaders.

Dealing with delicate military issues is only one of Lagos's many domestic challenges. Following the December 2001 legislative elections, Lagos pledged to move forward with his agenda to reform the public health system, to pass a divorce law (strongly opposed by the Roman Catholic Church), and to revise the Constitution (especially in those areas relating to the president's relationship to the military). In the short-term, Lagos sought ways to create jobs to reduce unemployment. While Lagos favors privatization of some state-owned properties, his government is likely to hold onto its most important and most profitable industries. They include Codelco, a copper corporation, Enami, a mining company, and Enap, an oil company.