COLUMN | Armed Forces Pensions

El Mostrador, June 20, 2019

Richard Kouyoumdjian

In relation to Enrique Elgueta’s timely article regarding the magnitude of armed forces pensions in the public budget and the response that Commander Fernando Thauby recently sent to El Mostrador, I have the following comments:

We have seen personal examples like those of Thauby and, on the other hand, the impact that pensions currently have on the public budget. In one case, it helps us understand that the reality of those who serve in the armed forces is not necessarily comparable to those who work in the rest of the public administration or in the private sector, making it incorrect to compare apples to oranges. Therefore, the armed forces require and need a pension scheme that recognizes their particularities, which are significant and include, among other things, the willingness to give their lives if necessary. How much is that worth? I leave that open to the individual conscience of the readers of this medium. On the other hand, it is evident that operational budgets and future investments in defense cannot be held hostage to the size that this obligation has currently reached, which, if no action is taken, will reach complex levels of financing with the national budget. We must do something, recognizing that both sides have valid points in their views.

The response may necessarily have to come from the ongoing review of defense policy by the relevant ministry, which should have as one of its deliverables the type of armed forces and strategic capabilities we need to protect national interests. It may well be that, on one hand, we need fewer personnel with high levels of specialization, and that the intensive use of new technologies allows for a reduction in the need for large contingents. On the other hand, in designing the forces, we must recognize that human capital has a longer professional life than it did 40 years ago, allowing for retirements with more years of service, thereby reducing stress on pensions, but with an impact on the current budget if we do not achieve a significant reduction in personnel through technological modernization and the redesign of the structures and organizations of the armed institutes that prioritize collective efficiency as a whole. It is no longer applicable to view reality from only three distinct perspectives, but rather as one that, understanding the differences between land, maritime, and aerial domains, addresses defense as a whole and optimizes the way funds are invested for this purpose.

The extension of careers is already recognized in the bill seeking to modify the military career, which anticipates the conclusions that will arise from the review of defense policy, but may be correct since it is a fact that people today live longer and that life expectancy has increased over the years. This will help alleviate part of the problem, but major solutions must come from the conclusions of the defense policy review. It is difficult to assign a value to the cost of national defense if we do not have a clear understanding of what type of armed forces we need in light of future threats and an agreement on the national interests we seek to safeguard. With that information in hand, and through a design of capabilities that recognizes that effectiveness takes precedence over efficiency in this area, we will be able to determine how much it should cost to defend the interests of Chileans, including how we reward those who pledge to give their lives if required.

Richard Kouyoumdjian Inglis
Vice President of the AthenaLab Board

Column in El Mostrador, June 20, 2019