The Chilean military government headed by Gen. Augusto Pinochet has watched developments in the Falklands crisis with intense concern, convinced that virtually no outcome will be positive to its own interests.
Chile is propping up its defenses along the southern border at top speed against the possibility of aggression by Argentina, a neighbor that never has been too friendly. According to editorials in the local media and private discussions, military thinking here is being shifted from its traditional counterinsurgency posture to national defense.
Chile has its own territorial disputes with Argentina, centering on three islands--Picton, Nueva and Lennox--that lie on the Beagle Channel. Both countries agreed to submit to papal arbitration, but Argentina leaked and subsequently rejected a finding in 1980 by Pope John Paul II favoring Chile's claim.
The dispute nearly brought the two to blows in December 1978, and Argentina's border mobilization brought a Chilean response in kind before cooler heads in Buenos Aires prevailed. Chileans therefore were distressed when Gen. Leopoldo Galtieri said two months ago that the Falklands invasion on April 2 was "only the first step toward the recovery of the Argentine patrimony." The Foreign Ministry here has denied a story now circulating in Buenos Aires that Argentina has given way on the Beagle dispute. A ministry spokesman called the story "psychological warfare" and said they were aware of no change in the Argentine position.
The latest issue of the influential magazine Negocios (Business) lays out the main Chilean concerns for the immediate future: in case of victory, Argentina either might feel secure enough to give way on the Beagle Channel issue, or emboldened enough to attempt an invasion. In case of defeat, Argentina might withdraw to lick its wounds or try to stave off domestic political disaster by turning on Chile.
The last possibility is not the only reason the prospect of an imminent Argentine defeat does not completely cheer up gloomy Chileans, even as Santiago is dizzy with rumors--backed with little substantive information--of the military's cooperation with Britain on intelligence matters. Chile's most influential newspaper, El Mercurio, recently published an analysis of how Moscow stood to profit from the Falklands crisis. The article expressed the common fear that an Argentine defeat not only will provoke the fall of Galtieri but also a resurgence of the populist Peronist movement.
Linked to this worry within the stridently anticommuniust junta is the fear that an Argentine defeat will put the country dangerously close to the Soviet Union. The El Mercurio article points an alarmed finger at Galtieri's recent effusive letter of thanks to Cuban President Fidel Castro for his support, and to Argentina's presence at the current nonaligned meeting in Havana. Not the least of Soviet gains cited is the large new rift between Latin America and the United States.
Political analysts here said they were sure that the El Mercurio article was a particularly faithful representation of the current thinking among Chile's military leadership.
"The country must restructure itself diplomatically, strategically and militarily," the article began, quoting unnamed Chileans who recommend urgent measures against an imminent alliance among Argentina, Peru and Bolivia, all traditional rivals of Chile. The defense budget must be made competitive with that of Argentina, which spends at least twice as much on the military, the article said. It said the Air Force must be given priority, the country's southernmost bases strengthened and a professional diplomatic corps created to carry Chile's cause to world forums.