In the 1890s up to 1902 there was a naval arms race between Chile and Argentina. Chile had long ago defeated its Pacific rival, Peru (which would not catch up in naval strength again until after World War II) while Brazil's navy, once the strongest in the hemisphere, started to fall behind after its 1893 mutiny. Argentina started buying British-built Elswick protected cruisers-for-export and Italian-built armored cruisers of the popular Garibaldi class. Chile, which had earlier purchased a battleship and two small cruisers from France, also bought a series of Elswick cruisers (including two armored cruisers) and then ordered two fast battleships. The building up of minor powers' navies by purchase in European shipyards was common at this time; only Japan managed to fully switch from purchasing ships to building all of its own ships, while even Russia and Spain ordered ships to add to their own shipbuilding capacity (Spain sent a Garibaldi-class cruiser without its main guns added to the battle of Santiago) and the USA purchased some Elswick cruisers of its own to make sure Spain could not buy them. These ships were the WMD's of the day.
The arms race between Chile and Argentina, unlike many others, did not lead to a war. Certainly the strategic situation was a strange one: either fleet would have had to go around the tip of South America and operate along an extended, hostile coastline with little hope of retreat for disabled ships. The fleets by 1902 were very equal--the older Chilean battleship Prat was probably no more powerful than one of the four Argentine armored cruisers giving an Argentine advantage of 4 to 3 in impotrant armored ships while Chile had a slight lead in protected cruisers (although the two sides appear to have pairs of equivalent ships--3 each--excluding to the smallest and oldest cruisers). However the two new British-built battleships meant for Chile's navy would have swung the balance back towards Chile. Note that the armored cruiser 'Esmeralda' has the same name as an earlier Chilean protected cruiser (see the 1891 civil war description) which was sold to Japan.
An easing of tension allowed Argentina to sell off its fifth and sixth armored cruisers (Japan ended up with them and they fought at Tsushima against the Russian fleet, alongside several other armored cruisers of the O'Higgins type) while England took over the two modern battleships (so Russia could not have them) despite their weak armor and structure by Royal Navy standards. However, it would not be long before Argentina, Brazil, and Chile were all again ordering huge battleships from foreign shipyards for a new pre-WWI arms race.
Below is the fleet buildup including the above-mentioned ships not completed and delivered. Chile's fleet on the left, Argentina's on the right.
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