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Regional Arms Market Heating Up In Latin America
Newtown CT (SPX) Dec 19, 2007 Prospects for the Latin American defense market are beginning to look up as the region continues to stabilize and demand for procurement increases. According to Forecast International's latest annual survey of the Latin American defense market, spending for the region as a whole is expected to top off at $37.9 billion by 2010 and then ease slightly. While only about 20 percent of total defense spending goes toward procurements, $7.6 billion is still a substantial amount for the region as a whole. Furthermore, Latin American nations are notorious for conjuring up additional funding when necessary. The U.S. arms embargo on Venezuela has forced this dynamic country to look elsewhere to fulfill its military modernization requirements. Russia has been enthusiastic in filling this need, heavily promoting its arms in Venezuela over the past two years. These efforts have been successful in encouraging Venezuelan President Hugo Chavez to procure more arms than he had originally intended to buy. While the Venezuelan defense budget does not leave much room for Chavez's ambitious plans, windfall oil income has come in handy to finance such purchases. "A sudden change in prices could devastate Chavez's procurement plans, should it happen midstream," said Rebecca Barrett, author of the Forecast International study. "However, while Chavez's plans are somewhat ambitious, they are not unachievable." As Venezuela continues to place more orders with Russia, Brazil is beginning to rearm itself as well. Shortly after arms sales from Russia to Venezuela topped $4 billion over the course of two years, Brazil this fall announced an increase in defense spending of more than 50 percent. Recent allegations of an arms race between the neighboring countries have been met with fervent denials by Brazil. After appearing somewhat stagnant, Brazil's defense market in recent months has begun to show substantial prospects. According to Barrett, "Future procurements will focus on maintaining national security. As tensions throughout the region are increasing, and violent conflict in neighboring nations threatens the security of Brazil's Amazonian borders, any increases in defense spending are likely to be wielded towards security equipment." By early 2007, signs emerged that a major force structure overhaul was under way in Argentina. Although purchases remain contingent upon economic conditions in Argentina, the national government has announced its intentions to international suppliers. As it is beginning to penetrate the region full throttle, Russia has also jumped on the opportunity to enter the Argentine market. Fortunately for Argentina, with Russia in contention, bartering might be an option for the financing of future procurements. Russian relations with Argentina have been strengthening over the course of 2007, and the list of equipment being offered remains quite extensive. Although its wish list is long, so far Argentina seems to be making procurement decisions based on necessity, not desire. Several other nations are making plans much like Argentina has, rather than exploiting their wallets. Both the Chilean and Peruvian governments are more focused on reorganization than modernization at this time. Chile, however, does have several procurements under way, which has caused Peru to raise an eyebrow. Lack of funding will force Peru to focus its attention elsewhere for the time being. Surprisingly, Colombia continues to fight an overwhelming insurgency rather than pay much attention to Chavez's rearmament efforts. Tensions between the two countries, exacerbated by guerilla spillover into Venezuelan territory, are somewhat at ease as Chavez toils to mediate negotiations between the FARC and the Colombian government. At the same time, President Alvaro Uribe knows better than to let his guard down completely when it comes to Chavez. It remains uncertain whether recent procurements are to fill the pent-up requirements of the past or to maintain a competitive advantage in a regional arms race. One thing is certain, however; Latin American prospects are increasing for the defense industry. Community Email This Article Comment On This Article Related Links The Military Industrial Complex at SpaceWar.com Learn about the Superpowers of the 21st Century at SpaceWar.com
A Growing Edge To Russian Military Sales Part Three
Washington (UPI) Dec 18, 2007 Russia's 21st century ability to out-sell the United States in a remarkably broad spectrum of conventional heavy weapons systems to countries around the world can be traced to one fundamental contrast between the U.S. and Russian economies: America invests in cutting-edge technology and leads the world in software and electronics engineers: Russia is still mired in the old supposedly -- but not really -- obsolete world of "heavy" industry -- working with machinery, steel and metal alloys. |
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