Forecast International assesses military market in Latin America

09:22 GMT, November 24, 2010 NEWTOWN, Conn. | Latin American defense spending is expected to grow from approximately $63 billion in 2011 to more than $65 billion by 2014, according to Forecast International’s "The Military Market for Latin America" report. While these figures appear optimistic, "in general, only about 20 percent of a military budget may actually be available for procurements, with the rest tied up in salaries and sometimes social security or pension funding," said Latin America & Caribbean analyst Rebecca Barrett, the report’s author.

Traditionally, arms sales to Latin America have been subject to economic conditions, but the region has finally emerged from a downward cycle and has shown stability through the most recent global recession. Thus prospects for the defense market are showing improvement.

Internal conflict remains the primary driver behind the Latin American arms market. The region as a whole faces minimal external threat; armed guerrilla groups pose the real peril to regional stability. However, many of these homegrown guerrilla groups are no longer contained within the confines of their own nation and continue to increase in militancy.

“As violence spills over the borders, the governments of Latin America must push for enhanced military capabilities to fight back,” Barrett said. “It is this internal conflict that is driving the long-overdue force modernization for the region.”

Nonetheless, the need to revitalize force structures continues to increase. So far, Chile is the only nation in the region to really claim success in this effort. Though the nation is closing in on the end of its procurement cycle, Brazil is quickly moving up the ranks as the next major sales prospect in the region. Seeking to boost its position as a global superpower, Brazil's need to modernize its armed forces is pressing. Between protecting its vast offshore oil fields and resource-rich Amazon from terrorist groups, Brazil must rely on its military to protect its national sovereignty and secure its wealth.

Venezuela remains another bright prospect, but it should be noted that the majority of Venezuelan arms will need to be financed. Russia has undeniably dominated the Venezuelan market recently with sales reaching as high as $6.6 billion if all current contracts are carried out.

“Russia is pushing hard for domination of the Latin American arms market and has been successful because of the flexible financing options and wide array of equipment offered at reasonable prices,” said Barrett. “In addition to Venezuela, Argentina and Peru are also emerging as lead buyers of Russian hardware.”

Though each country has a unique set of needs to address, according to Barrett, “almost every Latin American country is in need of greater surveillance and interdiction capabilities, whether for land, air, or sea operations.” Primarily operating in the dense jungles and remote locations throughout Latin America, the guerillas and terrorist groups face nominal interference from the military due to a lack of adequate surveillance. Until these needs are addressed, the region will continue to be held hostage by its own internal security situation.


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This article is part of the defpro.focus “The South American Defence Market” which can be accessed here: http://www.defpro.com/focus/profile/the_south_ameri/. 
 

Latin America has to modernize its arsenal from the fifties, sixties etc. if its want to play a role in UN tasks. But also to reduce the maintenance costs and to make its Armed Forces more effective in today's global world. The inner misunderstandings between the States are not more the essential problem in our day´s. - Latin America has a significant participation in peace keeping worldwide. No country is involved in war or conflicts like for example the USA or Canada. Mexico should be a great example to life without Armed Forces. It could be an example for Canada, the other neighbor of the USA! - Latin America also trust more in the US Defense than Canada. Latin America is the most peaceful continent till know! Gerardo Señoráns Barcala Politologue - Economist - Journalist Defense Expert

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Created: 2010-11-24 20:43:31