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Military Expenditures Keep Growing

Mar. 25, 2014 - 12:39PM   |  
By JOSÉ HIGUERA   |   Comments
Narcotics Fight: Brazilian military policemen conduct operations against drugs at a shantytown in the outskirts of Rio de Janeiro.
Narcotics Fight: Brazilian military policemen conduct operations against drugs at a shantytown in the outskirts of Rio de Janeiro. (Agence France-Presse)
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BUENOS AIRES — While its defense expenditures do not match that of the Middle East, Asia-Pacific and Eastern Europe, South American military spending has steadily risen since 2005.

In fact, defense expenditures there almost doubled between 2006 and 2010, from US $17.6 billion to $33.2 billion, according to reports from the Union of South American Nations (UNASUR), a regional political association integrated by 12 nations.

Meanwhile, the figures given by the Stockholm International Peace Research Institute (SIPRI) show that South American total military expenditures rose from $47.3 billion in 2002 to $67.7 billion in 2012.

While some denounce the expenditure growth as proof of a South American arms race, personnel costs, including wages and housing, are absorbing an average of 82 percent of military budgets.

What’s left for equipment procurement is largely being devoted to replacing older, obsolescent hardware.

“The perspective of the growth in military expenditure could be misleading, because it is not happening just because most of the economies in the South American region are currently doing well and, as a result, governments have more financial resources to spend on it,” said professor Fernando Wilson, researcher and analyst of the Ibañez University in Santiago.

“The military expenditure has been growing because there are needs that are being addressed that way, which are not necessarily related to defense but to the wider conception of security. It is what is happening in answer to the challenge represented by the so-called new threats, like fighting insur­gency and organized crime activities like narcotics trafficking. That is the case of Colombia, Peru and, in one sense, Brazil,” he said.

“On the other hand, there are the traditional roles and missions of defense, including protection of the national territory with its maritime and airspace and, of course, deterrence, that remain important and foremost to the armed forces,” he said.

South America has its tensions, but countries have been attempting to solve border issues peacefully. Since its first Expenditures Report issued early in 2012, the UNASUR Defence Council has pushed to increase trust between members, in part by promoting greater transparency about national military spending.

Brazil is the top spender, accounting for roughly half of all South American outlays on defense, and according to SIPRI, was the world’s 11th largest defense spender in 2012.

Brazil’s military expenditure increased 34 percent from 2010 to 2012, according to a government report released in 2013. That upward trend began in 2004, and by 2012 had registered 480 percent growth.

The report said Brazilian military spending in 2012 stood at $33 billion. Military expenditure rose again last year to $34 billion but declined to $31 billion this year in the face of economic pressures.

Despite the generally upward recent trend in spending, military spending over the past three decades has had a relatively low priority. A portion of the Brazilian public still remains wary of the armed forces following a military dictatorship that ruled until 1985.

Brazilian military spending represents only 1.6 percent of gross domestic product, though authorities such as Defense Minister Celso Amorim have said they want to increase that figure to 2 percent, more in keeping with other emerging countries.

Brazil wants to bolster its armed forces and play a more relevant role in international security and politics, a move that includes aspirations to hold a permanent seat in the UN Security Council, as promoted by the previous government of President Inazio Lula da Silva in the 2000s. These international goals are driving programs such as building a fleet of diesel-electric submarines with the assistance of France, which is also helping advance plans for building a first nuclear-powered submersible.

Brazil is also looking to equip its single aircraft carrier with an upgraded air wing and recently selected the Saab Gripen to provide the Air Force with advanced fighter jets.

An improved military is also deemed necessary to protect borders and natural resources, including water, agriculture production and cattle raising, and the oil and gas deposits found along its coast. A portion of the revenue from oil and gas will be allocated to pay for the expanded military and its equipment, with a accent on maritime and air forces.

In Venezuela, following a buying spree in the last decade that included procurement of Sukhoi Su-32 fighter jets and a large number of Russian-built helicopters and air defense systems, the country’s military spending halved between 2009 and 2011.

Spending revived in 2012, rising 42 percent after Venezuela took a $4 billion loan from the Russian government to fund a military hardware modernization program. The focus of the investment is to bolster land forces equipment and introduce more armored vehicles, and to increase air maritime patrol assets and air defense systems.

Still grappling with internal conflict that has kept its armed forces focused on counterinsurgency operations, Colombia increased its combined defense and security budget by 11 percent in 2012 when the government launched a four-year program to bolster military and police capabilities.

The combined expenditure in 2013 amounted to $14.42 billion, of which $9.76 billion was earmarked for the military. That figure is projected to rise to $9.92 billion this year.

While the focus on combating guerrilla organizations continues despite negotiations to end the conflict, the increase in funding is aimed to bolster conventional capabilities in defense of national territory, including the acquisition of combat aircraft more advanced than its fleet of Kfir jets.

Chile has slowed its military procurement after operating frantic re-equipment programs during the last decade. While manpower was reduced, especially in the ground forces, aging and near obsolete air, maritime and ground hardware was replaced with new and secondhand equipment.

Spending in 2013 stood at $2.9 billion with acquisition priorities being amphibious transport, air mobility, C4 and intelligence, surveillance, target acquisition and reconnaissance (ISTAR) capabilities.

“Chile has shown its will to contribute to international security by participating in peacekeeping operations since the ’90s, and it has been in Cambodia and East Timor in the past and it is now in Haiti. One lesson learned in those experiences is how important and sensible it is to have up-to-date equipment, including the high capacities of integration and interoperability with forces of advanced nations demanded by such operations,” Wilson said.

Military procurement is funded through the Copper Law, a bill passed in the late 1950s that in its current form allocates 10 percent of the sales of copper by state-owned CODELCO each year, with an annual minimum of $290 million.

High international copper prices have created a surplus fund since 2005. The surpluses were consolidated in 2011 in a Strategic Contingency Fund (FCE), worth almost $5 billion, which can be used only for military procurement.

Changes to the Copper Law have been discussed since the late 1990s, and President Michelle Bachelet, minister of defense between 2002 and 2004 and recently inaugurated for her second administration, has promised to derogate the Copper Law and to end the FCE.

Nevertheless, authorities said those changes will be aimed at increasing political control, not diminishing expenditure.

Portions of funding for the Ecuadorean armed forces also are sustained by oil revenues that supported expenditures of $7 billion between 2007 and 2010, with an average of $1.5 billion per year, and rising in 2012 to $1.6 billion. The investment has been used to procure UAVs, frigates, helicopters, light strike aircraft and submarine upgrades.

Peru is also increasing military spending. A 2013 budget of $2.9 billion is planned to rise 13.38 percent each year until reaching $5.5 billion in 2018.

A Central Agency for Defense Procurement was created in 2013 to handle acquisition and upgrades of equipment as well as the offsets required.

Programs launched in recent years to upgrade fighter jets and frigates are advancing slower than planned. More urgency is being given to the acquisition of equipment to fight the Shining Path guerrilla movement, which reappeared in 2003 and made itself strong by allying with drug traffickers.

Twenty-four Russian-built Mi-171 medium transport helicopters were ordered in late 2013 to replace worn-out Mi-8s and Mi-17s, and Peru also announced a contract to procure a number of Alenia Aermacchi C-27 Spartans to replace older Antonov An-32 transports.

Argentina has increased its military budget 142 percent since 2003, but nearly 90 percent of the expenditure goes to pay for personnel.

However, a share of the operations budget is being diverted to pay for deploying Army troops for border patrol because the constabulary National Gendarmerie have been shifted to fight crime and police corruption in urban areas.

Air Force elements are also supporting surveillance and control of the triple-frontier area around the river Parana, where the borders of Paraguay, Argentina and Brazil converge, and where traffickers of drugs, weapons and people are active. Meanwhile, the long-postponed upgrade and replacement of a wide range of equipment is proceeding slowly or not at all.

Among the smaller players in the region, Uruguay cut its spending 4.1 percent in 2013, bringing it down to $878 million and complicating plans to acquire fast combat jets and offshore patrol vessels.

Paraguay has continued increasing its budgets, which grew 43 percent to reach $423 million in 2012, under a plan to modernize the equipment of the three services and reduce manpower.

“It looks like the current situation of increasing military expenditure will continue for long, to be affected only by the state of the economies, fiscal budgets and the will of the governments to invest in military procurement,” Wilson said.

“Besides traditional needs in platforms and systems, where there is much interest in increasing transport aircraft and helicopter fleets as well as in [offshore patrol vessels] and [maritime patrol aircraft], there is a clear trend in South America to increase and to improve C4I infrastructure, which is evident in Brazil, Colombia and Chile. There is also a growing interest on ISTAR, which is most evident in the growing use of UAVs in most of countries and the procuring of Earth observation satellites,” Wilson said. ■

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