qwstnevrythg: F.I. Looks At Latin American Arms Market, Sees Venezuelan Buildup

Saturday, December 03, 2005

F.I. Looks At Latin American Arms Market, Sees Venezuelan Buildup

Posted 22-Nov-2005 11:32

Chinese J-10
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Forecast International, who publishes overall market research forecasts for various sub-markets within the global defense industry (vid. DID's recent UAV market coverage), turned its attention to Latin America in general, and Venezuela in particular, in a recent report.

F.I. notes that over the past year Venezuela has adopted a military modernization program that could be worth as much as $30.7 billion through 2012, which would make the country the leading arms buyer in the region through the rest of the decade. DID has covered the recent freezing of a $100 million F-16 upgrade contract between Venezuela and Israel, at the insistence of the USA - but F.I. notes that many other programs are underway....

SU-30, Export Star

For instance, F.I. reports that Venezuela's Air Force is reportedly interested in 50 more Russian SU-30 or Chinese J-10 aircraft, and an equivalent number of Brazilian Super Tucano counterinsurgency aircraft. A Naval modernization program that could be worth up to $1 billion by 2010 for over 100 ships, submarines, and riverine boats. Meanwhile, the Army is reportedly interested in around 30 transport and gunship helicopters, and is in talks to buy light armored vehicles, artillery, and various electronics systems. An air defense upgrade program worth at least $150 million has also been launched with the purchase of Chinese JYL-1 long-range, 3-D radar systems for command of military air operations.

Venezuelan caudillo Hugo Chavez' anti-American politicies and campaigns to destabilize neighbouring states have provoked concern about the country's military buildup in the USA and within Latin America itself. Unsurprisingly, F.I. notes that Brazil, China, Russia, and Spain appear to be the favored sources for Venezuela's procurements, rather than the USA. DID recommends FAV-Club as a good site to keep tabs on Venezuela's military programs and equipment.

F.I. also notes that these military programs are fueled by, and also dependent upon, both continued high oil prices and Venezuela's ability to keep its production and distribution infrastructure operating effectively.

AT-27 Super Tucano

In contrast, F.I. characterizes yearly military spending in the region as a whole as "in a quiet phase," and notes that traditionally, Latin American military budgets tend to be heavily (80%) weighted toward paying salaries and benefits rather than toward equipment purchases (20%). Chile has leveraged high copper price to pay for some new equipment lately, but even the traditionally strong Brazilian defense market has been rather weak of late thanks to reduced defense budgets and the Lula government's political problems.

Overall, Forecast International sees military spending in the region increasing modestly from $31.75 billion in 2006 to $33.38 billion annually by 2010.

As for US involvement in the Latin American market, its priorities would appear to be elsewhere. Amidst a left-wing screed that illustrates a questionable understanding of both military purchasing, financing, and indeed geopolitics in general, the World Policy Institute does offer a few somewhat useful figures. They claim that military aid to Latin America has increased sharply since 2000, to $122 million by 2003. Observers may note that based on F.I.'s figures, this represents less than half of 1% of overall regional military spending in 2006.

WPI also notes that U.S. funding for military training in Latin America has increased at a proportional rate to its overall global funding for this purpose, to $13.6 million for 2006. This will fund training for 3,221 Latin American soldiers in everything from counterintelligence to helicopter repair. Colombia tops the recent list with $9.3 million in military training aid since 2000, a sharp increase of almost 90% over six years as a result of their ongoing war with FARC and other narcoterrorists. IMET funding to El Salvador, Nicaraguand Panama has also risen lately.

Behind Colombia and El Salvador, WPI claims that Argentina is the third largest recipient of military aid in Latin America, with a total of $6.3 million between 2000 and 2006. Panama is also described as a "major" recipient of military aid, "with a total of $5 million for the same period."

Oddly, Venezuelan military spending did not receive any attention at all in WPI's Latin American "Arms Trade Resource Center Fact Sheet".

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