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Latin America Goes Arms Shopping

Despite being a relatively minor actor in the larger global defense picture, both the popular media and weapons-producers have noted with increased interest that Latin America has recently been engaged in a spasm of arms-buying. Regardless of whether the ‘arms race’ that critics allege or the modernization of militaries that governments insist, the reality is that defense spending and armaments purchases have ballooned regionally since 2003.

According to the Stockholm International Peace Research Institute (SIPRI), by 2008 military expenditures in Central America were up 21 percent since 1999, while in South America they had grown by 50 percent over the same period. The U.K.-based International Institute for Strategic Studies (IISS) claims that from 2003 through 2008 total defense spending for Latin America and the Caribbean grew by 91 percent. Others note that since 2003 weapons sales to the region have more than doubled, while overall military spending rose by 30 percent from 2007 to 2008 alone.

As is the case with most regions experiencing growth in military expenditures, multiple factors are steering the Latin American arms market. Some of the increase in defense outlays is economically-driven, largely pertaining to the rise in commodity prices that boosted profits in countries such as Brazil, Chile and Venezuela.

Chile, in particular, ties profits from its principal commodity – copper – to defense investment. Under a military expenditures law introduced in 1958, ten percent of the revenues derived from the country’s copper exports are funneled directly to the Chilean military for purchases of defense matériel. The quadrupling of copper prices earlier in the decade provided Chile with ample cash reserves through which to fund past purchases of F-16 jet fighters, Scorpene attack submarines and four second-hand Dutch naval frigates, along with recent ones of U.S.-produced Avenger fire units, Stinger anti-aircraft missiles and Sentinel radar systems.

Another factor concerns regional security dynamics, both internal and external. Colombia, for instance, has been waging an ongoing anti-guerrilla campaign against the FARC (Revolutionary Armed Forces of Colombia) rebels for decades. Bogota’s closeness in relations with the United States – reflected in the nearly $500 million in Foreign Military Financing (FMF) extended to Colombia by Washington from 2003 through 2009 – and geography with Venezuela also account for its higher defense investment relative to many of its neighbors. From 2007 through 2008, Colombia’s defense expenditures as a percentage of GDP (5.7 percent) exceeded those of the three other largest regional defense spenders – Brazil, Chile and Venezuela.

Modernization of aging military inventories also serves as a catalyst for larger defense investment. Latin America’s principal ascendant nation, Brazil, is undertaking a major arms procurement initiative. While this is being done partly out of the need to modernize its current hardware, it also a natural byproduct of Brazil’s rising global status.

As one of the BRIC (Brazil-Russia-India-China) nations carving a niche for itself on the global stage, Brazil is intent on building up its military component as a means to augment its foreign policy. The Brazilian government has claimed that in order to protect its natural resources it must strengthen its military deterrent. This approach has led to investments that include five Scorpene submarines, 250 German Leopard 1A5 main battle tanks, 50 EC725 transport helicopters, the development of a new family of armored vehicles (Urutu III) and the possible purchase of 50 EADS-CASA C-212 transport aircraft.

The crown jewel in Brazil’s defense modernization effort, however, is the F-X2 new-generation jet fighter competition, involving the Dassault Rafale, the Saab Gripen and the Boeing F/A-18E/F Super Hornet. An initial $2.2 billion purchase of 36 fighters may lead to an eventual $7+ billion acquisition of 120-150 total aircraft.

The country whose military matériel build-up seems to be causing the most worry in the region is Venezuela. Under its president, Hugo Chavez, Venezuela has used its energy revenues to steadily add to its military arsenal. Chavez has looked to Russia as his primary source for weaponry, spending some $5 billion in recent years on 24 Sukhoi fighter jets, T-92 tanks, an S-300 air-defense system replete with anti-aircraft missiles, 51 military helicopters, and around 100,000 AK-103 assault rifles. Though Chavez has cited worries over U.S. intentions towards his country to justify such purchases, he has also ordered the Venezuelan armed forces to prepare for potential military action against Colombia and been questioned as to why Swedish-produced anti-tank weaponry sold to Venezuela in the 1980s has ended up in the hands of FARC rebels.

Not all Latin American nations are embracing the wave of arms purchases cascading over the region. Smaller nations, such as Ecuador and Peru, have expressed worries about the current trend toward lavish weapons outlays and questioned whether or not an arms race is underway. Paraguay and Uruguay continue to spend little on new weaponry while Argentina keeps its annual defense expenditures low relative to its size and wealth. In total, only three countries – Brazil, Chile and Venezuela – account for 80 percent of all defense acquisitions regionally.

Still, there remains alarm at the expansive sweep in arms purchases being made in a region that has experienced few costly state-on-state wars since the 1940s. But while those observers fret over what they see as a regional arms race, arms-supplying nations prefer to view the increase in military investment as a low-risk/high-reward market opportunity. Several defense exporters – particularly France, China and Russia – instead see a marketplace not entirely beholden to U.S. producers.

Divergent viewpoints notwithstanding, the question remains: Is Latin America engaged in an arms race?

Dissected on a case-by-case basis the answer is: perhaps. The current defense spending habits of Venezuela and Colombia certainly seem to mirror those of European nations, Greece and Turkey, whereby each engages in arms procurement largely in anticipation of conflict with the other. Colombia, however, is actively involved in counterinsurgency operations, whereas Venezuelan President Chavez is making a measured attempt to boost his nation’s regional clout while solidifying his hold on power. The military investment habits of Bogota and Caracas are understandably viewed with alarm by neighboring countries, often resulting in reflexive defense purchases of their own.

Yet despite this, many regional nations are simply conducting a replenishment of their capabilities – a necessary action for maintaining a modern military. Latin America still ranks behind the U.S., China, Europe, the Middle East and the rest of Asia in defense spending and on a regional basis out-spends only Africa, the world’s poorest per-capita continent. However, an outbreak of inter-state conflict would serve to alter the equation completely. Thus the heightened pitch from those voices dreading where muscular displays of newly-acquired armaments may lead.

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