Brazil has gone on a buying spree as part of a National Defense Strategy that includes renewal of the military infrastructure and equipment. Amid a scramble among European suppliers for a share of the Brazilian arms market, Spain is at risk of losing its premier position to neighborly rivals, industry sources said.
Despite an economic slowdown resulting from the global recession, Brazil this year has upped its defense procurement budget to $5.6 billion from $3.6 billion last year. Defense Minister Nelson Jobim indicated the military overhaul involves spending on major items, including fighter aircraft, helicopters, tanks and armored cars. Naval craft purchases will include submarines, frigates and smaller vessels.
President Luiz Inacio Lula da Silva has said the additional spending is part of his overall National Defense Strategy, set out as an elaborate program of military regeneration last year. He said Brazil would be looking to spend at least 50 percent more between 2009 and 2010.
Lula's announcement has led to a scramble among suppliers anxious to secure a share of the market, especially since Brazil expects to buy on what industry experts see as lucrative financing terms.
Statistics from the British government's Defense and Security Organization export data show that three of the top five military suppliers to Brazil between 1998 and 2007 are major European players in the defense and security industries.
Spain so far has topped the list with $977 million of supplies, France comes third with $505 million and Britain ranks fifth at $300 million. Israel is second on the list, with $540 million, and the United States, surprisingly for some analysts, comes fourth at $425 million.
The promise of increased sales in an otherwise lukewarm market has pitted Brazil's defense partners against each other, with more European suppliers such as Sweden and Italy and outsider South Africa following close behind.
In July industry sources reported that Brazil was in the process of acquiring up to 250 German Leopard tanks to be deployed along its borders. Brazil shares nearly 10,000 miles of land and water frontiers with 10 countries. The gradual decline of its domestic defense production industry has dealt a blow to the military's battle-readiness.
Brazil under successive military dictatorships in the 1970s and 1980s built a formidable defense production industry that fell out of favor when democracy returned to the country.
Now Lula wants to revive Brazil's defense production capacity and has announced plans to build Brazil's own nuclear-powered submarine with French assistance.
The military rearmament and assertion of Brazil's nuclear capacity are seen by analysts as part of Lula's initiative to establish the country's pre-eminence in Latin America. A diplomatic campaign is under way to secure a permanent U.N. Security Council seat for Brazil.
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