Brazil to boost defence to protect borders, resources

04 June, 2012 defenceWeb (Reuters)

Brazilian Defense Minister Celso Amorim said the country's growing need to protect its borders, the Amazon rainforest, and massive offshore oil discoveries would lead it to gradually increase defense spending by a quarter to reach roughly 2 percent of Brazil's economy.

During an interview at the Reuters Latin America Investment Summit, Amorim said the country's valuable food, water, and energy supplies could eventually make it the target of a "scramble for natural resources." Given the country's recent economic growth, he added, Brazil must spend more on preparedness and its ability to "react or dissuade any effort to invade our territory."

Brazil has good relations with all 10 of its South American neighbors, and hasn't been to war with any of them since the 19th century, so defense spending has historically been seen as a second-tier priority, Reuters reports.

But President Dilma Rousseff's government has come under public pressure to better defend its borders from drugs and other contraband because of a crack epidemic in Brazilian cities.

At present, Brazil spends about 1.6 percent of its gross domestic product on defense; other countries, including Russia and the United States, spend more than 4 percent, according to the Stockholm International Peace Research Institute. Last year, the figure reached more than 61 billion reais ($30.3 billion), Brazil's defense ministry said.

In the coming years, Amorim said, Brazil should spend closer to 2 percent of GDP, a percentage more in line with that of other big developing nations, such as India and China. The minister gave no time-line for when that target might be reached, but said hypothetically it could take as long as ten years.

Increased spending, Amorim said, would also help nourish a nascent but growing defense industry in Brazil that could supply the weapons and equipment necessary to fulfill the government's defense goals.

Because of strict rules that require Brazilian companies to have a share in defense purchases, either alone or through partnerships with foreign contractors, local industries should benefit from the need for equipment including satellites, helicopters, armored vehicles, and ships. To improve much-needed border patrols, for example, Amorim expects Brazilian companies within four years to have sufficient know-how on their own to supply the country with unmanned drones.

NO TIME-LINE FOR BIG JET ORDER

A career diplomat and foreign minister during the eight-year administration of former President Luiz Inacio Lula da Silva, Amorim helped raise Brazil's profile in global forums like the United Nations, World Trade Organization, and Group of 20 major economies. His success in leveraging Brazil's growing economic might into a role as a voice for developing nations prompted President Dilma Rousseff last year to charge Amorim with seeking similar heft for the armed forces.

Amorim has been working to secure long-sought upgrades to the old and rickety weapons and surveillance systems now used by the military. Chief among planned procurements is a contract for new fighter jets, expected to be worth more than $5 billion when finally awarded.

But procurement in Brazil, even by the slow-moving standards of the defense industry, historically has been stop and go.

The long-pending decision to purchase a new generation of fighter jets, for instance, has been in the works for more than a decade. Though Brazil earlier this year looked set to pick France's Dassault (AVMD.PA) to supply the new aircraft, the government held back on a decision and is still considering jets manufactured by Boeing (BA.N) of the U.S., and Sweden's Saab (SAABb.ST).

Amorim said he hopes a decision will come "soon," but declined to predict whether that meant a matter of months or even years.

A stagnating Brazilian economy, which has come perilously close to recession in recent quarters, isn't expected to impede key defense decisions further, he added. The perceived vulnerability along the borders, around offshore oil fields, and across its farm belt, forests and wetlands will ensure military spending remains a growing priority.

"Even if you bring in less money at home, you can't not pay for a lock on the door," he said.

BRAZILIANS AND NEIGHBORS SHOULDN'T BE WARY

Amorim said the government must work to convince Brazilian society that the ramp-up in spending is worth it, especially because many Brazilians remain wary of the country's armed forces. Brazil's military ruled the country in a dictatorship that lasted two decades, ending in 1985.

Brazil will also work with its neighbors, he added, to ensure that regional cooperation can grow along with military ventures and contracting.

This month, Brazil signed an agreement with Colombia, valued at $10 million, for the purchase of patrol vessels that will be used to monitor the Amazon and its tributaries. Brazilian planemaker Embraer (EMBR3.SA), for its part, works with Argentine partners in the development of a planned cargo aircraft that is expected to compete with other would-be successors to Lockheed Martin's (LMT.N) ageing C-130 Hercules.