Latin American Defense Market Breaks from Traditional Ties
Prospects for the Latin American defence market are beginning to look robust. Although Latin American military spending is relatively small compared to the Middle Eastern or Asian markets, the region’s military procurement right now shows little sign of slowing.
Plagued with obsolete equipment and outdated technology, the region as a whole finds itself hard-pressed to modernize. Financial constraint has forced many countries to refurbish existing equipment; however, it is no match for the new technology that others in the region can afford.
Over the years, U.S. arms restrictions have hindered many sales to the region, prompting some nations to diversify their options. Colombia and Mexico, though, will likely remain faithful to the United States, as it provides a large portion of defence funding and equipment needs for the two nations. Colombian defence procurement is based wholly on counter-insurgency, and Mexico is beginning to arm for the same. Meanwhile, Chile is nearing the end of a procurement cycle, while Argentina and Ecuador appear to be ramping up. Brazil has entered into a phase of self-sustainment in which future procurements will either be produced domestically or involve intensive technology transfer. The Brazilian Navy’s nuclear submarine program has been resurrected, with $550 million to be invested in the project over the next eight years.
The U.S. arms embargo that provided significant blockades to Venezuelan military procurement has already caused a dramatic shift toward Russian-made equipment. Better prices, loan availability, and fewer restrictions are helping Russia penetrate the Latin American market.
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