South American submarine industry set to grow

RIO DE JANEIRO, June 7 (UPI) -- More submarines are set to join the military inventories of South and Central American navies in 2011 as acquisition and construction programs get under way, a report on global submarine markets said.

The total annual value of the global submarine market stands at $16.4 billion and is expected to increase to $18.2 billion by 2021, "The Global Submarine Market 2011–2021" report said.


It wasn't immediately clear if the report takes into account secret shipbuilding and submarine activities of countries outside the conventional reporting areas, such as Iran, North Korea and other Asian countries.

Regional rivalries among states are cited in the report as a driver for the submarine market, which is expected to cumulatively be worth $44 billion across the forecast period, 23.6 percent of the total market.

In Latin America, Brazil and Argentina remain the main spenders with a total value of $8.6 billion, 4.61 percent of the total market.

The current global submarine inventory includes 450 submarines operated in 41 countries. The report said through 2012 about 154 submarines will be bought for a total cost of $186.3 billion. Most of the 41 nations are upgrading fleets or adding to them as a result of changing defense requirements.


In Latin America, emerging economies Argentina, Brazil and Chile have risen to the growing threat of illegal border crossings, many by drug gang members or armed militant groups, and to anticipated risks of sabotage of strategically important assets.

Brazil began spending more on its naval expansion in response to the discovery of several new offshore oil fields.

Elsewhere in Latin America, drug gangs' increasing use of secretly manufactured illicit submersible vessels to transport cocaine and other drugs to North America raised the urgency of government law enforcement agencies' preparedness for the emerging threat and the need for more naval power.

In the long term, continued changes in the costs of construction and the increasing number of nations interested in nuclear-powered submarines will push up the average cost of a submarine, said the report. On average, a submarine costs about $1 billion.

Analysts said the recent rowback on land-based deployment of nuclear power, in particular electricity-generating reactors, in reaction to the March 11 earthquake and tsunami in Japan would likely affect the decision-making for nuclear-powered vessels.

Last year Brazil announced plans to build its own nuclear-powered submarine with French help.

The International Energy Agency in a report Monday predicted reduced worldwide growth in nuclear energy use in response to the Japanese nuclear debacle after infrastructural damage in the March quake and aftershocks.


Analysts said the shift from nuclear power would likely impact on the kind of submarines to be produced over the coming decades.

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