S. American defense spending set to fall

April 17, 2012 at 5:04 PM
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BRASILIA, Brazil, April 17 (UPI) -- Overall arms spending in Latin America is likely to be flat because of heavy cutbacks in Brazilian defense programs and cash constraints on military expenditures by other countries in the region.

Last year Brazil began to row back on multibillion-dollar defense expansion programs, the result of a wide-ranging review of government spending by President Dilma Rousseff soon after she took office.

Defense spending plans initiated by former President Luiz Inacio Lula da Silva were affected in the cutbacks.

Analysts said the downward trend, reported by the Stockholm International Peace Research Institute in its latest review of global arms spending, could be temporary and a rebound couldn't be ruled out.

Brazil is still deciding when to buy replacements for aging fighter jets -- mostly reconditioned French Mirage fighters. The so-called FX-2 fighter jet competition that aims to replace the old inventory has been deferred a few times since Lula da Silva revived it in 2008.

A review that results in a multibillion-dollar purchase is imminent and may lead to a purchase program worth $9 billion or more, officials said.

Current plans call for the purchase of up to 36 fighter jets for the Brazilian air force. Boeing, France's Dassault Aviation and Sweden's Saab are competing to win the deal.

If a deal is struck that will catapult Latin America again into big defense spenders and will likely encourage other regional air forces to follow suit with copycat defense upgrade programs, analysts said.

The trends reported by SIPRI, therefore, may not last long, analysts said.

World military spending leveled out in 2011 after 13 years of increases, SIPRI said.

The military expenditure in 2011 totaled $1.74 trillion, almost unchanged since 2010 in real terms.

The institute this week published a comprehensive annual update of its military expenditure database.

"The small rise of just 0.3 percent in 2011 marks the end of a run of continuous increases in military spending between 1998 and 2010, including an annual average increase of 4.5 percent between 2001 and 2009," SIPRI said.

During the year, Brazil was one of the world's top six military spenders, alongside France, Germany, India, the United Kingdom and the United States, that made cuts in their military budgets, mainly to balance budgets.

Other states, notably China and Russia, increased their military spending markedly.

"The after-effects of the global economic crisis, especially deficit-reduction measures in the USA and Europe, have finally brought the decade-long rise in military spending to a halt -- at least for now," said Sam Perlo-Freeman, head of SIPRI's military expenditure project.

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