Top Eight Countries Dominate Defense Spending in Latin America

by Bill Ostrove, International Military Markets Analyst, Forecast International.

Defense spending in Latin America will remain strong between 2017 and 2021. While allocations will not be as high as in other regions, economies are expected to slowly improve after years of commodity price declines, giving governments more resources for defense. At the same time, governments will continue to battle violent gangs and illegal trafficking.

During that timeframe, defense spending will be dominated by eight countries. Brazil, Colombia, Mexico, Venezuela, Argentina, Peru, Cuba, and Chile will account for a combined 92 percent of the total market in the region.

A brief discussion of defense budgets in these countries follows.

#1 Brazil

Although Brazil is currently suffering from a severe recession and political scandals, its size and economy make it the leader in Latin American defense spending.  Major programs currently include upgrades of the nation’s fighter aircraft, including its Gripens, and of its tactical vehicle fleets, including infantry fighting vehicles, reconnaissance vehicles, and troop transports.

#2 Colombia

Although Colombia’s government recently reached a major peace deal with the FARC, the country will continue to spend on defense as it battles other insurgent groups and maintains international commitments.  Spending will be focused on mobility equipment such as helicopters and troop transports.

#3 Mexico

Defense spending by Mexico increased rapidly between 2012 and 2014, primarily to combat drug cartels and gangs.  Going forward, funding will be used to purchase surveillance equipment, helicopters, troop transports, and patrol boats.

#4 Venezuela

As President Nicolas Maduro’s support has waned, he has increased spending on the military as a way to boost its support.  The military has also been given a larger role in society, taking control of oil production, for example.

#5 Argentina

Even as President Mauricio Macri attempts to reduce overall government spending, Argentina will remain the fifth-largest spender on defense in Latin America.  Priorities include purchasing a supersonic jet fighter to replace Mirage jets retired in 2015.

#6 Peru

National sovereignty, border security, and protection against insurgents will drive spending in Peru.  A steadily growing economy will also support increased defense spending.  Much of the focus of procurement will be on surveillance systems such as radar and vehicles.

#7 Cuba

Cuba is undergoing major changes, including a warming of relations with the U.S., along with minor economic reforms.  Still, the military will continue to play a major role in society.  Owing to the secretive nature of the government, specific procurements are unknown.

#8 Chile

Chile does not face as many threats as its neighbors from drug cartels, gangs, and insurgents.  However, the country’s strong economy will enable steady growth in defense spending.

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