By Michael Pelzer, WOLA intern
The past two decades have seen the development and establishment of an indigenous Latin American defense industry (LADI) able to market its products beyond the Western Hemisphere and across the globe. Weapons and military equipment manufactured in Latin America were designed to address security challenges in the region’s vast ungoverned spaces. However, they have caught on not just in Latin America, but around the world. Defense manufacturers are relying on scenario specific designs and low production costs, often described as a “tropicalized” product strategy.
The idea is to occupy a market niche with equipment tailored towards less developed nations, at low cost, and without questions asked. Several Latin American nations have signed contracts with European states, as well as nations such as Liberia, Iran, China, and Russia, to sell indigenously produced military hardware, ranging from long-range missiles and tanks, to seafaring vessels, attack aircraft, and drones.
Defense manufacturers are popping up all across the region, some independently and others with government support. This rise is subsequently fueling an expansion of more established defense manufacturers, forcing them to seek out unions with other military goods producers in order to broaden their international market share. This has raised a number of issues about the weapons’ end users, their impact on regional stability, and their potential for abuse.
The LADI underwent its most significant development during the Cold War, when it had to respond to reductions and bans on weapons sales by the United States—the primary military supplier at the time—to abusive military regimes. This forced many Latin American arms-importing nations to diversify their sources, which in part entailed reaching out to European suppliers, but also by developing domestic industries that would produce indigenous products, often with state funds. As these industries grew, however, they began to move beyond their national security roles, becoming instruments of economic power as well.
While most Latin American nations possess an indigenous military production sector, none is as substantial as Brazil’s. With [projected 2018] defense expenditures totaling $65.3 billion, as well as many established public, private, and public-private defense manufacturers, Brazil’s export of defense technology is set to increase.
Cold War-era fears of relying upon the United States for defense products led the Brazilian military regime to establish a policy link between economics and national security, incentivizing the creation of defense producers through import substitution, or placing a protective bubble around domestic industries. This emphasis continues today with a recent National Defense Strategy report calling for a robust defense industry that possesses the technological capacity to gradually rule out the need to purchase imported services and products.
Brazilian defense manufacturers offer a surprisingly wide variety of products; of these, those that find the greatest market share are also surprising. An exemplary Brazilian product is the A–29 Super Tucano attack aircraft: a small two-seater turbo-prop plane whose role varies from counter-insurgency and ground attack to reconnaissance and training. Countries that operate the Super Tucano include Angola, Brazil, Burkina Faso, Chile, Colombia, the Dominican Republic, Ecuador, Guatemala, Indonesia, Mauritania, Senegal, and the United States. Lending further credence to the capabilities of the A–29 was the U.S. government’s awarding of a $427 million contract to Embraer for 20 of the Super Tucanos to equip Afghan armed forces.
With the exception of the United States, the majority of these nations operate a relatively limited force in theaters for which the A–29’s “tropicalized” technology is well suited. Another top-selling Brazilian product is the Engesa EE–11 Urutu: a six-wheeled armored personnel carrier that can be outfitted for peace-keeping, civil disturbance, and combat roles. It is in use in more than 20 countries, all of which fit the definition of requiring “tropicalized” technology.
The success of these productsis due in part to their producers’ willingness to accommodate the needs of the customers, the versatility of the vehicles, and the offer of off-site technical support and training. Another factor was Brazil’s lack of concern for whom the end-user of the defense exports would be, normally a great concern to traditional Western exporters. Brazilian defense sales come with no strings attached, including those related to democracy or human rights concerns, and no limits on resale to third parties. This allowed Brazil to expand its market share across the globe, with its products often ending up in the hands of nations subject to international sanctions and embargoes.
An example was the early eighties sale of the Avibrás ASTROS II Multiple Launch Rocket System (MLRS) to Libya, which then went on to sell the system to Iraq, which used the system extensively during the 1980s Iran-Iraq War. Complicating things further, Brazil also sold the ASTROS II system to Saudi Arabia; during the 1990 Gulf War, the two nations used the system against one another.
Products such as the A–29, ASTROS II, and EE–11 catalyzed the Brazilian arms industry, establishing an international market and brand recognition, while allowing expansion beyond “tropicalized” sectors. This departure was spurred by the notion that Brazil could produce cutting edge technology for sale to “third-world nations”; namely those to which the United States and other Western nations were often unwilling to export. Countries such as Russia, and increasingly China, have long flooded the market with military hardware to nations “unfriendly” to the west. However, the rise of Latin American providers allows for product tailored to certain uses that often comes without strings attached.
An ambitious pilot project embodying this tactic was the Engesa EE-T1 Osório Main Battle Tank. The Osório was built to be a competitive equivalent to British, French, and American main battle tanks, in terms of both performance and cost. In the late 1980s, Saudia Arabia had promised to purchase the Engesa, but later backed out under political pressure from the United States. Though the Osório never went into full production, its failure was a paradigmatic moment for the Brazilian defense industry. Engesa had proven that it was possible to build an alternative to Western defense technology, an item regarded to be as good or better in terms of performance, while also far less expensive. The lesson learned was that the end recipient was important in terms of assuring a sale.
Today, it is clear that the Brazilian defense industry is employing the lessons of the Osório failure. With projects in the pipeline as varied as the Embraer KC–390 transport aircraft, the ASTROS 2020 multiple launch rocket system (MLRS), nuclear powered fast-attack subs, and the Avibras AVTM 300 cruise missile, it is clear that the industry is by no means pigeonholing itself. Its diversification, along with its technological advancement, are allowing the industry to gain customers around the globe.
The KC–390 is a military tactical transport aircraft that can transport troops and cargo, as well as refuel other planes. It is being built to directly challenge the market dominance of the American made Lockheed Martin KC–130 Hercules, with the 390 costing 5/6th of the price. The president of Embraer has estimated that roughly 700 tactical transport aircraft will need to be replaced worldwide within the coming decade, creating a huge market opportunity for the KC–390. Embraer has already signed a contract with the Colombian government to replace its fleet of KC–130 Hercules. Additionally, Portugal, France, Chile, the Czech Republic, Sweden, and Argentina have expressed varying degrees of interest in purchasing the KC–390.
Building off the sales success of the ASTROS I, Avibrás will be producing an updated version of the missile system. This system is considered to be significantly more versatile than the American equivalent (M270), as it accommodates a variety of rocket and missile types, and is battle tested. The ASTRO 2020 comes with the introduction of the AVTM 300 cruise missile, increasing the system’s effective range to 300 km with a 200 kg payload. Air launched and anti-ship variants are also in the works. The cruise missile itself is expected to be competition for the American made BGM–109 Tomahawk, with the AVTM costing significantly less.
Perhaps the Brazilian defense industry’s most ambitious new venture is Embraer’s plan to build a nuclear-powered fast attack submarine. The construction is a bilateral venture; Brazil will employ French expertise to build the submarine’s hull, and it will develop the design’s nuclear propulsion aspect domestically. This joint venture entails a transfer of technology, meaning that the techniques and designs used to build the hull will be given to Brazilian defense firms. Although Brazil has not expressed intentions to sell this technology, the submarine project has been touted by the Brazilian government as having the potential to enhance military exports.
Brazilian defense companies have catalyzed the growth of LADIs in Argentina with similar expansion coming in Colombia, where internal conflict has led to the creation of indigenous defense projects ranging from personnel carriers and patrol boats, to transport aircraft, including some joint ventures as well.
Compared to Brazil, Colombia’s domestic producers are reduced in both number and scope, but they are expanding. The administration of President Juan Manuel Santos has expressed interest in shifting from being a net defense importer to a net exporter. Between 2011 and 2016, Colombia is expected to spend about $100 billion on defense related equipment. While much of this amount will go to foreign arms purchases, the domestication of arms production is growing.
In recent decades, Colombia has received hundreds of times more U.S. military assistance than Brazil and Argentina, which may have stunted the growth of its defense industry. The lack of U.S. military grants to Argentina and Brazil spurred those countries not only to look elsewhere, but to develop domestic industries themselves. Colombia’s continued ability to obtain free or low-cost weapons from the northern superpower obviated the need for the development of a robust domestic industry.
More recently, though, economic pragmatism, regional tensions, and aspirations for international influence have encouraged Colombia to push for its domestic producers’ expansion. The growth and expansion of Cotecmar, a domestic ship production and repair company, is a key example. Over the past decade, Cotecmar has propelled itself into the international market with patrol vessels. One of its principal successes, with the greatest potential for export, is its Heavy Riverine Support Vessel (HRSV), which features advanced ballistic protection, troop transport capacity, and a helicopter landing pad. This vessel’s versatility stems directly from the Colombian Navy’s experience with riverine patrols in hostile environments. While vessels such as these are relatively unique, the conditions that catalyzed their development are not. Whether it is counterinsurgency, counter-narcotics operations, border patrol, or resource management and protection—nations across Latin America and around the globe are dealing with waterway security. These types of threats paired with the tailored capabilities of the HRSV create a huge new market for Cotecmar, both in Latin America and around the globe. Brazil, the United States, Trinidad and Tobago, and Nigeria have all placed orders.
Colombia’s indigenous defense industry may be nascent, but it is growing fast. The government has expressed the desire to catalyze domestic production, shifting away from an import model to one that will spur economic growth and military certainty.
Argentina has a long history of manufacturing its own defense products. World War II led to the development of numerous domestic products, from jeeps to frigates. The domestic industry’s greatest expansion, however, came with the 1978 passage of the Humphrey-Kennedy amendme
nt, which imposed an embargo on the transfer of U.S. defense technology, on the basis of human rights violations perpetrated by the Argentine government. Although some European powers jumped at the opportunity to fill the gap the American withdrawal created, Argentina’s military government decided to reduce its reliance on international partners and sought to reestablish domestic production. The regime began funneling money into previously forgotten local producers, while encouraging production partnerships with European powers. These partnerships developed the TAM family of tanks and the FMA IA 63 Pampa training and ground attack aircraft, as well as frigates, corvettes, destroyers, and submarines.
Argentina’s historical claims to the Falkland Islands have played an important role in the continued development of its military and domestic defense industry. Years of conflict and contention came to a head in 1982 with the Argentine invasion of the British-owned Falkland Islands. The British victory in the two month 1982 Falklands/Malvinas conflict not only weakened Argentina’s military capacity, it contributed to the dissolution of its military junta by decreasing public approval of the armed forces. Abuses by the military regime, as well as its mishandling of the Falklands war, prompted a profound distrust in Argentine military forces. Consequentially, Argentina privatized its defense sector in addition to other major industries.
With privatization came a reduction in domestic Argentine defense production, with numerous factories closed or repurposed, and in increase in military purchases on the open market. In response to the 2001 economic crisis, the government instituted several import substitution policies, some directly targeting international military technology sales.
Government reinvestment in domestic defense industries led to the reopening of some facilities in the early 2000s, reinvigorating the industry. This shift resulted in Argentina’s development of the CH–14 scout helicopter, as well as the planned overhaul of a TR–1700 diesel powered submarine into a nuclear powered submarine.
Argentina is pushing for further domestic defense development. Its expected 2015 defense budget is US$5.5 billion. At present, Argentina does not have the domestic capacity to provide much needed upgrades for its armed forces; however it appears to desire the capacity to do so in the future. Through international partnerships, Argentina is expanding and strengthening its industry, as in a recent collaboration between Argentine Codesur and South African Paramount, to develop and market armored vehicles. This provides an insight into the Argentine strategy of spurring domestic defense growth through international partnerships.
Argentina does not have to look across the Atlantic for partners. It can turn to its neighbors, even to its traditional rival Brazil. The two nations have partnered on several recent joint projects. These include four 1,800-ton offshore patrol vessels built at Argentina’s Tandanor shipyard, the Embraer KC–390 multipurpose transport plane, and a light utility off-road vehicle named the VLEGA Gaucho.
Argentina’s defensive partnerships are driven by economic opportunity as well as strategic objectives, both of which are exemplified by its Brazilian partnerships. As previously described, Brazil’s defense market revolves around an export-based model, prompting international sales and domestic profit. Argentina’s partnership can be seen as a means of tapping into the same export-based market. Although Argentina will be receiving some of the products being designed jointly with Brazil, they will also be exposed to the export model system and engaging with companies that pride themselves on international market reach. Furthermore, Argentina is seeking already established international partners to stimulate domestic production and international reach.
Brazil and Argentina fall in line on the status of the Falkland/Malvinas Islands, as Brazil has openly sided with the Argentines, noting historical precedent. Recent years have seen a revival in the vociferousness with which Argentina lays claim to the islands. This is especially relevant when thinking about recent oil discoveries in the disputed waters surrounding the islands. A number of research firms, including defense research firm ADS Reports, cite the Falklands dispute as one of the primary reasons for the recent defense industry shift in Argentina: “Defense expenditure is primarily driven by modernization plans, participation in peacekeeping missions and a dispute with the UK regarding the sovereignty of the Falkland Islands.”
Through its international partnerships, Argentina is developing its domestic defense industry while creating international market ties for export. The next few years could see Argentina developing into a prominent arms exporting nation.
The rise of leftist governments, especially that of Venezuela, has been cited as a catalyst for the expansion of military industry in the region. With the election of Hugo Chavez in 1999 came sweeping changes in Latin American state relations. The Chavez government instituted radical nationalization policies and substantial military expansion. Some of the most significant expansions, however, occurred following a 2002 coup that ousted Chavez for three days. These expansions came in the form of billions of dollars in purchases from the Russian government. In terms of domestic production, Venezuela partnered with Russia and Iran to build Kalashnikov rifles and surveillance drones.
Venezuela’s industrial expansion, though worrying to its neighbors, was less disconcerting than their multi-billion dollar arms purchases. Venezuela’s military buildup, paired with their ideological differences and uncertain motives, worried their neighbors and spurred responsive arms expansion in Brazil and Colombia. This regional arms race of sorts has only been exasperated by the increasing instability under Nicolas Maduro.
No discussion of domestic defense industries is complete today without a look at drone technology. Ten years ago, only a handful of nations operated unmanned aerial systems (UAS, or “drones”), and with limited applications. Today, more than 70 nations worldwide employ them on surveillance or kinetic missions. U.S. drug war programs were likely the first to employ drones in the region. These involved few transfers of UAS technology, though, as U.S. military and intelligence agencies have generally preferred to operate drones over international waters and in some countries’ airspace, sharing the resulting intelligence with those governments. Colombia has received some drones from the United States, like the short-wingspan ScanEagle surveillance drone, but no Predator-B or larger U.S. drones have been granted or sold to the region. The persistence of the war on drugs is the biggest catalyst fueling their abundance in Latin America. This initially came in the form of material support from the United States, but as the market began to grow, overseas nations also began increasing their market share. Israel, for example, has especially has pushed its drone technology in Latin America.
Still more is happening domestically, however. Latin American defense producers are designing and building their own drone technology for both domestic use and export, with Brazil leading the way. Just as American and European aeronautical companies have begun expanding into Latin America’s UAS market, Brazil’s Embraer has paired with Avibras to design advanced medium-range surveillance drones. One of the most successful is the Avibras Falcao, which has a 2,500 kilometer range, a 150 kilogram payload, and a 15-hour flight time. Developers say it will be able to “perform reconnaissance, target acquisition, [and] directional shooting support.” Working with Avibras and Israel’s Elbit Systems, Embraer unveiled a tripartite company called Harpia UAS, which has made clear that it aims to market its products both globally and regionally. Its materials state that the “legacy of high domestic technological content will result in a highly competitive UAS solution in Brazil and abroad.” The plan appears to be to apply the same model that led to Brazil’s successes in other “tropicalized” defense markets.
Although Brazil may be leading the charge, it is not alone. Last year Colombia announced a plan to develop its own unmanned drones for domestic security. This revelation, paired with Colombia’s objective of becoming a net arms exporter, raises the likelihood of Colombian production being tailored to satisfy both domestic and export markets.
Compared with other Latin American countries, Argentina made early inroads in domestic UAS production. 1996 saw the development of the Lipan class unmanned aerial vehicle, the first to be developed by a Latin American nation. More recently, Argentine company Nostromo has started to work on the Yarará series of unmanned aircraft, which it plans to supply to both the military and outside buyers.
Though drone development and production is still a juvenile industry in Latin America, all signs point to its expansion. The utility and market potential of unmanned technology are too great to ignore. This growing technology paired with Latin American nations’ stated objectives of defense market expansion make its proliferations a certainty.
The implications are plentiful and dangerous. The lack of international regulations pertaining to the use of drones, the history of civil liberties and human rights abuses, sensitivities about sovereignty violations, and the likelihood of weaponization pose risks that the region has hardly begun to discuss.
As it stands today, there has been a distinct lack of international and domestic discussion on the rules and regulations pertaining to the use of drones. As it stands, their use is only limited by domestic surveillance laws, air traffic regulation, and expectations of sovereignty, although these often take a back seat to claims of national security. The ambiguity of international regulation and the poor precedent set by unilateral action combined with drone proliferation and availability is creating the potential for dangerous circumstances to arise. Taking into account these factors and the realities of the ongoing drug war, Latin America becomes a region very much at risk to feel the repercussions of a lack of drone policy clarity.
The majority of drones being manufactured today in Latin America are oriented towards intelligence, surveillance, and reconnaissance (ISR). ISR drones have been used for tracking and locating narcotics operations, patrolling borders, and supporting anti-crime operations. They have also raised into question their potential threat to civil liberties. The nature of the Latin American cartel threat calls for domestic surveillance, not only in the hinterland and border regions, but wherever narcotics may be produced, stored, or shipped, opening up the entirety of nations to surveillance. Furthermore, Latin American militaries and police forces have called for drone use in a citizen security context; Brazil plans to use them during the 2014 World Cup and 2016 Olympics. In countries that have suffered numerous illegal wiretap and espionage scandals, domestic drone surveillance begs the question of where the line for privacy should be drawn, to what extent citizen security constitutes a reason to cross it, and who has oversight responsibility.
Much of the contention surrounding UAS is their capacity for armed (kinetic) action, often through targeted missile strikes. Today, only a limited number of drones produced in Latin America are weaponized; manufacturers, however, are actively pursuing these capabilities. Brazil has successfully armed the Falcao, and is expected to have an armed UAS produced under its Harpia program. Latin America can also look to Israel for armed UAS like the Hermes drone. While all Hermes currently operating in the Americas are unarmed, it is an upgradable platform that can operate missile systems.
Armed drones have proven their military utility by allowing for greater mission duration, personnel risk mitigation, and better target acquisition; they have also been responsible for numerous civilian deaths, and violations of sovereignty. Drones are a double-edged sword: with each benefit also come the potential for misuse and abuse. This potential could be exacerbated in a region with a poor human rights record and weak institutions.
Latin America is developing a substantial infrastructure for defense technology. Nations like Brazil, Argentina, and Colombia are establishing themselves both in the region and in the international system as arms exporters.
The risk of this development lies in the destructive nature of the technology being developed. Advanced defense t
echnology is inherently more destructive. There are limited means of forcibly curbing these types of advancement, which are normally managed by the general progression of a society. All that can be done is to remain optimistic that institutional capacity and law will keep pace with the rapid development of the LADI.
Much of the recent expansion of the LADI is a direct result of the industry’s and governments’ disregard for end-user policy; sales come with no strings attached, even for transfer to third countries. Latin American defense export policy essentially allows for unaccountable sales. By not requiring recipients to maintain possession over their purchase, sellers allow other nations to operate as middlemen, avoiding trade tariffs or even potentially transferring arms to “rogue states.”
This method could also allow for the avoidance of certain trade tariffs and more importantly arms embargoes. End-user issues do however appear to be mitigated with the general growth of a country. As a nation expands, it desires to exert greater influence regionally and abroad, increasing its international connections, and requiring greater consideration of actions that have international implications.
One of the more disconcerting implications of the LADI’s expansion is its potential to proliferate advanced weaponry. With every proprietary development in defense technology comes a period where it is almost exclusively operated by its designer. However, as time elapses others are able to produce similar technology-broadening the market. Eventually improvements are made or comparably better technology is developed, reducing the value (militarily/defensively) of the developed technology. This reduction in value transforms the technology into a potentially marketable product with political and monetary value. Advanced technology such as this is in and of itself a form of capital that is used as diplomatic and political leverage.
The rise of the Latin American defense industry, combined with the increased availability of ever-cheaper surveillance technologies and autonomous systems, raises some fundamental questions that Latin American and U.S. governments, analysts, and advocates are not yet asking. What will this mean for civil liberties? What will it mean for warfare and sovereignty, and how will we even know when a threshold of “war” has been crossed? What will happen when non-state actors obtain some of these capabilities? What new limits and accords need to be negotiated? And how can the region learn from the experience of the U.S. defense and drone industries, which themselves have set some dangerous precedents?
Whether as a result of national progress, resource scarcity, or economic ambition, Latin America is developing a substantial infrastructure for defense technology, leading it to a new stage of international importance. Developed nations invest in military infrastructure to both control and mitigate international enforcement. By building upon these industries, nations like Brazil, Argentina, and Colombia are establishing themselves both in the region and in the international system. It is true that with the expansion of military industry come numerous risks and negative potentialities. However , it is important to remember that this expansion is a product of a nation’s development and Latin America is no exception.
The intersection of advanced technology, internal military roles, and institutional capacity in Latin America raises concerns about the protection of civilians and other non-combatants. Whether it is an APC designed for movement through dense jungle, or an attack aircraft specified for drug interdiction, tropicalized technology is not designed and built solely for export; it was designed to operate domestically. As the industry has expanded, technology has become more effective and more deadly. These factors, paired with the prevalent and increasing use of the military in law enforcement, can lead to these technologies’ use against civilians by personnel patrolling cities, manning roadblocks, or controlling crowds.
The intrinsic risk of this development, however, lies in the destructive nature of the technology being developed. Advanced defense technology is inherently more destructive, not necessarily in scale—although it often is—but in terms of efficiency and measurable results. There are limited means of forcibly curbing these types of advancements. Instead, they are managed by the general progression of a society. All that can be done is to remain optimistic that institutional capacity and law will keep pace with the rapid development of the Latin American Military Industrial Complex.
The hemisphere needs to have a series of very serious conversations about these and related questions, at all levels of states, international organizations, and civil societies. We must try and make sense of this now, before events overtake us.