Latin America Leads World in Boosting Defense Expenditures, Study Says

Latin America Leads World in Boosting Defense Expenditures, Study Says

By Dialogo
June 10, 2011



BUENOS AIRES — Latin America’s military expenditures rose by 5.8 percent to $63.3 billion last year, a higher increase than any other region of the world, according to a study released in April 2011 by the Stockholm International Peace Research Institute (SIPRI).
Most of the rise in Latin military expenditures can be attributed to regional prosperity, with economic growth averaging 6 percent in 2010, says the report, noting that high commodity prices and increased Asian demand for the region’s products have fueled economic expansion and filled government coffers in recent years.
Despite the upturn, Latin America still spends vastly less than North America, Europe and Asia. It was also outpaced by the Middle East, which spent $111 billion last year, but it surpassed Africa’s $30 billion in military expenditures.
Any concerns about a Latin American arms race, however, are vehemently dismissed by regional specialists.
“This notion is simplistic thinking, as each country must invest in defense according to its particular needs,” said Col. Arturo Contreras, a professor of international relations at the University of Chile’s Institute of International Studies in Santiago.
“We don’t get caught up with the idea that there is an arms race in the region,” said Leonardo Pablo Hekimian, professor at Argentina’s Catholic University and a member of the Buenos Aires-based Red de Seguridad y Defensa de América Latina (REDSAL), a professional network of security specialists.
“Each country is at a different moment in its military modernization process,” Hekimian said. “Today Argentina doesn’t have a high military spend, but if it decides to increase spending in the next few years, the aim would be to modernize obsolete equipment.”
The SIPRI report says strategic factors spurring increased spending include Brazil’s efforts to boost its international prestige and defend its natural resources, Mexico’s continuing war on narcotraffickers and Peru’s battle to extinguish the revived Shining Path terrorist group.
Despite a buying spree that saw Venezuelan President Hugo Chávez spend $4.4 billion in weapons between 2003 and 2006, the oil-rich country did not contribute much to Latin America’s regional increase in 2010. Last year, its defense budget dropped by 27.3 percent and is now slightly smaller than it was in 2001 in real terms, though Chávez continues to buy arms – largely funded by loans from Venezuela’s principal supplier, Russia. SIPRI says the cost of these purchases may not appear in published budget figures.
Carina Solmirano, a researcher at SIPRI, said that for the second consecutive year, Venezuela saw a reduction of military spending, and that the drop is associated with the country’s negative economic growth. While all other South American economies expanded during 2010, Venezuela’s contracted.
However, she told Inter Press Service, it’s too soon to say if the decrease in military expenditures will continue in the future. “Depending on how Venezuela’s economy performs in the next few years, we may witness new increases. But again, it’s very hard to predict.”
Within the region, Brazil led the pack in spending, with $33.5 billion in 2010 military expenditures. That made it the only Latin American country among the world’s top 15 highest spenders in 2010, according to SIPRI, and put it in 11th place — behind Italy and ahead of South Korea. Yet this is equivalent to only 2.1 percent of global military expenditures.
The Peruvian government boosted military expenditures by 16 percent to $2.15 billion last year, justifying that increase on the resurgence of the Shining Path. In Mexico, military spending has jumped 44 percent since President Felipe Calderón took office in 2006 to an unprecedented $5 billion. Most of that increase is in response to the government’s escalating fight against powerful Mexican drug cartels, says the report.
SIPRI figures show that between 2006 and 2010, Chile was Latin America’s largest arms importer. This enormous purchasing power is a result of the country’s generous Copper Law. As written, this law — dating back to the Pinochet regime — makes 10 percent of the revenues of state-owned copper conglomerate Codelco available to the armed forces for equipment purchases and maintenance. The combination of high copper prices and strong Asian demand boosted Codelco’s revenues to $16 billion last year, putting the Chilean military in a very comfortable buying position.
President Sebastian Piñera, however, has just sent to Chile’s Congress a bill that would allow Congress to set the military’s multi-year budget in accordance with Chile’s defense strategy and needs. A contingency fund also would be set up to cover unforeseeable costs associated with earthquakes and other natural disasters.
“What’s important is that the armed forces receive the necessary resources,” Contreras said.. “It’s kind of like deciding to stop payment on an insurance plan. It’s risky and we may pay a price down the line.”
Argentina increased spending by 6.6 percent to $2.3 billion last year, although according to SIPRI the biggest factor for that jump was retirement payments and personnel expenses associated with rampant inflation. Despite nearly a decade of strong GDP growth, increasing military spending has not been on the Argentine government’s agenda. The report attributes this partly to the lack of reconciliation between the armed forces and the ruling political party of President Cristina Fernández de Kirchner and her late husband, Néstor Kirchner.
Nonetheless, Argentina remains active in the regional defense sphere through UNASUR, the Union of South American Nations. Argentina, along with Chile, is responsible for the UNASUR task force responsible for promoting transparency of regional military spending and defense strategies.
In line with this strategy, Unasur delegates met in Buenos Aires on May 26 to inaugurate the UNASUR Center for Strategic Defense Studies (Centro de Estudios Estratégicos para la Defensa, or CEED) to help harmonize strategic decisions taken by UNASUR’s South American Defense Council (Consejo Suramericano de Defensa).
“CEED will allow for a shift from a conflict hypothesis to a confluence and cooperation hypothesis,” the center’s director, Alfredo Forti, recently told local press.
“Increasing transparency will also help to neutralize concerns of an arms race in the region,” Hekimian explained. But when asked about the importance of CEED, Contreras said: “I’m skeptical about the creation of so many organizations. While multilateral endeavours like this may help build confidence between regional governments, one must measure the cost of diverting the armed forces’ attention from their strategic initiatives to participate in these fora.”
Some argue that the increase in defense spending is paradoxical given the lack of military threats, and the abundance of urgent social needs faced by most Latin American nations.
When put into context, however, military spending is still relatively tiny considering the populations, economies and geographical sizes of the countries involved. Brazil, for example, spent only $140 per inhabitant last year on defense, according to 2009 SIPRI data. On a per-capita basis, that spending was exceeded by Chile ($335) and Colombia ($220). The more likely hypothesis is that the region’s governments are simply taking advantage of good economic times to modernize their armed forces and prepare for today’s more complex security challenges.
A little bit more rigor please, they are not soldiers, they are policemen, they are the “Carabineros de Chile”, which is the street police, and they have a constitutional obligation over the security of the “Palacio de la Moneda”. On the other hand, the personal security guard of the President is made up of officials from the Police of Investigations of Chile (PDI), also named “Civil Police” because they do not used uniform.
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