- Language: English
- Published: August 2013
- Region: Brazil
Brazil Defence and Security Report Q1 2012
- Published: November 2011
- Region: Brazil
- 94 Pages
- Business Monitor International
Business Monitor International's Brazil Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's defence and security industry.
The past quarter has been a significant one for Brazil’s defence and security sector. Eager to make her mark having only come to power at the start of the year, Brazilian President Dilma Rousseff has made two significant moves since our last quarterly update. First she replaced defence minister Nelson Jobim with former foreign minister Celso Amorim, after the former made remarks about other ministers. Jobim reportedly called one minister a ‘weakling’ and others ‘idiots’. Rousseff had earlier overruled Jobim on a contract estimated to be worth billions of dollars to acquire fighter jets. Second she passed a bill exempting defence companies from taxes for five years. The measure is geared to prop the defence industry and reduce the share of imported equipment for the armed forces. She said the tax breaks will not only boost the defence industry, but also help create a trade surplus in the sector for Brazil. Amorim said that the tax exemption will increase the armed forces’ ability to protect Brazil’s resources.
On an international level, Rousseff appears eager to be very much her own leader too. Over the past three months, the President has highlighted that she believes that the structure of the United Nations Security Council, which is currently composed of 15 members, has to be expanded. She has also reiterated Brazil’s desire to become a permanent member of the Security Council.
BMI notes that recent developments in the defence and security sector have been made against the backdrop of growing tensions between Brazilian authorities and the military over the past nine months. At the start of 2011 the Brazilian government were going to considerably cut the defence spending, which infuriated the military.
Brazilian defence officials said that at the beginning of the year there was such a need to find extra funds to liquidate the consequences of natural disasters. However, that threat has since faded and as such Brazil’s defence spending in 2012 is set to increase by 19% to US$34.09bn according to our forecasts, which would help Brazil enter the top 10 of the countries with largest defence budgets.
Brazil’s defence and security, of course, still has one eye firmly on upcoming domestic events. During the next few years Brazil is projected to spend more than US$1bn on all aspects of public security as it prepares to host many very important international events, including the FIFA World Cup to be held across 12 cities in 2014 and the Summer Olympic Games in Rio de Janeiro in 2016. Security expenditures are likely to include training, risk assessment consulting, and surveillance devices for all levels of the military, police, and events security.
In advance of the upcoming events, the government is actively working to improve security in the favelas in Rio de Janeiro which, according to the municipal government, are home to 1mn out of Rio’s population of 6mn. Headlines in the mainstream media highlight that the authorities are using three measures to end the control of the favelas by rival drug gangs. Police and troops have undertaken military-style occupations of favelas, in some instances, with blood being shed.
More generally, though, the police continue the policy of using a permanent presence in the favelas, through Police Pacification Units (or UPPs, to give them their Portuguese acronym): these are police stations actually constructed in the shantytowns. A more interesting development is the construction in Rio’s Complexo de Alamão favela of a cable car network that gives residents much greater access to the city’s public transport system and jobs.
Most of the deals announced in the defence and security industry in Brazil over the past quarter have served to underline and reiterate the key themes on the sector, however, BMI notes the significance of one deal in particular. On October 10, Brazil’s biggest defence firm Embraer received a firm order for 13 Legacy 650 Jets from China’s Minsheng Financial Leasing. The first aircraft is expected to be delivered by the end of this year, with the remainder to be delivered within the next five years.
Back in July 2011, the two parties signed a Memorandum of Understanding for the purchase of up to 20 aircraft. In BMI's view, the deal serves to underline the strengthening ties between the two nations as they – as well as other emerging countries – actively build relationships with one another in an effort to counterbalance the influence of the US-led West. What is more as it rises, Brazil is likely to exert greater influence in the region, similar to the manner in which China is doing in Asia. SHOW LESS READ MORE >
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