Latin American Defence Procurement Pushing Ahead Despite Global Recession, Says Frost & Sullivan

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Latin American Defence Procurement Pushing

Ahead Despite Global Recession, Says Frost &

Sullivan

PR Newswire

BUENOS AIRES, Argentina, June 25, 2012

- Acute modernisation needs to drive defence markets in Brazil, Chile,

Colombia and Peru

BUENOS AIRES, Argentina

,

June 25, 2012

/PRNewswire/ --

Brazil

continues to

lead the way in Latin American defence expenditure. Upcoming and ongoing

programmes means that Brazilian budgets over the next decade will be higher

than those of the next five biggest Latin American spenders combined. Overall

budgets can be deceptive though, as new procurements are limited by high

personnel and maintenance requirements.

New analysis from Frost & Sullivan (http://www.aerospace.frost.com),

Revenue

Opportunities and Stakeholder Mapping in the Latin American Defence

Market

, estimates that the cumulative defence expenditure on new equipment

procurement in

Brazil

,

Chile

,

Colombia

, and

Peru

will amount to

$69.1 billion

between 2011 and 2020. The majority of these procurements will be in

Brazil

.

If you are interested in more information on this study, please send an e-mail to

Francesca Valente, Corporate Communications, at

[e-mail] with your full name, company name, title,

telephone number, company email address, company Web site, city, state and

country.

"While a lack of big-ticket programmes in smaller countries does not

necessarily entail a lack of opportunity for defence companies, Western

manufacturers willing to export may be disappointed by challenging markets,"

noted Frost & Sullivan Industry Analyst Chiara Ball. "However, significant

opportunities exist, especially for those willing to help governments' further

industrial development by creating domestic or regional bases."

Latin American countries' stocks currently comprise a lot of Cold War and even

WWII-era platforms. Long overdue modernisation drives are now being pushed

by governments, and the global recession's comparatively light touch on the

region is helping them to do so.

"Some countries' defence forces are struggling with internal security

problems," added Ball. "The need to modernise is acute, and is the main driver

of defence procurement in the region."

In many countries, decades of economic fragility and instability coincided with

transitions to democracy following military dictatorships. The economic and

cultural result of this was institutionalised neglect of military capabilities, which

is now changing.

However, despite the overall economic growth of many of these countries,

overall budgets are still too small to match the overwhelming requirements.

"Many Latin American countries are consistently forced to prioritise their most

immediate and often very basic requirements," remarked Ball. "Due to the

inability of many Ministries of Defence to create comprehensive long-term

procurement plans, forces continue to be strained to their operational limits."