Brazil thinks it is time to further strengthen and expand its defense industry

The Secretary of Defense Products (Seprod) of the Brazilian Ministry of Defense, Marcos Degaut, said that two strategic actions are needed to promote the local defense industry: more international cooperation agreements and reduced bureaucracy.

He said this during a meeting with representatives of the sector at the Federation of Industries of the State of São Paulo (Fiesp).

The meeting was attended by members of Fiesp’s Defense and Security Department (Deseg) and the National Association of Defense Materials Industries (Simde).

On this occasion, Degaut also presented the results of some actions carried out by Seprod in recent years, as well as the signed international cooperation agreements aimed at the production, development, and joint marketing of defense products.

He stressed, “This means that we have to provide funds to our companies for certain projects without denationalizing them, which we definitely don’t want. We want to maintain the ability to develop technology here in Brazil.”

Degaut also spoke about initiatives to reduce obstacles to the productive sector, such as the publication of several bureaucracy reduction decrees and agreements to eliminate double taxation to attract and promote investment.

AIM AND GROWTH OF THE BRAZILIAN DEFENSE INDUSTRY

Brazil has taken significant steps to promote the expansion of the defense industry. Although Brazil only invested 1.5 percent of its GDP― US$27.9 billion ―towards defense in 2019, the industry has taken on many projects that advance the military’s technological capabilities.

Brazil’s Defense modernization efforts have been boosted with the expansion of international defense cooperation with traditional allies and new partners, the opening of ongoing procurement, and new investment projects totaling more than US$1.8 billion in 2022.

Strategic investment in defense cannot be disregarded, since the capacity to defend itself against interferences of all kinds is a non-negotiable priority for a continental country like Brazil, home to the Amazon Forest, with 16,885km of borders and 7,491km of coastline.

By expanding the defense industry domestically, Brazil seeks to increase defense expenditure and promote more foreign investment into Brazil.

Brazil’s defense industry currently consists of 220 companies and serves around 85 countries worldwide. In 2019, sales abroad totaled US$1.23 billion. Brazil seeks to enhance its military presence in the western hemisphere and worldwide by integrating internationally with foreign corporations.

Brazilian aircraft manufacturer Embraer has overseen the construction of the KC-390, the largest military aircraft to be manufactured in the region.

The Brazilian Air Force is investing in acquiring new fighter aircraft under the F-X2 program, which will allow for the delivery of 36 Gripen E/F fighter jets developed by Swedish company Saab by 2024.

The deal involves significant investment in the local industry, such as a new Saab Aerostructures plant in Brazil and the involvement of Embraer, a Brazilian aerospace company, in assembling no less than 15 of these new fighter jets with state-of-the-art features and technology.

Brazil maintains the most capable navy in Latin America and is currently investing in conventionally powered attack submarines and a nuclear-powered submarine. It is also building four new frigates in cooperation with German company ThyssenKrupp Marine Systems.

The Brazilian Space Program has gained much attention since the Alcântara Agreement on Technology Safeguards was signed in 2019. Virgin Orbit is working with the Air Force to start Brazil’s first orbital launches at Alcântara Space Center within that agreement.

Finally, the Brazilian Army is investing in its Integrated Border Monitoring System (SISFRON) to increase the capacity to monitor border areas and ensure the continuous and safe flow of data between different levels of the Brazilian Armed Forces.

In addition to direct financial strategizing, Brazil has also used its defense industry to deepen diplomatic ties.

The primary international player in the development of Brazil’s defense industry is the United States. In March 2020, the United States and Brazil signed an agreement giving Brazil access to defense financing, declaring Brazil a primary non-NATO ally.

The two countries formalized an agreement known as the Research, Development, Test, and Evaluation (RTD&E), which would potentially allow Brazil to pursue defense projects with access to the US Defense Department’s budget. Through this agreement, Brazil could use American companies as a vehicle for the exchange of intellectual property and defense technology.

Although recent moves by the Bolsonaro and Trump administrations seem to indicate increased US interest in Brazil’s defense sector, the US-Brazil defense relationship dates back several years before the Trump era.