Argentina Defence & Security Report 2014 - New Study Released

From: Fast Market Research, Inc.
Published: Tue Dec 03 2013

Argentina is facing into a period of political transition. President Cristina Fernandez de Kirchner was forced to hand over to her vice president in October due to ill-health, amid mid-term elections and having replaced the heads of all of the country's armed services. However, despite ongoing economic difficulties - such as the costly loss of an international court case over so-called 'vulture funds' - Argentina is proceeding with defence reform and modernisation.

In BMI's view the combination of elections and ill-health could spell the beginning of the end of Fernandez's premiership, which could see her Peronist movement failing to win a third term in office. On the international stage, Fernandez's leadership was characterised by an increasingly fractious relationship with the United Kingdom over the Falkland Islands/Islas Malvinas dispute, and an embarrassing rejection by Spain in late 2013 of suggested 'joint action' against the UK. There could yet be a further increase in tensions as well as additional attempts by Argentina to rally Latin American support for their claim, although at this point a return to hostilities is unlikely.

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In terms of procurement and development, re-nationalised aircraft manufacture FAdeA SA is to supply the Argentine Air Force with 40 of the 'Pampa' aircraft produced by the company. The main use for the new aircraft will be as trainers for pilots, but it there has been action towards developing a light strike version of the plane, the 'Pampa NG'. The first flight of these aircraft was scheduled for December this year.

This has built upon 2012 agreements which were signed between FAdeA, National Institute of Industrial Technology (INTI) and INVAP, in line with the government's bid to support and sustain domestic technological capacity in production. The government reiterated its support for developing the country's indigenous productive ability, arguing that Argentina's national defence could only be ensured by domestic production of military assets.

Argentina has a limited domestic production capacity, so relies on allies such as the US for high-tech imports. However, Argentina recently sign a cooperation agreement with Brazil over 'data-defence' training for military officers, reflecting Latin American suspicions regarding the US sphere of influence.

The Argentine army still faces challenges from an uncertain economy, changes of senior personnel and the transition from conscript force to professional military.

Argentina's defence spending is likely to expand by 4.1% to ARS28.8bn (US$4.65bn) in 2014, marking 0.9% of GDP (in local currency). Although BMI sees defence expenditure expanding to ARS34.48bn (US $4.69bn) by 2021, spending is not likely to keep abreast of economic growth.

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