Crime and Internal Strife Drive Military Spending in Latin America

NEWTOWN, Conn., April 05, 2017 -- In a market analysis, Forecast International finds that crime and internal strife are the main drivers of military spending in Latin America.

In the study, author William Ostrove points out that "few Latin American countries face serious external security threats" other than sporadic border disputes. On the other hand, criminal activity and internal strife pose continuing problems for governments in the region.

Ostrove says that Central American countries are facing a period of internal instability. "Many former soldiers and guerrillas from the civil wars of the 1980s have turned to a life of crime," he explains.  "Add to that the fact that the region is awash in cheap automatic weapons left over from those wars." The situation has forced governments to deploy the military to support police.

Drug trafficking is another major issue faced by Latin American governments, particularly Mexico, Colombia, Bolivia, and Peru. Other countries like Costa Rica and the Dominican Republic have also increased military spending to counter the traffickers who use their territory to transport contraband between South America and the United States. Even successful counter-drug operations have had a negative side:  As old transport routes are squeezed, traffickers seek to create new "pipelines," spreading into Argentina, Ecuador, and Brazil.

Continuing activity by guerilla groups has also been a problem in the region, especially in Colombia. According to Ostrove, despite ongoing peace negotiations, "the country still has a long way to go.  Colombia now must deal with other guerilla groups, such as the ELN, who have stepped into FARC’s place."

Despite the need to confront these threats, Latin American governments have not been able to provide their militaries with consistent funding. The study points out that "the primary obstacle to defense spending in most Latin American countries continues to be a cycle of economic advances and declines, making it hard for governments to provide a steady flow of funding for their militaries." Brazil's latest economic crisis illustrates that point.

Still, defense spending will continue in the region, with priorities based on the countries' internal situations. Given their insurgency and counter-narcotics concerns, many Latin American countries are interested in weaponry that can be employed in counterinsurgency, low-intensity conflict.  Paramilitary equipment – small arms, helicopters, patrol boats, armored vehicles, trucks, and communications equipment – is of primary interest, rather than larger systems intended more for conventional conflict, such as fighter aircraft, tanks, or large naval vessels.

Forecast International expects defense spending in Latin America to increase at an annual rate of about 5.3 percent between 2017 and 2021.  Total defense spending in the region will increase from $61.3 billion in 2017 to $79.5 billion in 2021.  During this same five-year period, defense spending in the region will total $350.3 billion. 

About Forecast International

Forecast International, Inc. is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems, and military electronics. The firm, which publishes eight International Military Market services, also maintains a high posture of situational awareness and geopolitical analysis. Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. Forecast International's resources and extensive base of experience can also be readily adapted and efficiently focused to fulfill a broad spectrum of civil and military consulting and special research requirements.

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Ray Peterson
Forecast International
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