Brazil looks to defense industry for economic boost

Rio de Janeiro — The government hopes that President Jair Bolsonaro ‘s push for the modernization and re-equipping of the armed forces will bolster the defense industry and help Brazil’s economy recover.

The new policy was announced by the vice president, reserve army Gen. Hamilton Mourao, as well as by the defense minister, Gen. Fernando Azevedo e Silva, during the opening ceremony of the new edition of LAAD Defense & Security, the biggest defense industry expo in Latin America, being held in Rio de Janeiro.

In an address to delegations from 80 countries, including a score of defense ministers, both officials emphasized the importance of the defense industry, which accounts for 4 percent of the gross domestic product (GDP) of South America’s largest economy.

The deals and contacts emerging from LAAD provide “an exceptional opportunity for the expansion of many sectors of the national defense industry,” Mourao said.

Azevedo e Silva, for his part, said the defense industry, which has annual revenues of about 200 billion reais ($52.63 billion), was essential not only for maintaining national defense capabilities but also for boosting the economy.

The defense minister said the industry employed about 60,000 people directly and 240,000 others indirectly.

“The more daring the goals achieved by the defense industry, the more the sector can help the country resume growing,” the minister said, noting that Brazil’s economy has been growing slowly since the deep 2015-2016 recession.

The generals said that, among other projects to modernize the military, Brazil was committed to building five submarines, including a nuclear one, and that the government signed a contract on Tuesday for five corvettes and plans to open the bidding for a new vessel.

The submarines, the first of which was launched in December, are being built under a cooperation agreement with France signed in 2009 by then-President Luiz Inacio Lula da Silva .

Azevedo e Silva discussed the army’s project for the next generation of the Guarani military vehicle and a border defense system with state-of-the-art radar, satellites and sensors.

The air force is working Embraer to develop the military KC-390 cargo plane, the defense minister said.

He also said that the technological safeguards agreement that Bolsonaro signed during his visit last week to the United States would allow companies from several countries the full use of Brazil’s space launch center in Alcantara.

Among the Brazilian exhibitors at the LAAD expo are Embraer, the third-largest aircraft manufacturer in the world; Avibras, a producer of weapons, armor and ammunition; and Helibras, a helicopter manufacturer.

Lockheed Martin , Boeing, Airbus, Thales Group and Saab are among the foreign defense contractors with a presence at the fair.