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Russian Arms Merchant raps on Latin America’s Door


Council On Hemispheric Affairs
MONITORING POLITICAL, ECONOMIC AND DIPLOMATIC
ISSUES AFFECTING THE WESTERN HEMISPHERE
Tuesday, March 20th, 2007
Brazil, Mexico, Venezuela, Chile, Cuba, Peru, Colombia, Reports, Front Page

The Russian Arms Merchant raps on Latin America’s Door


• Foundation established for Russian arms sales surge to region
• Moscow’s military sales likely to surpass within the next several years the USSR’s high water marks
• U.S. is being pushed out of market it once dominated
• New status quo likely to last for years, as economy of scale and ongoing maintance of equipment likely to preserve bond

In recent years, the Russian Federation has become one of the major weapons suppliers to Latin America. This has satisfied two of Moscow’s major goals: greater profits and economy of scale for its weapons industry and the continued amplification of its presence in the region. While this does not signify that any aspiration for a return of a Soviet-style Cold War-era sphere of influence is in the offing, it is important to understand the actual depth of Russia’s burgeoning presence and the range of influence being exercised by it within the region’s military establishments. Moscow’s developing bilateral security relations with Latin American governments have become a matter of some concern for Washington.

Venezuela
The Russia-Venezuela arms trade has generated, by far, the most international attention. In 2006, Venezuela startled the world by announcing a significant weapons purchase from Moscow: 100,000 Kalishnikov assault rifles, 24 Sukhoi (SU-30) fighter jets, and 53 military helicopters. The eventual price tag on the unfolding deal came close to $3 billion. The aircraft already have begun to be delivered to Venezuela, with the first two arriving on December 8 2006, at the Lieutenant Luis del Valle Garcia Air Base.

Another component increasingly tying Caracas and Moscow together is the continuous flow of military personnel, such as pilots and technicians, flying in both directions to provide and receive training. Venezuelan pilots already are receiving flight instructions from Russian teachers, while Russian technicians have traveled to Venezuela to instruct local mechanics on how to maintain the newly purchased and relatively sophisticated Russian equipment. Also, plans are being laid out to construct a factory capable of the mass production of the Russian AK automatic rifles in Maracay, Venezuela’s Aragua State. It is expected that the facility will be operational by 2010, producing as many as 50,000 units per year.

There are numerous reports that Venezuela will also buy an indeterminate number of Antonov model 76 transport planes (which will replace the US-made C-130s), as well as three Amur-class submarines. The number of transport aircraft that Venezuela might purchase has not been specified, however sources close to the deal speak of a “large consignment.”

The most recent Venezuelan acquisitions occurred early this year when it was announced that Caracas would buy ten to 12 TOR-M1 anti-aircraft defense missilie system from Moscow. The BBC reprinted an article by the Caracas’ daily El Nacional where it quotes a retired member of Venezuela’s Presidential General Staff, General Alberto Muller Rojas, as saying: “I do not know if there will be more, but 12 is too few; in any case, there will be 12 batteries. To prevent an air attack, more missiles are needed.” Such a statement coming from someone who is known to be very close to President Hugo Chávez fortifies the likelihood of a higher volume of military purchases with Moscow appearing more than willing to oblige. In addition, Muller Rojas’ intriguing statement poses the question of exactly who might attempt to carry out such an air assault against Venezuela.

Argentina
Last October, Argentine Defense Minister Nilda Garre met with Russian deputy prime minister Sergey Ivanov – who also served until recently as defense minister – when the former handed Ivanov a list of equipment that Argentina might be interested in acquiring. The Russian ITAR-TASS news agency has quoted Garre as saying, “apart from helicopters and air-defense systems, Argentina is most interested in air-traffic-control equipment.” It is unclear exactly what type of technology was on Garre’s wish list. After the meeting, minister Ivanov said that Argentine officials gave him a list of weaponry they would like to buy from Russia. However, in a press release that was later distributed in Buenos Aires, Garre stated that Argentina was possibly less interested in purchasing weaponry than buying four 3D radar systems to monitor air traffic entering the country’s airspace. The Ivanov-Garre meeting came after a compelling presentation by the Russian arms export company Rosoboronexport at the influential Sinprode-2006 exhibition in Buenos Aires.

As Buenos Aires regains its financial strength after the meltdown that started at the beginning of the decade, its desire to strengthen its arm forces by purchasing military equipment has resurfaced once again. For years, Argentina has vocalized its interest in purchasing new patrol boats and helicopters, though these efforts were repeatedly deferred as a result of the devastating effects of the 2001 economic crisis. Rosoboronexport’s recent display of its product-line in Argentina proved to local military officials that the Russian firm is in a position to provide a wide range of equipment that the nation’s armed forces covet: T-90SK tanks, BTR-80A and BTR-90 armored transporters, the Iskander-E missile system, Sukhoi fighters, the Mi-171Sh, Mi-17V-5, Mi-35M, Ka-27PS and Ka-3 helicopter models. The package of possible purchase orders also included Murena-E patrol boats and batteries of anti-aircraft missile systems.

It is certain that there will be much concern in Washington over any deals between Moscow and Buenos Aires regarding military sales. On that subject, Garre has declared that: “Buenos Aires is not afraid of a negative reaction from the USA regarding possible purchases of Russian armaments […] I believe that purchasing arms is the sovereign right of every country, and this cannot displease anyone.”

Peru
Since the General Juan Velasco Alvarado military government (1968-75), Peru has looked to Russia for military technology. Under his government, Velasco upgraded the country’s military for one, if unstated, main reason: an eventual war with its longtime nemesis Chile. After hard bargaining with Washington, Velasco purchased a broad range of Soviet weaponry, particularly heavy armor and jet fighters. During the recent Alejandro Toledo and the current Alan García administrations, Peru’s top military and political leaders have continued to look upon Russia as their traditional source for weaponry. Moscow also has been interested in preserving this relationship, in fact, even trying to enhance it. Last November, Latin American department director at the Russian foreign ministry, Alexander Dogadin, toured a number of Latin American nations, including Peru, where he declared that: “Peru is our traditional regional partner, and we are broadening bilateral relations in various spheres.” In 2005, Lima and Moscow signed a deal to upgrade the country’s aging Mi-8 and Mi-17 helicopter fleet. Rosoboroneksport has agreed to repair the country’s 13 helicopters at a total cost of $18 million. That year also saw the signing of a deal in which Lima agreed to purchase five Mi-35M armored helicopters and five Antonov An-32/Cline transport aircraft, worth a total of $140 million. The delivery terms are still unclear.

Brazil
During their meeting last December in Brasilia between Russian foreign minister Sergei Lavrov and his Brazilian counterpart, Celso Amorim, prospects for a major weapons purchase were discussed. The Brazilian media has reported that the final deal would consist of 30 Russian military attack and transport helicopters, worth about $400 million, which would be consigned by Brasilia to fight smuggling and drug trafficking. However, it remains uncertain if this purchase will ever take place, as negotiations are still going on.

Cuba
In an interesting development, Agence France Presse has reported that Cuba’s interim leader, Raul Castro (who also has headed the country’s armed forces for decades), signed a military technical cooperation deal with Russia in 2006. Given Fidel Castro’s fragile health, the fact that his likely successor is already playing a role, albeit a relatively small one, to renew Cuba’s traditionally strong ties with Russia, might be a preview of what the country’s military policy would be like under Raul Castro.

A provocative statement of a renewed Havana-Moscow defense relationship was articulate by Viktor Baranets’ “Doctrine Moved Up to the Front” published in the March 7 2007 issue of Komsomolskaya Pravda newspaper. Regarding the proposed missile defense shield Washington plans to build, with bases throughout Central and Eastern Europe, Baranets argued: “How much clearer it would be to both Russians and Americans and to all of NATO if we adopted a symmetrical response that was very easy to understand - say, by deploying our own missile-attack early-warning stations or space-based missile defence systems on the territory of friendly countries like Cuba or Venezuela.” It seems only logical to conclude that that Cuban military purchases will soon take place.

Colombia
In 2001, Colombia purchased six Russian attack helicopters, type Mi-17 IV version, which were delivered the following year. The deal was worth $36 million. According to reports, all six helicopters were equipped with night vision devices. A spokesman for Rosoboroneksport, Boris Alekseyev, declared at the time of the sale, that the helicopters “ideally meet the needs of the Colombian army, as they are two times cheaper than their American counterparts, they can effectively act in mountain conditions and rapidly move whole army units.” In spite of the special ties that Colombia has with the U.S., Bogotá seems to have no problem purchasing weapons and filling Moscow’s coffers with some of the nearly one billion dollars it is likely to have received from the U.S. by the end of this year.

Mexico
Mexico has carried out a small but interesting military arm purchasing program. Between 1999 and 2000, Mexico City bought two An-32/Cline transport aircraft and two Mi-25 attack military helicopters, according to the Stockholm International Peace Research Institute (SIPRI). In 2002, the Mexican navy purchased Dzhigit launchers and portable Igla/SA-18 Grousse anti-aircraft missiles. According to SIPRI, this last deal was worth $2.1 million for 30 missiles and 5 launchers. At the time, the Russian news agency ITAR-TASS quoted Julio Cesar Lizarraga, a member of the Mexican lower house and also of its navy commission, saying that the purchase “will double the navy’s ability” to protect offshore oil deposits in Campeche Sound against possible a terrorist attack. Purchases continued in 2004 and 2005, when the Mexican military bought around 100 Russian-made Ural heavy off-road vehicles.

On November 2006 ITAR-TASS also reported the opening of a training centre for pilots of Mi-17 helicopters equipped with a unique Russian-made simulator last. The facility is situated at a naval base in the state of Veracruz. Mexican Secretary of the Navy Admiral Marco Antonio Peyrot Gonzalez headed the high-level delegation attending the opening ceremony. Furthermore, under the terms of a Mexico City-Moscow, Russian specialists will routinely travel to Mexico to provide maintenance services to around 80 Mi-17 helicopters.

The Latin American Military Balance
During his trip to Brazil, Lavrov huffily declared to an audience of distinguished citizens that “We are not selling [weapons] to any country that violates international laws.” Meanwhile, General Raul Isaias Baduel, Venezuela’s defense minister, has justified his government’s purchases, explaining “all our acquisitions are strictly for defense.” While this statement may be true, it cannot be denied that at a certain point Moscow’s military sales may have gradually altered the geo-security landscape of much of the Americas. These results are not likely to please Washington policymakers.

Long time foes Peru and Chile periodically accuse each other of embarking on a unilateral arms race that threatens the other’s national security. Lima’s upgrading of its helicopter fleet has raised eyes in Santiago, particularly as it comes at the same time as the purchase of a number of Lupo-class Italian frigates. Concerns have been expressed in Brazil, as expressed in an August 2006 article in the Brazilian newspaper Correio Braziliense, which was reproduced by the BBC. The article details that Brazil recently made an order for 12 Mirage 2000 aircrafts (with 15 to 20 years of service in the Armée de l’Air, the French air force). The asking price was $100 million; however, the resulting economic savings have been cancelled out by certain political and security sacrifices, in which Brazil lost out to Chile and Venezuela in terms of maintaining absolute air supremacy. Felipe Salles, editor of the electronic magazine Base Militar and a defense expert, was quoted in the Correio article as observing that: “the United States is always reluctant to sell advanced weapons, like BVR (Beyond Visual Range) missiles and laser-guided bombs, on our continent. Probably, the Russians will have no reservations.” This was in reference to Chile and Venezuela’s jet fighter purchases, and Santiago buying F-16 planes, with Caracas being already blocked by Washington from acquiring spare parts for its existing feet of F-l6s, resulting in the purchase of the Sukhois.

Finally, Caracas’ military purchases have raised wary eyes in both Washington and Bogotá. While it is ludicrous to believe that Venezuela may pose a security threat to the U.S., the South American country’s defense policy is being constantly characterized as a destabilizing factor in the region. Historically, relations between Colombia and Venezuela have gone through recurrent periods of tension; an example of this was both countries almost went to war in 1987, the Jaime Lusinchi government claimed that a Colombian warship had, without permission, penetrated Venezuelan territorial waters. Such tensions have been further exacerbated during the Chávez-era after at least, on one occasion, the Venezuelan leader declared himself to be sympathetic to the cause of Colombia’s leftist guerrillas, while Bogotá accused Venezuela of being used as an R+R facility for them. The major de-stabilizing effect between Bogotá-Caracas relations could very well be, a result of the construction of the Kalishnikov factory in Venezuela. Colombia and Washington are bound to be apprehensive that some of the rifles that will be produced in this new installation may ultimately find their way to the Colombian rebel groups like FARC and ELN.

Interestingly, in spite of critics pointing to an arms’ buildup among the region’s militaries, this has not been the case so far. Aside from the short-lived, non-declared spats between Peru and Ecuador in 1995, there have been no major inter-state flare ups in the region. Some experts have even minimized the legitimacy of any U.S. concern over Venezuela’s weapons purchases, dismissing it as simply a normal transaction which lacks any provocative connotations. Retired general Alberto Miller told Inter Press Service in a 2005 interview that “it would be ridiculous for the world’s major powers, which routinely spend huge sums on defence, to classify as an ‘arms race’ the purchase of 100,000 rifles or 40 helicopters for a country that, like Venezuela, [that] has a difficult border of over 2,200 kms to guard on its western frontier alone.”

Cash to the Kremlin
Mounting weapon sales to the region in recent years have increased Moscow’s foreign currency earnings. In a March 1997 interview published in Nezavisimaya Gazeta, Boris Kuzyka, Assistant to the Russian President on Military-Technical Co-operation with Foreign Countries, explained that hard-currency returns from military-technical co-operation have doubled: from $1.7 billion in 1994 to $3.4 billion in 1996. The Russian official went on to mention that the regions most promising for Russian Arms exports were the Middle East, South East Asia and Latin America.

The continuous export to regions like those Kuzyka mentioned helped Russia tie the U.S. as the world’s top arms exporter between 2001 and 2005, harnessing around 30 percent of the global market, according to a report by SIPRI’s Arms Transfer database. President Putin has declared, according to Agence France Presse (AFP), that Russia had sold arms to 61 countries around the world in 2005, resulting in six billion dollars in signed contracts that year –a post-Soviet record. AFP also cites Pavel Felgenhauer, a Russian defense expert, saying that while Russia had become the biggest arms exporter in the world in terms of volume, it still lagged behind the United States in terms of the “actual money” earned and the total value of contracts signed but for later delivery. Nonetheless, said Felgenhauer, “Russia is still far from returning to Soviet-era export levels, which were ten times higher.” This point of view is shared by Vladimir Pakhomov, deputy director-general of Rosoboroneksport has said that “At the moment, Russia’s share in arms exports to Latin America is not sufficient.”

The Venezuela arms deal, among others, is slowly but steadily bringing the volume of the Latin American arms trade to pre-1991 levels for Moscow. In fact, Russia already has surpassed the U.S. in arm sales to the Third World, with France coming in third. According to a November 2006 CanWest News Service story by Steven Edwards, a U.S. Congressional report says Russia’s US$7 billion in arms and ammunitions deals with developing countries accounted for almost 25 percent of the US$30 billion in its total 2005 contracts. France inked agreements to supply US$6.3 billion and the United States came in with US$6.18 billion, while China registered US$2.1 billion in such sales. More information can be supplied by the Congressional Research Service’s Report entitled: “Conventional Arms Transfers to Developing Nations, 1998-2005” published last October. The report notes that Moscow exported $300 million worth of arms to Latin America between 1998-2001, and $600 million between 2002-2005. The likely exponentially growing Venezuelan arms procurements should vault past all such barriers on such sales.

It is very likely that the growing of Russian weapon sales to Latin America will continue over the coming years. President Putin has shown himself as a big supporter of these sales in order to expand Russian influence abroad. As reported by the International Herald Tribune, Russian customs figures show Russian arms exports - of which Rosoboronexport controls 90 percent of the market - have grown by almost 70 percent since Putin established the agency in 2000. In addition, nations like Cuba and Venezuela have few other sources for military equipment, due to their strained relations with the U.S., making Russia their natural weapon supplier, given that the U.S. has veto rights over the sale of any weaponry containing U.S. components.

Prophecies that Come True
In April 2005, Aleksandr Fomin, the deputy director of the Russian Federal Service for Military and Technical Cooperation, declared: “There are good prospects for boosting our military-technical cooperation with Latin American states […] We can offer Latin American states not just arms and military equipment, but also military technologies, cooperation in developing and manufacturing arms and licenses to produce Russian equipment.” Fomin was speaking almost prophetically, as Russia’s presence in the arms trade, particularly as it regards Latin America, which has boomed ever since.

*************

This analysis was prepared by COHA Research Fellow Alex Sánchez
March 20th, 2007
Word Count: 3000

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 223-4975, fax (202) 223-4979, or email coha@coha.org.

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