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South America

The Unfriendly Scramble for Everywhere: Investment’s Role in Foreign Policy

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NAFAC Week 

By Phillip Bass

Because wars between great powers are no longer frequent, many great powers use indirect action and soft power to push foreign policy objectives.1 Joseph S. Nye Jr. describes soft power as the ability of a state to persuade another state to do what it wants without force or coercion. Soft power can come in the form of diplomatic pressure, trade relations, investment, and loans.2 The People’s Republic of China has been using soft power in Africa, Southeast Asia, and Latin America (LA) to fulfill foreign policy objectives. Chinese soft power in LA is a potential challenge to the United States’ hemispheric dominance.3 The Monroe Doctrine and the Roosevelt Corollary showed the United States was willing to use hard power to keep great powers out of LA.4 The United States’ dominance could be challenged if Chinese investment influences LA foreign policy.5 China has used soft power to pursue its foreign policy objectives in LA to delegitimize the Republic of China (Taiwan), access LA raw resources, and provide an alternative to American investment. These moves have made China vulnerable to events in Latin America. Investment changes a state’s foreign policy if the state is the investor, or if invested states have more to gain than by pursuing an alternative avenue.

Chinese investment in LA has increased from $15 billion in 2000 to $268.7 billion in 2013.6 China has invested $116.4 billion into Brazil, Venezuela, and Ecuador from 2007 to 2016.7 China gave Venezuela $60 billion worth of loans to help the country prior through 2015.8 China formed the China-CELAC Forum to promote economic relations between China and LA.9 At its first meeting in January 2015, Chinese President, Xi Jinping pledged China would invest $500 billion into LA by 2019.10 China has signed free trade agreements with Chile, Peru, and Costa Rica.11 China is one of the top five export destinations for Argentina, Cuba, and Peru. Additionally, China is Brazil and Chile’s largest trading partner. China is also one of the top five importers for Colombia, Mexico, and Uruguay.12  With Chinese interests investing large amounts of funds and trade into LA, it is important to see if investment changes states’ foreign policy.

Chinese soft power has put pressure on Central American states to not recognize Taiwan in favor of stronger relations to China. Twelve of the twenty-one countries that recognize Taiwan are in LA.13 After Costa Rica switched diplomatic recognition from Taiwan to China in 2007, China and Costa Rica began negotiations for a free trade agreement in 2008 and the free trade agreement launched in 2011.14 In ten years, China has grown to deliver 12.6 percent of Costa Rica’s imports.15 When China-CELAC was launched, Costa Rica was asked to serve as the first chair of the Forum.16 Not every Chinese initiative has worked as well as its endeavors with Costa Rica; setbacks on the development of the $50 billion Nicaraguan Canal have disturbed bilateral relations between China and Nicaragua, where setbacks have delayed the development project from its late 2016 start date.17 In January 2017, Nicaragua’s President Daniel Ortega and Taiwan’s President Tasi Ing-wen had meetings to promote bilateral relations. Afterward, Ortega vowed to expand Taiwan’s international presence.18

Investment from China in LA focuses on the extraction of raw resources. Venezuela, Brazil, and Ecuador are the top three destinations for Chinese investment in LA. Twenty-eight of the thirty-two projects from the Chinese Development Bank in Brazil, Venezuela, and Ecuador are energy deals.19 High volumes of Chinese investment into raw resources is consistent across LA. Four-fifths of all Chinese investment in LA have been in resource extraction, with 70 percent of investment into oil and gas.20 Chinese shares of LA exports increased from 2 percent in 1993 to 9 percent in 2013.21 While China’s manufacturing imports from LA remain at 2 percent since 2003, their share of extraction and agriculture sectors has increased to 15 percent each.22 LA exports to China have also changed. From 1999-2003, oil and gas extraction consisted of 25 percent of LA exports to China. By 2013, oil and gas extraction consisted of 56 percent of LA exports to China.23

Chinese loans and investment in LA suggest they are using soft power to support countries wanting an alternative to American investment. While Brazil is less resistant to the United States’ presence in LA, Ecuador and Venezuela are both members of the Bolivarian Alliance for the Peoples of Our America (ALBA). ALBA seeks to promote the self-determination of LA states against United States’ investment. ALBA derailed the Free Trade Area of the Americas.24 Chinese investment in ALBA members suggests that Chinese investment finances countries wanting an alternative to the United States’ investment. China has invested $62.2 billion into development projects in Venezuela; almost 48 percent of total investment in LA.25 Venezuela also accepted $60 billion dollars in loans from China prior to the current economic crisis.26 Ecuador has borrowed upward of $11 billion from China between 2008 and 2014, covering 61 percent of Ecuadorian government spending.27 While China is not directly challenging American soft power in LA, Chinese investment supports governments that desire an alternative to the United States’ dominance.

Chinese investment and desire for LA raw resources has influenced China’s foreign policy. Prior to investing into LA, China would not be involved in crises in LA, but became involved in LA domestic crises in recent years. As Venezuela’s economy continues to spiral downward, the Chinese government invited economists and opposition lawmakers from Venezuela to Beijing throughout 2016. Officials discussed the $20 billion Venezuela owes China for loans and the possibility of a transitional government to bring stability to Venezuela.28 Ultimately, China decided to invest $2.2 billion to gain more share of the Venezuelan oil economy, from 500,000 barrels a day to 800,000 barrels a day in January 2017.29 Whether for good or bad, China’s foreign policy must now react to developments in LA to protect economic interests and imports of raw resources from LA.

Chinese investment in LA shows that investment changes a state’s foreign policy if they are the investor, or if the invested state has more to gain than an alternative. China is using soft power in LA to delegitimize Taiwan, have access to new raw resources, and to provide an alternative to U.S. dominance. Some of these efforts have led to positive results for China, but there have been setbacks for China. The more China invests into these objectives in LA, the more LA crises will affect Chinese foreign policy. If this relationship is beneficial for LA countries, they will also commit more to bilateral relations with China.

Phillip Bass is a junior studying International Relations at the University of Central Florida. Phillip is the Vice President of the International Relations Club, an organization that promotes academic and professional development of international relations students. Phillip is primarily interested in European studies.  Phillip is interested in moving into policy making fields or graduate school after his undergrad.

References

1. Kissinger, Henry A. 2012. “The Future of U.S.-Chinese Relations: Conflict Is a Choice, Not a Necessity.” Foreign Affairs, Vol. 91, No. 2 44-55.

2. Nye, Joseph. 1990. Bound to Lead: The Changing Nature of American Power. New York: Basic Books.

3. Kissinger. 48.

4. Coatsworth, John H. 2017. United States Interventions. March 20. http://revista.drclas.harvard.edu/book/united-states-interventions

5. Committee on Foreign Affairs: House of Representatives. 2015. “China’s Advance in Latin America and the Caribbean.” 2.

6. Committee on Foreign Affairs: House of Representatives. 2.

7. “The Dialogue”. 2016. China-Latin America Finance Database. March 25. http://www.thedialogue.org/map_list/.

8. Vyas, Kejal. 2016. China Rethinks Its Alliance With Reeling Venezuela. September 11. https://www.wsj.com/articles/china-rethinks-its-alliance-with-reeling-venezuela-1473628506?mg=id-wsj.

9. China-CELAC Forum. 2014. About the Forum. Accessed March 27, 2017. http://www.chinacelacforum.org/eng/.

10. Jinping, Xi H.E. 2015. “Jointly Write a New Chapter in the Partnership of Comprehensive Cooperation Between China and Latin America and the Caribbean.” Embassy of the People’s Republic of China in the United States of America. January 8. http://www.china-embassy.org/eng/zgyw/t1227730.htm.

11. Chinese Ministry of Commerce. 2015. November 18. http://fta.mofcom.gov.cn/english/index.shtml.

12. United Nations. UNcomtrade Analytics. Accessed March 27, 2017. https://comtrade.un.org/labs/data-explorer/.

13. Ministry of Foreign Affairs for the Republic of China. 2017. Diplomatic Allies. March 24. http://www.mofa.gov.tw/en/AlliesIndex.aspx?n=DF6F8F246049F8D6&sms=A76B7230ADF29736.

14. Chinese Ministry of Commerce. 2015. November 18. http://fta.mofcom.gov.cn/english/index.shtml.

15. World Trade Organization. 2017. Costa Rica. March 20. http://stat.wto.org/CountryProfiles/CR_e.htm.

16. China-CELAC Forum. 2014. About the Forum. Accessed March 27, 2017. http://www.chinacelacforum.org/eng/.

17. Watts, Jonathan. 2016. Nicaragua canal: in a sleepy Pacific port, something stirs. November 24. https://www.theguardian.com/world/2016/nov/24/nicaragua-canal-interoceanic-preparations.

18. Pretel, Enrique Andres. 2017. Nicaragua pledges to fight for Taiwan recognition on global stage. January 11. http://www.reuters.com/article/us-taiwan-usa-nicaragua-idUSKBN14V03Z?il=0.

19. The Dialogue. 2016. China-Latin America Finance Database. March 25. http://www.thedialogue.org/map_list/.

20. Gallagher, Kevin P, Lopez Andres, Rebecca Ray, and Cynthia Sanborn. 2015. “China in Latin America: Lessons for South-South Cooperation and Sustainable Development.” Global Economic Governance Initiative 6.

21. Gallagher et al. 5.

22. Gallagher et al. 5.

23. Gallagher et al. 5.

24. ALBA. 2017. What is the ALBA? March 25. https://albainfo.org/what-is-the-alba/.

25. “The Dialogue”.

26. Vyas, Kejal. 2016. China Rethinks Its Alliance With Reeling Venezuela. September 11. https://www.wsj.com/articles/china-rethinks-its-alliance-with-reeling-venezuela-1473628506?mg=id-wsj.

27. Kuo, Lily. 2014. Ecuador’s unhealthy dependence on China is about to get $1.5 billion worse. August 27. https://qz.com/256925/ecuadors-unhealthy-dependence-on-china-is-about-to-get-1-5-billion-worse/.

28. Vyas. https://www.wsj.com/articles/china-rethinks-its-alliance-with-reeling-venezuela-1473628506?mg=id-wsj.

29. Vyas. https://www.wsj.com/articles/china-rethinks-its-alliance-with-reeling-venezuela-1473628506?mg=id-wsj.

Featured image: Chinese President Xi Jinping (R) shakes hands with Brazil’s President Michel Temer during their meeting at the West lake State Guest House in Hangzhou, Zhejiang Province, China, September 2, 2016 (Minor Iwasaki/Reuters).

South America

The Demobilization of Latin America’s Only Carrier: Brazil’s NAe Sao Paulo

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The Southern Tide

Written by W. Alejandro Sanchez, The Southern Tide addresses maritime security issues throughout Latin America and the Caribbean. It discusses the challenges regional navies face including limited defense budgets, inter-state tensions, and transnational crimes. It also examines how these challenges influence current and future defense strategies, platform acquisitions, and relations with global powers.

“The security environment in Latin America and the Caribbean is characterized by complex, diverse, and non-traditional challenges to U.S. interests.” Admiral Kurt W. Tidd, Commander, U.S. Southern Command, before the 114th Congress Senate Armed Services Committee, 10 March 2016.

By W. Alejandro Sanchez

On 14 February, the Brazilian Navy announced that it will suspend the modernization of carrier NAe Sao Paulo (A12) and commence its demobilization and subsequent decommissioning. Oddly, the news is simultaneously surprising and unsurprising at the same time. The Brazilian Navy regarded the extension of the carrier’s operational life as one of its priorities, however, ongoing technical difficulties and rising costs have made it more feasible to get rid of it than to extend its service life. As Brazil is the only Latin American country that possesses an aircraft carrier, its decommissioning must be properly discussed in terms of regional geopolitics.

A Brief History

Brazil has possessed two carriers: the first one was NAe Minas Gerais (A11), a Colossus-class vessel that served in the Brazilian Navy from 1960 to 2001. The vessel, formerly known as HMS Vengeance (R71), was constructed by the United Kingdom during World War II and sold to the South American nation in 1956.

Minas Gerais was replaced by Sao Paulo, a Clemencau-type French carrier formerly known as Foch (F99). The vessel was constructed in the late 1950s and Brazil purchased it in 2000 in a deal reportedly worth USD 12 million; it arrived in the country in 2001. Sao Paulo reportedly displaces 32,800 thousand tons, is 265 meters in length, and its air wing is constituted of A-4 Skyhawk aircraft. Sao Paulo was an important component in the training of Brazil’s naval pilots, and it also participated in exercises with countries like Argentina. However, it also spent time docked undergoing repairs and upgrades.

The French shipyard Direction dês Constructions Navales et Services (DCNS) announced in December 2013 that it had “performed a ship check on the forward catapult” of Sao Paulo. On November 2015, IHS Jane’s reported that cracks had been found in the hull of the carrier, but the Brazilian Navy denied the report. Unfortunately, there were also deadly accidents aboard the platform: a May 2004 fire in the engine room killed three crew members. A second fire on February 2012 killed sailor Carlos Alexandre dos Santos Oliveira.

Demobilization Plans

The Navy’s decision to demobilize the platform is a slight surprise to the author of this commentary, who just this past September quoted the Brazilian Navy’s commander saying otherwise. At the time, the author asked Admiral Eduardo Leal Ferreira, commander of the Brazilian Navy, a question about Sao Paulo’s future at an on-the-record event at the National Bureau of Asian Research on 26 September, 2016. The Admiral explained that “we are working with DCNS to find a technical solution to have its propulsion system renewed.” Moreover, the Admiral listed the carrier as the third of the navy’s priorities, after the submarine program (PROSUB) and the construction of the Tamandare-class corvettes. What a difference a few months can make.

The Brazilian Navy’s communiqué explains the reasoning behind the decision to demobilize the carrier: upgrading it signifies “a high financial investment, there are technical issues and [the process will] require an extended period [of time].” The modernization process apparently could have taken a decade, by which time the AF-1 group would have to be retired, making it necessary to buy a new air wing suitable for the old ship. In an e-mail interview with this author, Professor Mauricio Santoro, a political scientist and assistant professor at the department of international relations of the State University of Rio de Janeiro, adds that “the explanation for this decision is the deep financial crisis that the Brazilian government is facing, with austerity measures being implemented as well as the expense cuts in many public policies.” In other words, given the scarce use of Sao Paulo and the expensive requirements needed to extend its operational life into the late 2030s, it is not surprising that the platform is being scrapped.  According to the Navy, the process will require three years.

With that said, the Brazilian Navy is already looking past Sao Paulo and maintains the aim of having a carrier in its fleet. The aforementioned 14 February communiqué explains that a new carrier remains the Navy’s third priority after PROSUB and the corvettes as “obtaining a new carrier will be substantially cheaper than modernizing Sao Paulo.”

This statement raises questions like: will Brasilia once again acquired a used platform, or will it embark on the more ambitious, but probably more costly, goal of manufacturing a new one? In recent years there have been occasional reports that DCNS has offered its PA2/CVF carrier project to Brazil to eventually replace Sao Paulo. We will have to wait and see how the Navy’s medium- and long-term plans are affected by recent developments. It is likely that Sao Paulo will be replaced eventually since, as Professor Santoro explains, “the importance of a carrier to Brazil has been highlighted in every major policy document of the Armed Forces, such as the National Defence Strategy.”

A Carrier-less Brazil and Latin America?

In previous CIMSEC analyses (e.g. How Peaceful is the South Atlantic?) the author discussed the generally calm South Atlantic geopolitics, which can be expanded to calm Latin American and Caribbean in general. There certainly are still some maritime border disputes and occasional incidents, but the region has been free of inter-state warfare for decades (the last regional war with a maritime theater of operations was the 1982 Falklands/Malvinas War). Moreover, Brazil enjoys cordial relations with its neighbors, hence the Brazilian Navy probably does not require a carrier to protect its exclusive economic zone (EEZ).

Nevertheless, the Brazilian Navy and several scholars and experts do believe in the necessity of having an aircraft carrier. “Brazil has thousands of miles of coastline, major offshore oil reserves, and more of 90 percent of its foreign trade comes from the sea, hence a carrier is an important tool for naval and foreign policy, as it serves both as a deterrent and helps naval forces in the open sea, among other activities,” Professor Santoro notes.  Additionally, a carrier would help Brazil’s power projection, demonstrating to the world that it has a blue water navy.

The Sao Paulo’s usefulness would likely be different if it had proved to be a global asset. For example, Sao Paulo could have been deployed to peacekeeping missions that Brazil participates in, such as the UN mission in Lebanon (UNIFIL) or the UN mission in Haiti (MINUSTAH). The platform would have been a welcomed addition to the multinational humanitarian operations in Haiti after the 2010 earthquake and the aftermath of Hurricane Matthew in 2016.

The Brazilian Navy carrier NAe Sao Paulo (Wikimedia Commons)

As previously mentioned, Brazil is the only Latin American that has a carrier nowadays. The only other regional country to possess one was neighboring Argentina: the ARA Independencia (V1) and then the ARA 25 de Mayo (V2), a Colossus-class carrier decommissioned in 1997. In fact, other Latin American navies are turning to smaller platforms, particularly oceanic patrol vessels (OPVs) given their maritime security challenges.

Should Brazil eventually acquire a new carrier, this will hardly affect regional geopolitics. Brasilia enjoys cordial relations with its immediate neighbors and the Western Hemisphere in general. This is best exemplified by the fact that the PROSUB project, which includes constructing a nuclear-powered submarine, has not triggered a regional arms race to deter an “imperialist” Brazil.

Final Thoughts

By the end of the decade, carrier Sao Paulo’s time in the Brazilian Navy will come to an end, leaving behind a lackluster record. The vessel spent too much time in port undergoing repairs, and when it was out at sea, it was for standard training missions, never participating in a defining operation that validated its acquisition. Moreover, Brazil likely does not need a carrier to protect its EEZ from neighboring nations, Latin American geopolitics being what they are, as compared to a large fleet of OPVs (the Tamandare corvettes will probably fulfill this role). Nevertheless, Brazilian experts, as well as the Navy, do regard the carrier as an important component of their maritime defense system as well as a critical platform to project Brazilian naval power.

Should Brazil eventually obtain a new carrier, this hypothetical platform should participate in multinational naval operations, such as Operation Atalanta in the Horn of Africa to combat piracy. The carrier could be utilized as a launching pad and an at-sea command center for humanitarian missions akin to the Operation Unified Assistance, in which the Carrier Strike Group Nine, led by U.S. carrier Abraham Lincoln, helped Asia Pacific nations after the 2004 Indian Ocean Tsunami. In other words, if the Brazilian Navy continues to regard a new carrier as a priority, while arguably unnecessary for traditional defense purposes, such a platform can be utilized for various helpful initiatives around the globe.

W. Alejandro Sanchez is a researcher who focuses on geopolitical, military and cyber security issues in the Western Hemisphere. Follow him on Twitter: @W_Alex_Sanchez

The views presented in this essay are the sole responsibility of the author and do not necessarily reflect those of any institutions with which the author is associated.

Featured Image: View of the forward flight deck of the Brazilian aircraft carrier Saõ Paulo (A12), in 2003. Four McDonnell Douglas AF-1 (A-4) Skyhawk fighters and an Argentine navy Grumman S-2T Tracker are visible. (U.S. Navy Naval Aviation News September-October 200)

South America

Exponaval 2016 and Latin America’s Arms Fairs

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The Southern Tide

Written by W. Alejandro Sanchez, The Southern Tide addresses maritime security issues throughout Latin America and the Caribbean. It discusses the challenges regional navies face including limited defense budgets, inter-state tensions, and transnational crimes. It also examines how these challenges influence current and future defense strategies, platform acquisitions, and relations with global powers.

“The security environment in Latin America and the Caribbean is characterized by complex, diverse, and non-traditional challenges to U.S. interests.” Admiral Kurt W. Tidd, Commander, U.S. Southern Command, before the 114th Congress Senate Armed Services Committee, 10 March 2016.

By W. Alejandro Sanchez

Chile organized the 10th Exponaval exhibition from 29 November – 2 December. The arms fair brought dozens of defense companies to northern Chile, where they showcased their latest maritime defense technology with the hope of securing new contracts. Arms fairs are a common event in the defense industry and they regularly take place in locations across the world, hence the success of Exponaval is particularly relevant as it will help Chile, and Latin America, cement its place in the global arms fair circuit.

Exponaval 2016

The Chilean government and Navy give great importance to Exponaval (full name Exhibición y Conferencia Internacional Naval y Marítima para Latinoamérica) as exemplified by the participation of President Michelle Bachelet, who gave a speech on 29 November to officially open the arms fair. The country’s defense minister and military authorities were also present. Unsurprisingly, during her speech, President Bachelet took a moment to praise her nation’s state-run shipyard Astilleros de la Marina (ASMAR) as it is constructing, with support from the Canadian company Vard, a new ice breaker for the Navy, which is scheduled to be completed in 2018. Exponaval 2016 was held at the at the Concon naval base in Viña del Mar, northern Chile. It is also important to note that the recent arms fair was actually a two in one event, as  the 10th Exponaval was also the 5th Trans-Port (full name, Exhibición de la Industria Marítima Portuaria para Latinoamérica), an exhibit of port industries in Latin America.

President of Chile, Michelle Bachelet, delivers remarks at Exponaval 2016 (Exponaval photo)

As for the type of technology that was exhibited, some examples include Russia’s Rosoboronexport, which displayed “Project 12150 Mangust fast patrol boats, the Varshavyanka-class (Project 636) submarines and Amur 1650 class submarines among other vehicles.” A number of British companies were also present, as Mercopress news agency explains that “companies exhibiting on the Department of Trade’s Defence and Security Organisation’s stand include: Leafield, SEA, MOD Disposals Agency and Ultra Electronics. Other UK companies exhibiting include BAE Systems, MBDA, Qinetiq, Kelvin Hughes, Lloyds Register and Thales.”

Additionally, there were also important developments among Latin American maritime defense industries. Case in point, a representative from Colombia’s Corporación de Ciencia y Tecnología para el Desarrollo de la Industria Naval Marítima y Fluvial (COTECMAR) told the defense news agency IHS Jane’s that “a joint programme between Brazil, Colombia, and Peru to develop a new river patrol ship is now under way, with design work expected to conclude in the second half of 2017.” The project dates back to 2015, but it is an important development that there is already a (still somewhat distant) deadline for the completion of the design.

Apart from the sales booths, there were several technical presentations via which experts shared their knowledge. According to Exponaval, the presentations included representatives from renowned defense companies like Navantia, MBDA Missile Systems, SAAB Group as well as Chile’s ASMAR.

Booth of Chilean state-owned shipyard ASMAR (Exponaval 2016 photo)

Even more, the Chilean Navy had  prominent participation in the fair, as it carried out exercises for the audience. This included a simulation in Valparaiso Bay of a vessel carrying radioactive material that is taken over by terrorists, where Chilean naval forces demonstrated how they would react to this hypothetical crisis.

Other Latin American Arms Fairs

It is worth noting that other Latin American countries also have arms fairs, though Exponaval stands out as it focuses on maritime defense technology. For example, Chile organizes another arms fair for aerial technology, the FIDAE-International Air & Space Fair (Feria Internacional del Aire y del Espacio). As for other regional states, Brazil organizes the LAAD Security–Feira Internacional de Segurança Pública e Corporativa (International Fair of Public and Corporate Security); Colombia has the Expodefensa International Fair of Defense and Security (Feria Internacional de Defensa y Seguridad); while Peru organizes the SITDEF–International Show for Defense Technology and Disaster Prevention (Salon Internacional de Tecnologia para la Defensa y Prevencion de Desastres).

Like with Exponaval, other governments and militaries provide support for these fairs in their respective nations. For example, while Exponaval 2016 took place at the Concon naval base, SITDEF 2017 will reportedly be held at the Peruvian Army’s headquarters in Lima.

Significance

What is the importance of Latin America organizing arms fairs? This author would argue that the main objective is to demonstrate that Latin America should not be regarded as a sole importer of military technology, but also a producer and a “showcase center” where deals can be made. President Bachelet voiced a similar idea in her welcome message as she stressed how this arms fair “allows a meeting between [suppliers] from the naval defense and maritime industry with official delegations from Latin American navies and the port agencies from other countries.”

In a 22 August commentary for CIMSEC entitled “The Rise of the Latin American Shipyard” the author discussed how various Latin American nations are constructing their own naval platforms and are even attempting to sell them to foreign customers. Since said commentary was published there have been new developments in the region: Colombia’s COTECMAR has signed a contract with Honduras and another one with Panama for logistic multipurpose vessels; Peru’s Servicios Industriales de la Marina (SIMA) has reached an agreement with Bolivia to sell its navy a riverine hospital ship; finally Ecuador’s shipyard Astilleros Navales Ecuatorianos (ASTINAVE) on 10 November “announced it is to construct three passenger boats for the Panama Canal Authority.”

Hence, regional arms fairs are particularly important for Latin American defense industries as they they allow for opportunity to showcase their products to regional navies and international firms in order to attract future sales. The aforementioned deals by ASTINAVE, COTECMAR and SIMA highlight that intra-regional naval platforms sales are already happening, and future arms fairs will benefit these companies in their eternal quest for new customers; hence it should not come as a surprise that SIMA and COTECMAR were present in Exponaval.

This brings us to the obvious question: to what extent do the exhibitions and meetings made during these arms fairs, such as Exponaval, result in actual contracts? Exponaval naturally summarized the recent fair as a success, explaining how over 140 company experts gave presentations, while putting the number of attendees at over nine thousand visits. Additionally, regional navies deployed some of their platforms, including Argentina’s corvette Robinson; Brazil’s Niteroi-class frigate Constitucion; Mexico’s patrol vessel Centenario de la Revolución; while the United Kingdom deployed the frigate HMS Portland and the tanker RFA Gold Rover.

As for contracts, Exponaval’s declared in a statement that deals were made for more than USD $800 million, but “this amount is related to the projects that the participating navies have in development for the next few years.” Hence, we will have to wait and see if in the coming months announcements are made about contracts between Latin American navies and maritime defense companies, and whether they can be traced back to Exponaval 2016.

Final Thoughts

The Exponaval 2016 arms fair which recently took place in northern Chile should be regarded as a success for local government and maritime forces. It was reportedly well-structured, with over a hundred companies showcasing their maritime defense products, it hosted thousands of visitors, and even featured visiting warships from friendly nations. Santiago also demonstrated the accomplishments of its state-run shipyard ASMAR as well as the professionalism of its naval forces. Ultimately, we will have to wait to see if, indeed, Exponaval (not to mention other Latin American defense fairs) can reliably serve as a place where suppliers and customers can meet and ultimately reach sales agreements.

W. Alejandro Sanchez is a researcher who focuses on geopolitical, military, and cyber security issues in the Western Hemisphere. Follow him on Twitter: @W_Alex_Sanchez.

The views presented in this essay are the sole responsibility of the author and do not necessarily reflect those of any institutions with which the author is associated.

Featured Image: Model submarine at Exponaval 2016 (Exponaval 2016 photo)

South America

The Status of Brazil’s Ambitious PROSUB Program

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The Southern Tide

Written by W. Alejandro Sanchez, The Southern Tide addresses maritime security issues throughout Latin America and the Caribbean. It discusses the challenges regional navies face including limited defense budgets, inter-state tensions, and transnational crimes. It also examines how these challenges influence current and future defense strategies, platform acquisitions, and relations with global powers.

“The security environment in Latin America and the Caribbean is characterized by complex, diverse, and non-traditional challenges to U.S. interests.” Admiral Kurt W. Tidd, Commander, U.S. Southern Command, before the 114th Congress Senate Armed Services Committee, 10 March 2016.

By W. Alejandro Sanchez

In spite of Brazil’s political crisis, the Brazilian Navy has continued with its ambitious project of domestically constructing a new fleet of submarines, including a nuclear-powered platform. The first Scorpène-class submarine is expected to be launched in 2018, an important development though a couple of years behind schedule. However, the question remains: does Brazil require today, or will it require in the foreseeable future, an advanced submarine fleet?

The PROSUB Program

A 2009 contract between the Brazilian Navy and French conglomerate DCNS “covers the design, production, and technology transfer required for four Scorpène-class conventional submarines, and the design assistance and production of the non-nuclear part of the first Brazilian nuclear powered submarine, including support for construction of a naval base and a naval construction site.” This contract was the result of a defense agreement signed in 2008 by then-Brazilian President Luiz Inacio Lula da Silva and his French counterpart, then-President Nikolas Sarkozy. This project is known as the Submarine Development Program (Programa de Desarrollo de Submarinos; PROSUB).

At the time of this writing, SBR-1 Riachuelo (S-40) is nearing completion as it is expected to be launched in 2018 and delivered to the Navy in 2020. The next submarine, SBR-2 Humaitá, will be launched in 2020, while SBR-3 Tonelero (S-42) and SBR-4 Angostura (S-43) are scheduled to be completed by the early 2020s.

The first two S-BR boats in the assembly hall. (PROSUB photo)
The first two S-BR boats in the assembly hall. (PROSUB photo)

It is worth stressing that the Brazilian Navy is particularly interested in learning how to manufacture the submarines domestically, rather than relying on DCNS to construct and assemble the submarines abroad. For example, in July, the Brazilian company Nuclebras Heavy Equipment (Nuclebrás Equipamentos Pesados; NUCLEP) delivered the stern section of Humaitá to Itaguaí Construções Navais (ICN) which is assembling the platform in Rio de Janeiro. According to IHS Jane’s Defense Weekly, “the submarine’s hull has been divided into five sections and to date … four sections of SBR 2 [have been delivered]. The final one is scheduled to be delivered in November.”

As for the nuclear submarine SN-BR Alvaro Alberto (SN-10), the Brazilian Navy’s PROSUB webpage reports that it is still in the developmental phase and that actual construction will commence in 2017 and be completed by 2025. “The transfer [of the submarine] to the Navy is expected to take in 2027,” the Navy explains.

A word should be said about the status of the shipyard, also part of PROSUB, since the Navy wants the capacity to construct more of these platforms in the future. To this end, a 750,000 square meter complex is under construction in the municipality of Itaguaí (Rio de Janeiro). In 2013, the Metal Structures Manufacturing Unit (Unidade de Fabricação de Estruturas Metálicas; UFEM) was inaugurated, with then-President Dilma Rousseff in attendance. Among other tasks, UFEM will manufacture the metal hull structures of the platforms.

The DCNS and Other Issues

It is necessary to highlight that the construction of these platforms has not been a smooth ride. A 1 March 2013 article by Reuters reported that “the first conventional submarine [will be completed] in 2015 and the nuclear-powered submarine will be commissioned in 2023 and enter operation in 2025, the Brazilian Navy said in a statement.” The timetable was perhaps too ambitious as the first submarine Riachuelo is now scheduled to be launched in 2018, three years later than originally reported. Similarly, the nuclear platform is now expected to be ready by 2025, not 2023. Part of the reason for the delay has to do with the country’s recent economic crisis which has affected the budget of governmental agencies, including defense.

Due to space considerations, we cannot provide a full account of Brazil’s political crisis over the past year with regards to the Lava Jato revelations. Nevertheless, it is important to note that the Brazilian conglomerate Odebrecht, which is involved in PROSUB via its ICN unit, has been implicated in the scandal. (Ret.) Admiral Othon Luiz Pinheiro da Silva, considered the father of Brazil’s nuclear program and a major supporter of the nuclear submarine (see his biography in Togzhan Kassenova’s commentary Turbulent Times for Brazil’s Nuclear Projects) has also been implicated in illicit activities. He was sentenced to 43 years in prison this past August for corruption and money-laundering. While PROSUB itself has survived the recent crises, these scandals raise the question whether there will be new allegations of illegal activities surrounding the construction of these platforms in the near future.

The other problem with PROSUB is that sensitive information about the Scorpène-class subs may be out in the open as DCNS has suffered a massive intelligence leak. This past August, the Australian daily The Australian published documents which “detail the secret combat capability of six Scorpène-class submarines that French shipbuilder DCNS has designed for the Indian Navy.” According to reports, the DCNS leak includes more than 22,000 pages about the Indian platforms.

Regarding this incident, Brazilian Rear Admiral Flavio Augusto Viana published a letter stating that “the Brazilian submarines were designed along specifications made by the Brazilian Navy, which means that there are differences between our submarines and those of other countries.” Therefore, the Brazilian Navy, “does not foresee any impact on the construction of the SBR.” The author is not qualified to compare the Brazilian and Indian Scorpène-class subs, however it is likely that there are some general similarities between the two models.

tun_razak
Scorpène-class Malaysian Navy submarine Tun Razak in the shipyard of Navantia-Cartagena (Spain) a few days prior to its delivery. (Wikimedia Commons)

At this point it is worth remembering the words of Admiral Eduardo Leal Ferreira, commander of the Brazilian Navy, who spoke at a recent 26 September event entitled “Addressing Challenges in the Maritime Commons” at the National Bureau of Asian Research. An article written by the author for IHS Jane’s Defense, quotes Admiral Ferreira stating that the PROSUB program is the Navy’s main priority, followed by upgrading the fleet’s frigates, and then repairing the Sao Paulo(A-12) carrier. In other words, PROSUB, in spite of delays, budget issues and other incidents, will continue.

Discussion

Given that PROSUB is well underway and by next decade we will see a modern, domestically constructed, Brazilian submarine flee. The question is: why does Brazil need these platforms?

The standard reason is for Brazil to monitor and protect its 7,500 kilometers of coastline and vast maritime territory, including its natural resources (the discovery of underwater oil reserves is an often-mentioned fact), from domestic and foreign threats. In his remarks for NBAR, Admiral Ferreira added that the Atlantic Ocean is an open ocean, not a closed sea, so Brazil requires a blue water navy, hence the importance of the submarine and aircraft carrier program. The admiral also highlighted the necessity to have freedom of navigation, implying a blue water navy is necessary, “so when there are problems in the South China Sea or the East China Sea or wherever, we won’t be affected.”

This author argues that Brazil does not have any major inter-state issues that would make the submarines, a platform suitable for conventional warfare, necessary. The reality of South American geopolitics is that Brazil’s relations with its 10 neighbors, including one-time competitor Argentina, remain quite cordial. Hence, the possibility that a regional state would attempt to aggressively take control of part of Brazil’s exclusive economy zone is too remote to realistically contemplate.

Additionally, while Brazil has pursued the submarine program (among other platform acquisition projects), this has not sparked a regional arms race for fear of an “imperialist” Brasilia trying to take over a neighbor’s territory. In other words, regional states do not appear threatened by Brazil’s PROSUB program, highlighting the current status of regional geopolitics and the general success of confidence building mechanisms (for example Brazil has a constant presence in regional military exercises, such as hosting UNITAS Brasil 2015 and serving as the deputy commander for PANAMAX 2016 – Multi-National Forces-South), which make the possibility of inter-state warfare remote in this region.

Likewise, there is little chance that an extra-regional power will deploy a fleet to Brazilian waters a la Spanish Armada to take over its oil platforms. While it is true that the U.S. did send a fleet, led by the USS Forrestal, to support Brazil’s military coup in 1964, bilateral, regional and global geopolitics are not the same as five decades ago.

Without a doubt, Brazil deserves a well-equipped and modern navy that can address its 21st century challenges, protecting its maritime territory, particularly the offshore oil platforms, and cracking down on maritime crimes like drug trafficking (or other types of smuggling) or illegal fishing. However, this author argues that submarines are hardly the appropriate platforms for these tasks. A fleet of oceanic patrol vessels (OPVs) along with a robust air wing would be more suitable for coastal and oceanic patrol, including the interdiction of suspicious vessels.

Final Thoughts

In his September remarks at NBAR, Admiral Ferreira explained the need for Brazil to possess a blue water Navy in case of a hypothetical armed conflict in the South or East China Seas. This author has not found a direct correlation between the two issues: if an incident took place, would Brazil need to deploy its platforms to the open seas in defense of freedom of navigation? While the Admiral’s statement is not clear, the wider goal is to obviously increase the power projection of the Brazilian Navy by making it a blue water navy. This explains PROSUB’s priority, as this will be a major source of pride regarding the country’s naval capabilities, including the ability to manufacture these platforms.

Additionally, Admiral Ferreira highlighted that the Brazilian Navy is a dual-purpose navy as “we are not just a war-fighting Navy like the U.S., we have other collateral tasks, we are coast guard, we are maritime authority for safety of the sea [and] we have lots of tasks in the Amazon basin.” Indeed, the Brazilian Navy has a variety of tasks. However, the question remains if a fleet of four Scorpène-class submarines and one nuclear-powered submarine are the ideal platforms to carry out these duties when OPVs and frigate-type platforms (which the Navy is upgrading) are more suitable for these tasks.

W. Alejandro Sanchez is a researcher who focuses on geopolitical, military, and cyber security issues in the Western Hemisphere. Follow him on Twitter: @W_Alex_Sanchez.

The views presented in this essay are the sole responsibility of the author and do not necessarily reflect those of any institutions with which the author is associated.

Featured image: The interior of the Brazilian Navy submarine Tapajó (Guilherme Leporace / Agência O Globo)