The Argentine defence sector did not see any major shocks over 2011. Tensions continue to grow between the UK and Argentina concerning Las Malvinas/The Falkland Islands, but it is highly unlikely that a military conflict will erupt again between the two states. The Argentine government has continued with its policy of improving domestic production capabilities and BMI believes that recent technological and development cooperation agreements between Argentina and Brazil are best viewed as moves to strengthen this capability. BMI forecasts military spending to increase over 2011 and through to 2015, but not at rates significant enough to transform the procurement environment of to provide major opportunities for companies being squeezed by defence cuts around the rest of the world.
In an important development, Argentine defence minister Arturo Puricelli met his Brazilian counterpart Celso Amorim in a September meeting in Buenos Aires. The two countries hold regular defence talks as part of what they termed their ‘strategic alliance’. In order to facilitate even closer relations between the neighbouring countries, a permanent dialogue is being created to allow constant contact on a wide range of issues, including defence. One particularly significant development to emerge from the meeting was the agreement to explore avenues for joint weapons production, research and even procurement.
Tensions have been rising in the Argentine-British dispute over the sovereignty of the Falkland Islands/Las Malvinas. The Argentine government recently described the 2,000 British inhabitants of the island as ‘hostages’ and has been stepping up efforts to force the British government into negotiations.
Puricelli has said that the British government is incapable of thinking about the issue as anything other than ‘a fortress supported with strong budgets’. The comments were prompted by a UK think-tank report urging higher defence spending in order to fend off a potential Argentine attack. Argentina has recently threatened to cut off air links to the islands. President Kirchner threatened to withdraw from a 1999 agreement which allows flights from the islands to fly over Argentine territory and to make stops at Rio Gallegos.
In procurement news, 40 more ‘Pampas’ are to be bought by the Argentine Air Force. Puricelli signed off on the move in September 2011, ordering 40 models of the FadeA IA-63 ‘Pampas’. The planes are advanced trainers developed domestically. There are plans, however, to develop a new ‘Pampa NG’ light strike fighter off of the current Pampas model. The 40 planes will be delivered over a four-year period beginning late 2012.
Meanwhile, Argentina is now able to maintain its submarine fleet, after the completion of work on a shipyard in the country. CINAR, the Naval Industrial Complex of the country’s Navy, has recently been refurbished. The ‘San Juan’ submarine, which was launched in 1985, has been the first to benefit from the new domestic capabilities. Prior to this development, the submarines had to be sent to Brazil to be maintained and upgraded. The submarine, along with the ‘Santa Fe’, was originally built in Germany. Four more models were to be constructed in Argentina but these plans were dropped due to budget problems.
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