2008-11-25 12:07:02 -
Venezuela Defence and Security Report 2008 - a new market research report on http://www.companiesandmarkets.com www.companiesandmarkets.com/Summary-Market-Report/Venezuela-Defe ..
In 2007 President Hugo Chávez continued to concentrate power and influence in Venezuela, and to a lesser degree in Latin America, pursuing a nationalist and anti-US policy. At home his position looked secure, based on popular support from Venezuelas poor, an overwhelming majority in Congress (the opposition boycotted the December 2006 elections), and wide-ranging executive powers. That said, a number
of analysts note that the Presidents leadership style is based on provoking conflict and permanently casting himself in the role of rebel against Venezuelas perceived enemies, ranging from the US to the old ruling elite and traitors to his cause. This style has not served him badly in the first eight years of his rule; but some would say it potentially carries within it the seed of his own destruction.
Venezuelas armed forces are amongst the smallest in the region, but were traditionally technologically superior to many of its regional counterparts. However, this superiority is becoming increasingly insignificant. Venezuela plays little part in the world arms market. It imports nearly all its weapons, and in fact has almost no indigenous defence production capability. Venezuelas marked dependence on weapons imports has traditionally been somewhat offset by the diverse suppliers from which the country purchases its arms.
Modernisation and upgrades under the new procurement programme are likely to be externally directed, with European and Middle Eastern countries expected to make up most of the suppliers. However, the overall increase in procurement could prove beneficial for the defence industry if co-operative or domestic bids are chosen for later contracts. Defence spending will increase over the forecast period as a result of high oil prices that have enabled the government to go on an arms procurement spending spree.
However, in May 2006, the US imposed a ban on arms exports to Venezuela, having tried to stop the sale of military aircraft from Spain and Brazil that use US manufactured components.
BMI believes that Hugo Chávez is here for a while yet. Chávez has dominated Venezuelan politics since his election in 1998. The anti-Chávez opposition movement has been deeply divided since the failed coup in 2002 and the subsequent failure to make a recall referendum stick. Venezuela is not likely to develop a competitive defence industry in the foreseeable future and will remain import-dependent for its weapons purchases and diverse in the sources it relies on for those purchases.
