Brazil's Rousseff Rethinks French Jet Fighter Deal

With a defense budget that seemed small compared to its increasing economic and political importance, the Luiz Inácio “Lula” da Silva administration announced it would ramp up its military in 2008. Part of that buildup included a decision to update the Brazilian Air Force’s fighter jet fleet with the purchase of 36 Rafale fighter jets from the French company Dassault. The deal was nearly set in stone when Lula left office, but after less than a month as president, his protégé and successor Dilma Rousseff is now rethinking it.

The most pressing reason to put off the decision is budgetary, according to an unnamed spokesperson for the Brazilian president cited by A Folha de São Paulo. The Brazilian Congress is currently trying to figure out how to cut some $24 billion from the budget. On top of that, heavy rains and flooding outside of Rio de Janeiro over this month have killed more than 700 people and left another 14,000 homeless, generating unforeseen emergency expenditures. Given the current climate of austerity, the spokesperson explained, moving ahead with a $6 billion military deal appears untenable.

Brazil’s leadership does not appear to view the purchase as an immediate strategic necessity. Speaking at George Washington University in October, Brazilian Defense Minister Nelson Jobim said Brazil does not have violent ethnic conflicts or border disputes and is located at a comfortable distance from the centers of world power. Without pressing foreign threats, Brazilian leaders now view the role of the military
as a facet of economic development, Jobim said. The Defense Ministry’s long-term goal is to produce the country’s military equipment internally rather than buying it from foreign companies.

Technology transfer is the key to the jet fighter purchase, given the Brazilian government’s military aims. The Dassault offer carried the highest price tag among the three finalists for the bid, estimated at roughly $6 billion. That figure amounts to almost one-fifth of Brazilian defense spending for the year 2009, according to data compiled by the Stockholm International Peace Research Institute. The French company sweetened its offer, however, with a total technology transfer that would allow Brazil to assemble and sell the planes in the future. France has become a strategic ally for Brazil in recent years—investing in Brazil’s air company Embraer to develop military transport planes, and partnering with Brazil to construct French-designed submarines and a naval shipyard to build them.

But postponing the deal until next year reopens the politically charged debate over who will receive the lucrative defense contract. Now, Saab of Sweden and Boeing of the United States are back in the running. The Saab offer carries the lowest price tag and the Brazilian Air Force supported the Swedish company in its technical evaluation of the bid. But Rousseff has shown she is willing to consider the Boeing Super Hornet proposal more carefully if it can offer similar technology transfer as Dassault’s. To secure that, Boeing would need approval from the U.S. Congress, and Rousseff has asked Chairman of the U.S. Senate Armed Services Committee John McCain (R-AZ) to explore the possibility, reports Reuters.

Renegotiating the deal could have political implications. Brazil enjoyed cordial relations with the United States under Lula, and in April the two countries signed their first defense cooperation agreement in decades—a deal that covers joint training, student exchanges, and increased information sharing, among other provisions. But though Lula has a reputation for getting along with just about everyone—from former U.S. President George W. Bush to Iranian President Mahmoud Ahmadinejad—his criticisms of the United States grew toward the end of his presidency and he challenged President Obama’s drive for UN sanctions against Iran for allegedly attempting to develop nuclear weapons.

Rousseff has shown signs that she is interested in smoothing out the ruffles in Brazil’s relationship with the Obama administration. Rousseff said as president she would “try to forge closer ties with the U.S.,” in a recent interview with The Washington Post.  “I believe that Brazil and the U.S. have to play a role together in the world,” she added.

Learn more:

• AS/COA Online news analysis: "U.S. and Brazil Ink Military Pact."
• Brazilian Defense Ministry’s “National Defense Strategy.”
• Stockholm International Peace Research Institute’s military spending data, by country.
• The Brazilian Defense Ministry’s outline of its national defense industry policy.
• Synopsis of Defense Minister Nelson Jobim’s talk “Brazil’s Security Strategy and Defense Doctrine,” given at George Washington University on Oct. 20, 2010.
• The Nuclear Threat Initiative’s “Issue Brief” on Brazil’s challenge to U.N. sanctions against Iran.
• The Washington Post Interview with Brazilian President Dilma Rousseff, December 3, 2010.
• Press Release for the U.S.-Brazil Defense Cooperation Agreement.